The Best Online Brokerages
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
- Accounts types: Full – Brokerages, IRAs, banking, managed portfolios
- Commissions/Fees: $0 stocks and ETFs, $0 on Schwab Mutual Funds
- Account minimums: $0, no trade minimum
- Fractional shares? Yes
- Security: Two-factor, encryption, and security guarantee
- Branch locations: 300+
- Customer Service: 24/7 Phone or Chat
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
- Accounts types: Full – Brokerages, IRAs, banking, managed portfolios
- Commissions/Fees: $0 stocks and ETFs, $0 on Fidelity Mutual Funds
- Account minimums: $0, no trade minimum
- Fractional shares? Yes
- Security: Two-factor, encryption, and security guarantee
- Branch locations: 190+
- Customer Service: 24/7 Phone or Chat
InvestorCommunity.org Rating
- Web Platform – 4 stars
- Mobile Platform – 4 stars
- Awards: #1 Barron’s and Investor’s Business Daily “Best Online Broker”
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
- Accounts types: Online – Brokerages, IRAs, banking, managed portfolios
- Commissions/Fees: $0 stocks and ETFs, $0 on 9000 Mutual Funds
- Account minimums: $0, no trade minimum
- Fractional shares? No
- Security: Two-factor, encryption, and security guarantee
- Branch locations: 30
- Customer Service: 24/7 Phone or Chat
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
- 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 and encryption
- Branch locations: None
- Customer Service: 24/7 Phone
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
- Accounts types: Online – Brokerages, IRAs, limited banking, managed portfolios
- Commissions/Fees: $0 stocks and ETFs, $0 on some Mutual Funds
- Account minimums: $0, no trade minimum
- Fractional shares? No
- Security: Full – two-factor, encryption, and fraud guarantee
- Branch locations: None
- Customer Service: Daytime Phone
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
- Accounts types: Online – Brokerages, IRAs, limited banking, managed portfolios
- Commissions/Fees: Various Schemes
- Account minimums: $0, no trade minimum, $100,000 for Pro, Various.
- Fractional shares? Yes
- Security: Two-factor, encryption
- Branch locations: None
- Customer Service: 24/7 Phone, chat or email
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.