To grow your money, it's important to invest wisely. Just as, “one size doesn’t fit all,” the same investment product doesn’t suit all investors. Every investing product class has numerous variations and comes with varying risk-return equations. However, one thing common to all these products is the need for a brokerage account to be able to invest and manage investments directly. These accounts facilitate the buying and selling of stocks, ETFs, mutual funds and other products, along with offering a wide range of services that vary from broker to broker. The right choice for each investor or trader depends on their needs and level of expertise. For instance, most discount brokers offer trading commissions of between $5 and $7 per trade. However, these brokers offer little guidance and no human contact at those price levels. This may be fine for knowledgeable traders and investors, who don't need advisory services—but others may need a higher level of service.
Here is a partial list of brokers that would serve a variety of investor well, with services available at different levels to fit their needs.
TD Ameritrade Holding Corporation (AMTD) is of one of the most reputed stockbrokers in the US and offers online stock trading at $6.95 per trade (market or limit orders). However, the charges for the Interactive Voice Response (IVR) phone system and broker-assisted trades are much higher at $34.99 and $44.99 per trade. The trading platform charges a single commission for the orders executed in multiple lots on the same trading day.
In case of partial execution that spreads across multiple trading days, there is a separate commission charge for different days on the order. There is no platform or maintenance fee.
Kiplinger’s 2018 article on the best online brokerages says, “TD Ameritrade distinguishes itself with its commitment to investor education. The website’s education center is a treasure trove of short explanatory videos on everything from the basics of money market accounts to the ins and outs of cryptocurrency.”
E*TRADE (ETFC) charges different rates, depending on the number of trades per quarter. The standard commission is $6.95 per trade, but if an investor completes 30 trades in a quarter, the commission drops to $4.95 per trade. There is an extra charge of $25 in case of broker-assisted trades.
E*TRADE offers solid research, innovative products, high-class customer service, and user-friendly experience to its account holders. An initial deposit of minimum $500 is required to open an account.
Charles Schwab Corporation (SCHW) does not have a required minimum balance to open an account. The brokerage charges $4.95 per online trade, in case the trader uses automated phone service, another $5 is added to it. The charges are higher when traders are looking for assistance from the broker. It costs regular trading charges plus another $25. There is no maintenance fee charged by the trading platform.
Charles Schwab was funded in 1973 and provides a high-quality trading platform equipped with research, customer service, expert perspectives on markets, advisory services, and ease of use. The 46-year-old brand manages clients' assets worth $3.36 trillion (as of 2017).
T. Rowe Price
T. Rowe Price brokerage is a part of T. Rowe Price Investment Services, Inc. (TROW). The trading platform offers reliable in-depth research and convenience in trading. The charge for trading stocks is $9.95 per trade for all accounts that have executed more than 30 trades in the prior 12 months. Otherwise, trades are $19.95 per trade. In cases where a tele-trader service is desired, an additional $35 per trade is charged up to 1,000 shares. Thereafter, the charges are $0.02 for each share.
WellsTrade is the broking arm of Wells Fargo & Company (WFC), the well-known financial services company with operations spread across banking, insurance, investments, mortgage, and consumer and commercial finance services. The WellsTrade Account commissions range from $2.95 to $5.95 per trade. This commission structure is applicable to automated telephone trading of stocks and online trading. Agent-assisted trading costs an additional $25 is applicable over and above the online trading commission.
The Bottom Line
There are many kinds of costs associated with a brokerage account in the form of fee and commissions. Some of the main charges linked to a brokerage account are trading fees, account maintenance charges, fees for broker-assisted orders, charges when trading on margin, and finally a fee on withdrawal and transfer. These charges are different with every broker and with even account type. One thing that almost all brokers offer is better rates and more concessions for serious players in stocks, which they usually define in terms of trades over a certain period.