Interested in making ETFs a part of your portfolio? Exchange-traded funds (ETFs) offer an affordable way to build a diversified portfolio, thanks to their expense ratios and greater tax efficiency than mutual funds. ETFs are simple to trade since the transactions take place, much like stocks, on regulated exchanges. ETFs can be traded on margin, have no short-selling restrictions, and provide intraday trading opportunities and plenty of liquidity. A large percentage of ETFs are optionable as well, allowing traders to manage their portfolio risk using derivatives.

Best for ETFs

Our list of the top five brokers for ETFs:

  • Charles Schwab
  • TD Ameritrade
  • E*TRADE
  • Fidelity Investments
  • Vanguard

Charles Schwab

4.5
  • Account Minimum: $0
  • Fees: Free stock, ETF and options trading commissions in the U.S., as of October 7th, 2019. $0.65 per options contract.
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Charles Schwab eliminated its base commissions for stock and ETF transactions as well as its per-leg fee for options trades. Schwab provides plenty of tools designed to help you select the best ETFs for your portfolio, including their ETF Select List and ETF Portfolio Builder, which you can use to create a diversified portfolio of ETFs based on your financial goals, risk tolerance, and time horizon. All customers can use Schwab’s platforms for free, regardless of account size or trading activity.

Pros

  • ETF Portfolio Builder helps you build a diversified portfolio quickly

  • ETF screeners help you find the best funds for your portfolio

  • Clients can use all of Schwab's platforms and mobile apps for no additional fee

Cons

  • A plethora of platforms can make tools hard to find

  • Constant push towards hiring a Schwab financial advisor

TD Ameritrade

4.5
  • Account Minimum: $0
  • Fees: Free stock, ETF, and per-leg options trading commissions in the U.S., as of October 3rd, 2019. $0.65 per options contract.
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TD Ameritrade eliminated base trading commissions on equities, ETFs, and options for U.S.-based customers. The company offers free access to all its trading platforms, including the pro-level think-or-swim platform and two mobile apps. Customers have access to a good selection of educational content, including articles, videos, and in-person events at one of more than 360 branch locations throughout the U.S.

Fidelity Investments

4.5
  • Account Minimum: $0
  • Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
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Fidelity’s ETF Research Center offers ETF/ETP comparisons, expert commentary and research, and a screener that lets you search by dozens of criteria, including volatility, fundamentals, technical, exposures, performance and analyst ratings.

Pros

  • ETF Research Center makes it easy to research and analyze ETFs

  • User-friendly mobile app

Cons

  • Accessing all of the tools Fidelity offers may require a customer to use multiple platforms

  • No 24/5 ETF trading

E*TRADE

4.3
  • Account Minimum: $0
  • Fees: No commission for stock/ETF trades. Options are $0.50-$0.65 per contract, depending on trading volume.
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E*TRADE eliminated its base trading commissions on equities, ETFs, and options in the U.S., effective October 7th, 2019. As a full-service financial institution, E*TRADE offers ample tools and resources designed to help you research your own investments, including E*TRADE’s All-Star ETF list, plus an ETF Screener and Prebuilt ETF Portfolios – a tool that helps you pick ETFs based on your investment time frame and risk tolerance.

What We Like

  • 24/5 trading on some very active ETFs, allowing you to respond to after-hours market news

  • Mobile app watchlists and tools sync up with web-based platform

  • 24/7 phone and live chat support

What We Don't Like

  • Above average margin rates

  • Like other brokers with multiple platforms and services, you may have to use more than one platform to find all the tools you’d like to use

Vanguard

4
  • Account Minimum: $3,000 for most mutual funds
  • Fees: $7/stock and ETF trade, $7 plus $1 per contract for options
  • Best for: ETF investing
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Vanguard is one of the world’s largest investment companies and is the world’s largest provider of mutual funds and the second-largest provider of ETFs (after BlackRock’s iShares). Their offerings are known for sporting below-average expense ratios. The company offers an impressive 1,800 commission-free ETFs from more than 100 providers, which is a huge majority of the funds available. You’ll pay $7.00 to trade all other ETFs.

Vanguard’s selection of commission-free ETFs and its low expense ratios can’t be beat. The company offers an online trading platform, but it’s very basic and not well suited for active traders or anyone who wants advanced charting capabilities. Still, if you want to invest in low-cost ETFs and don’t need a robust platform, or if you’d like an advisor to do the legwork, Vanguard might be a good fit.

Pros

  • Commission-free trading on about 1,800 ETFs

  • In-depth expert analysis

  • Notoriously low management expenses

  • Low-cost Personal Advisor Services

Cons

  • Account service fee if total Vanguard assets are less than $10,000

  • Bare bones platform is not suitable for active traders or charting gurus

  • Website can be challenging to navigate

Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.

In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.

Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.