7 best online brokers in 2021

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If you’re ready to invest and trying to find a brokerage account that works best for you, it’s important to have a comprehensive look at the top options — and that’s what Bankrate provides below.

We’ve examined the largest brokers based on characteristics that matter to individual investors, including trading fees, account minimums, free research and many other features. We’ve evaluated each broker on their pros and cons, and here’s how they stack up on the most important aspects for 2021.

Best online brokerage accounts in 2021

Charles Schwab

Schwab has been well-known for decades with its customer-first approach. Charles Schwab does it all well, from low fees to solid research to no account minimum – all at a reasonable trading commission. Beginners will like the zero commissions and thousands of no-transaction-fee funds, while more advanced traders will appreciate the highly customizable StreetSmart Edge trading platform.

On top of all of this, the broker offers great customer support, educating you on how to invest and giving you a fast response. 

Commission: $0 per stock or ETF trade; $0.65 per options contract

Minimum: $0

Fidelity Investments

With a reputation for being investor-friendly, Fidelity is a great overall pick for your next broker. Fidelity provides a wealth of research and is highly regarded for its snappy customer support, too. The broker offers commission-free trading on stocks and ETFs and throws in thousands of mutual funds without a transaction fee, too.

The Boston-based broker is great about getting rid of unnecessary account fees even as it provides a top-quality experience.

Commission: $0 per stock or ETF trade; $0.65 per options contract

Minimum: $0

TD Ameritrade

TD Ameritrade is great if you want a broker that can go anywhere. Besides the usual stocks, bonds, ETFs and options, you’ll also get access to futures and forex. That’s on top of more than 4,000 mutual funds with no transaction fee.

With free research and the high-powered thinkorswim trading platform available to investors, it’s a winner. And of course, this leading broker charges no commissions on stock and ETF trades. 

(Charles Schwab has purchased TD Ameritrade, and will eventually integrate the two companies.)

Commission: $0 per stock or ETF trade; $0.65 per options contract

Minimum: $0

E-Trade

If you want access to all types of investing, then E-Trade can give you that, with access to stocks, bonds, options, ETFs, mutual funds and futures. You’ll also be able to buy more than 4,500 mutual funds with no transaction fee.

You’ll get extensive customer support (think 24/7 access across email, phone and online chat), a high-quality mobile app in Power E-Trade and plenty of research and market commentary, if you’re looking for it.

Commission: $0 per stock or ETF trade; $0.65 per options contract, with a discount to $0.50 for 30 or more trades per quarter

Minimum: $0

Interactive Brokers

With its stripped-down trading interface, Interactive Brokers only looks like a no-frills broker. But this “broker to the pros” has put all its resources into creating a great experience for active traders. So it’s no surprise that it’s a top choice among advanced traders and those who value the finer points, such as swift trade execution. Volume-based discounts and a pro-level trading platform are enticing to many of these active traders.

You can stick with the broker’s Pro platform with $1 minimum commissions (or a half-cent per share above 200 shares) or get in the game for $0 commissions if you move to the broker’s Lite service tier. 

Commission: $0 (Lite service) or $1 minimum per trade (Pro service), with volume discounts available; $0.65 per options contract

Minimum: $0

Merrill Edge

Merrill Edge’s strongest suit is the research it offers clients, which comes from the broker’s extensive in-house team of analysts. The package includes detailed analyst reports for companies that it covers, and Merrill also offers good educational material for beginning investors.

One of the best features is the broker’s integration with Bank of America, so you can move money quickly from bank to broker, and it all comes at a great price: free!

Commission: $0 per stock or ETF trade; $0.65 per options contract

Minimum: $0

Ally Invest

Ally Invest is a good add-on for customers of Ally Bank who need a fully functioning broker that can execute all kinds of trades – stocks, ETFs, bonds, mutual funds and even forex, if you’re into that. You’ll get the industry standard commission on stock and ETF trades, and you can get an industry-beating commission on options contracts, at just $0.50.

While the broker doesn’t have any no-transaction-fee mutual funds, it does offer a low base price ($9.95) for such trades.

Commission: $0 per stock or ETF trade; $0.50 per options contract

Minimum: $0

What to consider when choosing an online broker

If you’re just getting started, the world of investing can seem daunting. It’s good to start slowly and work your way into it. The good news for investors is that it’s never been easier or cheaper to trade with an online broker. As you’re looking for a broker, you’ll first want to consider your needs:

  • Are you looking to trade short term or invest long term?
  • Do you need a fully featured broker that gives you access to retirement accounts such as a Roth IRA or business accounts such as a SEP IRA?
  • Are you looking to invest regularly but not really follow the market closely?
  • Do you want to invest in individual stocks or do you prefer funds?
  • How much customer support do you need?

From there, you can begin to consider how each broker may meet those needs. Some brokers such as Interactive Brokers really cater to advanced traders, while others such as Charles Schwab and Fidelity Investments make it easy for beginners and long-term investors to start.

And if you’re just looking to trade with a mobile app and don’t want some of the frills (such as retirement accounts), then you might also consider turning to Robinhood or Webull.

Finding the right broker starts with you identifying what your needs are and then matching up with a broker that closely meets them.

Are online brokers safe?

The Securities Investor Protection Corporation, or SIPC, protects the clients of brokers who are covered by the plan, including those listed above. Think of it as a kind of FDIC for brokers. That means it protects a customer’s assets, up to $500,000 in total with a $250,000 limit on cash, in the event that the broker fails. Some brokers such as Interactive Brokers take out even more insurance to reassure their customers that their assets are safe with the broker.

But this insurance does not protect you from making a bad investment and losing money. You can buy a stock and it can decline in value, and its price may not rise again to what you paid. While FDIC-backed bank products are fully insured, market-based products can lose money. That said, a long-term investment in a broadly diversified group of stocks can perform very well.

What is the best online stock broker for beginners?

Beginning investors should focus on brokers that are investor-friendly, offer a lot of education and research and have strong customer service. These factors are key to new investors learning the basics of long-term investing and how to navigate the market and the brokerage.

Brokers with strong customer support allow you to contact them and ask questions, sometimes at any hour of the day via phone or chat. They’ll also have educational sections on their site that walk you through how to trade on their platform, what to look for in an investment and more.

Strong research is also helpful if you’re just getting started. If you’re looking to buy stock funds, such as ETFs or mutual funds, it’s helpful to have a broker who can screen for the best picks. If you’re looking to buy individual stocks (which can be riskier for new investors), you’ll want to look for a broker that provides research on the company and its future prospects. But even with those resources, you’ll still want to come to your own decision on how and why to invest.

Bankrate has reviewed the best brokers for beginners and offers its top picks.

Bottom line

Selecting a broker requires you to think about your needs, because the deciding factor is not always about price. If you’re a buy-and-hold ETF investor, you’ll probably need something different than if you’re an active trader.

While new investors might find choosing a broker to be daunting, you aren’t likely to go wrong with any of the names mentioned above. The bigger step is just getting started, so don’t delay. Once you’ve found a broker, you can begin plotting your way to a more secure financial future.

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Written by
James Royal
Senior investing and wealth management reporter
Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more.
Edited by
Senior wealth editor
Reviewed by
Senior wealth manager, LourdMurray