The Best Online Brokerages

Personal Finance Dec 31, 2020

The online brokerage revolution is here! With the extremely competitive environment fostering in an era of zero commission fees, free tools, and powerful features, there is no better time to be an investor.

Even if you already have a brokerage that you are comfortable with, knowing the other options will allow you to be comfortable that you have made the right decision. Remember that while transferring your investments from one brokerage to another may seem daunting, it actually quite easy and streamlined.

These are the most popular brokerages:

  • Charles Schwab – Best all-round brokerage
  • Fidelity Investments
  • TD Ameritrade
  • E*TRADE – Best for active day traders
  • Merrill Edge (BoA)
  • Ally Invest
  • Interactive Brokers – Best for professionals
  • Vanguard – Best for Vanguard retirement fund investors
  • Robinhood
  • SoFI – Best streamlined experience

One important point to remember – in the past brokerage exclusive mutual funds were a significant factor when deciding on a brokerage. However, with the rise of low cost ETFs it is now possible to invest in most ETFs from any platform (i.e. using a Schwab brokerage to buy a Vanguard ETF).


Charles Schwab

Overview – Full featured online brokerage with zero commissions.

Facts

InvestorCommunity.org Rating

  • Web Platform – 5 stars
  • Mobile Platform – 5 stars
  • Awards: #1 JD Power 2020 Self Directed Investor and Direct Retail Banking Satisfaction

Positives

Excellent platforms that offer a seamless web+mobile experience that is clearly organized, streamlined, and effective. Schwab does not charge ATM fees on banking accounts. Offers a full range of managed portfolios (including robo-advisors).

Negatives

Schwab has high fees for their mutual funds

and offers extremely low interest rates on cash balances. Uninvested income is swept to a money market account that earns virtually 0% (Schwab re-invests this and collects the profit for itself, providing the source for a significant part of its revenue at no risk to the investor).


Fidelity Investments

Overview – Full featured online brokerage with zero commissions.

Facts

InvestorCommunity.org Rating

Positives

Streamlined platform on web and mobile offers a clear layout that focuses on essentials (great for beginning investors). Excellent research from 16 different service. Uninvested cash is automatically swept into a money market fund.

Negatives

Streamlined platform might not be to everyone’s tastes with its simplified structure. Brand color green is extremely prominent throughout every product.


TD Ameritrade

Overview – Full featured online brokerage. TD Ameritrade was bought by Schwab in 2019. It is expected to be merged in Schwab’s platform.


E*TRADE

Overview – Pioneer of online trading with an excellent platform for professional traders and mobile users, although has fallen behind with an outdated consumer web experience. Morgan Stanley bought E*TRADE in 2020 although it is unknown if they will combine platforms.

Facts

InvestorCommunity.org Rating

  • Web Platform – 4 stars
  • Mobile Platform – 4 stars
  • Awards:

Positives

Excellent mobile app. Desktop professional platforms offer amazing features for those who day trade.

Negatives

Cash sweep on uninvested amounts earns virtually nothing. Banking products offer lower interest rates.


Merrill Edge (BoA)

Overview – Product of one of the biggest names in banking that offers an easy integration for current Bank of America customers

Facts

  • Accounts types: Online – Brokerages, IRAs, banking, managed portfolios
  • Commissions/Fees: $0 stocks and ETFs, $0 on some Mutual Funds
  • Account minimums: $0, no trade minimum
  • Fractional shares? No
  • Security: Two-factor, encryption, and fraud guarantee
  • Branch locations: 4,300
  • Customer Service: 24/7 Phone

InvestorCommunity.org Rating

  • Web Platform – 2 stars
  • Mobile Platform – 2 stars
  • Awards:

Positives

Easy integration if you currently use Bank of America. 4,300 branch locations ensures physical proximity.

Negatives

Older, cluttered web presence. Web app utility is minimal. Margin rates are higher than average.


Ally Invest

Overview – No frills investment firm with excellent savings rates.

Facts

InvestorCommunity.org Rating

  • Web Platform – 3 stars
  • Mobile Platform – 3 stars (Non dedicated app)
  • Awards:

Positives

Streamlined experience that takes most of the complexity out of investing. Excellent integration for current Ally banking customers. Has excellent savings account interest rates.

Negatives

No dedicated investing mobile app. Overly streamlined for experienced investors desiring full features.


Vanguard

Overview – Dated online presence paired with the best ETFs and funds.

Facts

InvestorCommunity.org Rating

  • Web Platform – 2 stars
  • Mobile Platform – 4 stars (New app in 2020)
  • Awards:

Positives

Excellent, extremely low cost ETF and mutual fund selection. New mobile app is elegantly simple and provides a great interface for traders who do not need advanced features. Decent cash interest rates.

Negatives

Web 1.0 interface will leave you reminiscing about the early 2000’s. Vanguard ETFs can be accessed from other brokerages, leaving little reason to choose Vanguard’s interface. Some mutual funds have high minimums.


Interactive Brokers

Overview – Most powerful platform with advanced tools for full-time, professional traders.

Facts

InvestorCommunity.org Rating

  • Web Platform – 5 stars (for pro’s, 2 star for amateurs).
  • Mobile Platform – 4 stars
  • Awards:

Positives

Platform optimized for professional investors with all the required tools and features. Worldwide coverage allows trading in almost any exchange (135 markets in 33 countries) for stocks, futures, options, foreign exchange, and bonds.

IBKR Lite is a new consumer level platform that was started in late 2019 that parallels other competitor’s consumer platforms by minimizing the complexity (and reducing available features).

Negatives

If you’re reading this guide, IB is not for you. Over-complicated a

nd under provisioned for people lacking professional trading experience.


Robinhood

Overview – Love it or hate it, Robinhood has led a revolution of investing for junior investors by “gamifying” investing, albeit with a limited (or some would say streamlined) feature set.

Facts

  • Accounts types: Online – Brokerage, limited banking
  • Commissions/Fees: $0
  • Account minimums: $0
  • Fractional shares? Yes
  • Security: Two-factor, encryption
  • Branch locations: None
  • Customer Service: Email support

InvestorCommunity.org Rating

  • Web Platform – 3 stars
  • Mobile Platform – 3 stars
  • Awards:

Positives

Extremely streamlined platform for trading. Excellent for the person who has never invested before and wants the simplest experience with low dollar amounts. Offers cryptocurrency trading.

Negatives

App and online features may leave some desiring more full featured systems. Some concerns with governance and security capabilities given its start-up culture and lack of established structure. Very app-centric experience.


SoFi

Overview – Excellent streamlined experience that shares many of the characteristics of Robinhood without the “gaming” flair of its competitor.

Facts

  • Accounts types: Online – Brokerage, Limited banking focused on loans
  • Commissions/Fees: $0
  • Account minimums: $0
  • Fractional shares? Yes
  • Security: Two-factor, encryption
  • Branch locations: None
  • Customer Service: Daytime phone and email support

InvestorCommunity.org Rating

  • Web Platform – 5 stars
  • Mobile Platform – 5 stars
  • Awards:

Positives

Elegant and streamlined online and mobile presence that isn’t as obnoxious as Robinhood. Has a fuller product set of limited banking services to pair with investing (loans, credit, cards, etc.).

Negatives

Doesn’t have the full feature set of some bigger, more established players.

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