Category: 3. Best online stock brokers

What makes it great: Fidelity is another of the biggest online stock brokers in the United States that makes it easy to manage all of your investments under one roof. However, Fidelity stands out from the rest for its retirement accounts and related features. If your main goal is long-term investing, Fidelity could be the best choice.

In addition to low fees accounts, Fidelity offers a set of no-fee ETFs, meaning you can make a broad investment that’s almost truly no-cost. It also supports multiple trading apps for various investment types and goals. The retirement analysis tools are also some of the best around and are free for all customers.

Potential drawbacks: Fidelity doesn’t give us much to complain about. But it should be noted that it doesn’t support certain less common assets like futures or crypto. It also charges a relative high fee for assisted trades, but that’s not out of the norm among peers. Expert active traders may also find Fidelity’s platforms limiting compared to others.

Commissions and fees: Fidelity mainly offers accounts with no recurring fees. You won’t pay commissions on most trades outside of fixed income securities and a $0.65 cent per contract fee for options. Fidelity also features four index mutual funds with 0% expense ratios. Broker-assisted trades will set you back $32.95.

Pros:

• Low-cost accounts and commission-free trades
• Excellent resources for retirement planning
• Several apps to manage your accounts and investments

Cons:

• Clients can’t trade crypto or futures
• High cost for assisted trades
• Less ideal for some active, expert traders

What makes it great: When Robinhood launched in 2013, it disrupted the industry with its commission-free stock trading. Today, that’s basically the price of admission if you want to be competitive as an online stock broker. However, options trading is one area where Robinhood still undercuts most of its competitors. Not only does it charge no commissions on options, but it doesn’t charge any per contract fees either.

Robinhood is optimized for mobile and active traders, though it could also work for long-term investors looking to avoid fees standard at other online share trading centers. Customers can optionally upgrade to Robinhood Gold for $5 to access additional features, including margin borrowing and instant deposits up to $50,000.. And unlike several names on this list, Robinhood also supports crypto trading – although at present only seven coins are tradable on the platform.

Potential drawbacks: Robinhood doesn’t support mutual funds, which is a drawback for some investors. It also requires a $5 monthly charge for all market data and research access. The biggest drawback of Robinhood is a history of outages and regulatory missteps, though it seems those issues may now be resolved. Regardless, it’s good to be aware before signing up.

Commissions and fees: Robinhood doesn’t charge any commissions or fees on trades. The only fee customers can incur is an optional $5 monthly charge for Robinhood Gold,  It should also be mentioned that Robinhood relies on the somewhat controversial practice of receiving Payment For Order Flow (PFOF) to monetize its clients’ trading activity in lieu of charging commissions.

Pros:

• No commissions or fees for regular use
• Trade stocks, ETFs, options, and cryptocurrencies
• Optimized for active, mobile traders

Cons:

• No mutual funds
• No retirement accounts
• History of brief outages and regulatory troubles

What makes it great: Charles Schwab is a tremendous all-around investment firm. It’s suitable for new and passive investors as well as highly active traders thanks to a combination of low pricing, a wide selection of investments, multiple trading platforms, and nearly any type of investment account you could want.

One standout product for new and passive investors is Schwab Intelligent Portfolios. This no-fee robo-advising platform handles your investments for you based on your investment profile and goals. It’s also noteworthy for offering both basic and professional-level trading platforms. The upcoming merger with TD Ameritrade is also good for Schwab users, as it comes with the highly-rated Thinkorswim investment apps.

Potential drawbacks: There are a few places where you might find Schwab doesn’t meet your needs. For example, while fractional shares are supported, the list is limited, and you can’t schedule recurring buys, like a weekly recurring purchase of a favorite stock or ETF. It also comes with meager interest rates for cash, including its otherwise excellent “high yield” online checking and savings accounts.

Commissions and fees: Most trades are commission-free, and most accounts have no recurring account fees. Options require a $0.65 cent per contract fee but no base commission. Schwab offers a vast list of mutual funds with no trading fees, but others require a commission. Over-the-counter (pink sheets or unlisted stocks) require a trading fee, and you’ll pay $25 extra per trade for broker assistance. There are some additional fees for other, less common activities.

Pros:

• Commission-free trades and no recurring fees for most accounts
• Support for most investment asset types
• Banking and investment accounts can meet most investor needs

Cons:

• Limited fractional share program
• Low interest rates on cash
• No cryptocurrency investments

What makes it great: E*TRADE offers 4,400+ no-load, no-transaction fee (NTF) mutual funds. That’s one of the largest lists of free funds that you’ll anywhere today. E*TRADE’s has a beginner-friendly platform as well as a robust trading platforms, called Power E*TRADE Pro. Both platforms are easy to use on mobile.

As a full-service brokerage, E*TRADE offers investments in stocks, ETFs, options, bonds, and futures. You can choose to open a regular, taxable brokerage account or an IRA, Individual 401(k), or Profit Sharing Plan. And E*TRADE also offers a robo advisor service, called E*TRADE Core Portfolios that’s available to clients with balances of at least $500

Potential drawbacks: It’s honestly hard to find things to complain about with E*TRADE. But if we’re being picky, the lack of support for fractional share trading disappoint some traders, especially those with smaller account balances. Also, you’ll need to look elsewhere if you’re wanting to trade crypto in addition to stock market assets.

Commission and fees: Stock, ETFs, and options trade commission-free at E*TRADE. There’s a per contract options fee that start at $0.65 but reduces to $0.50 if you make more than 30 trades per quarter. Futures cost $1.50 per contract and E*TRADE’s Core Portfolios come with an advisory fee of 0.30%.

Pros:

• Comprehensive trading platform
• User-friendly interface
• Accommodates investors of different levels

Cons:

• No fractional share trading
• Oriented towards active traders for options

What makes it great: Interactive Brokers is powerful enough for Wall Street investors managing institutional investment accounts. As an individual trader using the IBKR platform (the consumer version). IBKR Lite and IBKR Pro come with different pricing better suited for different types of investors, but mostly similar features.

The trading platform is top-notch and could make you feel like you’re in a fast-paced movie about the stock market. It supports a huge number of investment types with competitive pricing. It offers investor APIs, bots, and automations. This firm can meet the needs of any expert investor.

Potential drawbacks: IBKR may seem a bit overwhelming for beginners. With so many trading features and tools, the more complex platform is best for those with experience who intend to maintain their investment accounts actively.

Commissions and fees: IBKR Lite includes most features with no recurring fees or commissions for most orders. Fixed options trades cost $0.65 per contract with a $1 minimum. IBKR Pro has a more complicated pricing structure and is best for highly active traders.

Pros:

• Professional-quality trading platforms for desktop and mobile
• Trade a huge number of supported asset types, including cryptocurrencies
• Low fees with IBKR Lite

Cons:

• Several pricing models with varying complexity and fees
• Trading platforms may be overwhelming for some investors

What makes it great: TD Ameritrade is a top choice among active traders thanks to its Thinkorswim platform. While beginners and passive investors should find the main TD Ameritrade apps for desktop and mobile suitable, active traders will want to upgrade their experience with Thinkorswim, available to all users at no extra cost.

Thinkorswim mobile includes all desktop features, including customizable charts, live news, and live help with your trading strategy inside the app. It also has a free paper money (virtual trading) account to test your strategy risk-free.

Potential drawbacks: TD Ameritrade still doesn’t support fractional shares. Also, it’s no longer accepting new clients to its robo advisor service (Essential Portfolios) and has begun referring advisory clients to its parent company, Charles Schwab. So if you’re looking for a broker that can handle both your active and passive investing needs, TD Ameritrade may not be the best fit.

Commissions and fees: TD Ameritrade offers most trades and accounts with no commissions or ongoing fees. Like competitors, mutual funds are not always free, and options require a per-contract fee ($0.65). Phone and broker-assisted trades require a fee, as do other less common needs.

Pros:

• High-quality desktop and mobile trading apps
• Low fees and commissions for most investors
• Good for both beginners and experts
• Support for forex and futures trading

Cons:

• Doesn’t support fractional shares
• No robo advisor options

Are you in the market for a new online stock broker? Or are you new to investing and want to start with the best online stock broker around?

The best online stock brokers offer opportunities to invest in the assets you want with the lowest fees possible. Some offer automated and assisted investing, while others are specialized for do-it-yourself (DIY) investors.

To help you pick the best online stock broker for your unique investment needs and goals, we took a look at the most popular brokerage firms around to help you zero in on the right investment company for 2022 and beyond.