A stock broker acts as the connection between you and the exchange where stocks are being traded. Online stock brokers give you access to different investment products like stocks, ETFs, bonds, commodities, and other financial assets straight from your smartphone or laptop. With so many different types of online stock brokers available to investors, it can be tough to choose one that works best for you. We have user-tested and reviewed more than 70 online brokers and considered all their features in their current state to determine the top five in the industry right now.
Best Online Brokers
Our list of the top five online brokers:
- Fidelity Investments
- TD Ameritrade
- Charles Schwab
- Interactive Brokers
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
Fidelity has a combination of services, tools, and value. Last year, Fidelity focused on improving its infrastructure and reliability so it could avoid the crashes that plagued online brokers in 2018. Another improvement was making their Active Trader Pro platform available to all customers rather than requiring a certain number of trades to use. Fidelity improved the order entry interface to avoid the most common errors made by customers.
In October of 2019, all U.S. stocks and exchange-traded funds (ETFs) no longer incur a commission, and the base per-leg charge for options trades has also been eliminated. Options trades are $0.65 per contract under Fidelity's new pricing.
Excellent trade executions, generating price improvement for stock and options trades
ETF research center includes tools to show you which stocks compose the fund
All customers have access to Active Trade Pro
Fees are on the low side and are easy to understand
Accessing all of Fidelity's tools may require you to use multiple platforms
Finding a particular tool can be difficult on Fidelity’s extensive menu system
If you are not a U.S. citizen or resident, you cannot open an account
- 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.
TD Ameritrade, one of the largest online brokers, has several platforms to choose from, ranging from their basic website to thinkorswim, which is designed for very active traders. TD Ameritrade has also recently eliminated base trading commissions on equities, ETFs, and options for U.S.-based customers which moved them to the top of our list.
The firm spent the last year streamlining its website and transforming its education offering while bringing over the 3.5 million customers who joined following the acquisition of Scottrade. Given the number of platforms customers can use for research and trading, the sheer number of tools available can be overwhelming. There is an ongoing initiative to streamline the content and platforms, so going forward, it should be easier to find and use the features that you need.
Extensive research capabilities and numerous news feeds
The education offerings are designed to make novice investors more comfortable
More support channels have been developed using Facebook Messenger, WeChat, Twitter and others
The website is so packed with content and tools that finding a particular item is difficult
Clients may have to use more than one trading system to find all the tools they want
- 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.
Charles Schwab is a full-service investment firm that offers services and technology to everyone from self-directed active traders to people who want the guidance of a financial advisor. It has a wide variety of platforms as well as full banking capabilities. Over the last few years, its web-based platforms have been transformed to make them simpler to use while also providing low-cost advice. Charles Schwab has also eliminated its base commissions for stock and ETF transactions as well as its per-leg fee for options trades.
The Schwab Satisfaction Guarantee allows any client who is unhappy with any fee-based service to get a refund
Advanced options tools and trading ideas are built into the StreetSmart Edge platform
Mobile web platforms and native mobile apps offer the same functionality
It can take some effort to find the features you want the most
Schwab pushes clients towards using their financial advisors, which can make a self-directed investor or trader lose confidence in their own abilities
Margin rates are higher than average
- Account Minimum: $0
- Fees: $0.005 per share for the standard platform, $0 for IBKR Lite
Interactive Brokers has a wealth of tools for sophisticated investors. The firm makes a point of connecting to any electronic exchange globally, so you can trade equities, options, and futures around the world and around the clock, on your desktop or mobile device. Though Interactive Brokers has been adding features to attract more assets and help newer investors, including its own robo-advisory, we recommend that newcomers to trading start somewhere else and grow into their extensive capabilities.
Interactive Brokers has launched IBKR Lite, where clients pay no commission on U.S.-based equities but are restricted to the web-based Client Portal and IB's mobile apps.
Pricing is on the low end, especially margin rates
The platform and services are geared for extremely active traders
Clients can trade on 120 markets in 31 countries, using 23 currencies
Excellent portfolio analysis features
Mosaic, Interactive Brokers' downloadable platform, can be difficult to use for a new investor
Does not support education accounts (529s).
Very small or inactive accounts may be subject to maintenance fees or data charges
- Account Minimum: $0
- Fees: No commission for stock/ETF trades. Options are $0.50-$0.65 per contract, depending on trading volume.
E*TRADE features robust trading and analysis software. E*TRADE’s advanced trading platform, launched in December and called Power E*TRADE, integrates the options trading and education tools via their acquisition of OptionsHouse, and should provide a lot of value to stock and options traders.
E*TRADE eliminated its base trading commissions on equities, ETFs, and options in the U.S., effective October 7th, 2019. Margin interest rates are near the top of the brokers we surveyed.
Streaming strategy options chains are a relatively unique tool
Futures traders can use the mobile futures ladder. Its capabilities will be available for other asset classes over the coming year
The performance risk tools let you stress test your entire portfolio, or just a single asset or potential trade
The advanced options tools are included in the Power E*Trade app but not the regular E*Trade mobile app
High margin rates
No bank integration
What to Consider When Choosing an Online Broker
When you are choosing an online stock broker you have to think about your immediate needs as an investor. Are you a beginner? Maybe you need a broker that has great educational material about the stock market. Do you only have a small amount of money you can put aside to invest? Some online brokers allow for small minimum deposits which can be a great option for those with limited funds. Are you always on the go and in need of a robust mobile platform? Some stock brokers have incredible mobile apps delivering nearly all the features that their desktop counterparts do.
Another important thing to consider is the distinction between investing and trading. When people talk about investing they generally mean the purchasing of assets to be held for a long period of time. These types of investments are usually made to reach a retirement goal or to put your money into assets that may grow faster than it would in a standard savings account accruing interest. Trading, on the other hand, most commonly involves the buying and selling of assets in short periods. Trading is generally considered riskier than investing.
All of these factors must be considered before choosing an online broker. Do you want to trade or invest? Do you want a great mobile app to check your portfolio wherever you are? What types of assets are you looking to invest in? Answering these questions is not always easy. You can check out our guide to choosing a stock broker to gain further insight so you can make a sound decision. Once you've made a decision on a broker, you can also check out our guide to opening a brokerage account.
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.