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Best Online Stock Brokers Guide

Blain Reinkensmeyer

Published by Blain Reinkensmeyer


Monday, February 19th, 2018

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The StockBrokers.com annual review sets the official industry benchmarks. Our data is used by executive teams, and our ratings are referenced on earnings calls, national TV commercials, US Senate hearings, and throughout the web. We spend more than one thousand hours testing online brokerage accounts every year. Industry leaders trust us because our rigorous testing is totally independent and 100% unbiased.

Choosing an online stock broker is one of the most important decisions you will make as an investor. Every trader has a different investment style of stock and options trading, and the variety of services brokers offer allows individual traders to be highly selective in determining which online broker best fits their needs.

To help stock traders, this guide aims to introduce online trading and offer indispensable advice relating to unique and helpful aspects of these online platforms, the way they function, and how they can best be utilized.

As the head of research here at StockBrokers.com, I have been an online stock trader since 2001, placing over 1,000 stock, options, forex, and crypto trades and counting. To conduct my testing, I have a funded brokerage account with over a dozen different brokers.

Best Online Stock Brokers (Summary)

Best Online Brokerages for Trading

Here's a breakdown of some of the best online brokers for stock trading.

Fidelity

Fidelity - Best for Investors

Fidelity Investments charges $4.95 per trade and received 5 stars in our 2018 Review, including being awarded Best in Class for 12 different categories. It is our top recommendation for discount trading. The company also took home the #1 awards for Research, Order Execution, and Ease of Use. Finally, Fidelity’s mobile app was rated Best Mobile App for Investors. Read more...

TD Ameritrade

TD Ameritrade - Best for Traders
Exclusive Offer: Trade free for 90 days + get up to $600 cash.

Rated our #1 online broker for traders in 2018, TD Ameritrade charges $6.95 per trade and offers the largest variety of trading tools through its desktop-based thinkorswim and Mobile Trader platforms. It also ranks #1, alongside its Best in Class rating, for numerous other categories including New Investors, Active Trading, Options Trading, and Customer Service, among others. Read more...

Charles Schwab

Charles Schwab - Best for Retirement
Current Offer: Earn 500 commission-free online trades at Schwab.

Charles Schwab charges $4.95 per trade and was rated 4.5 Stars Overall, alongside its #1 for Retirement Services and 5 stars for Research. Extensive research access along with consistent customer service, ample tools, the largest selection of commission-free funds, and industry-leading market reports combine to present a great full-service brokerage. Read more...

ETRADE

E*TRADE - Best for Options, Mobile
Current Offer: Trade Free for 60 Days & Get Up to $600.

E*TRADE, with its $6.95 stock trades, finished fourth overall with 4.5 stars in 2018. E*TRADE was awarded 5 stars and #1 for Options Trading, thanks to its OptionsHouse by E*TRADE trading platform. The broker also won first place for Mobile Trading, and offers well-rounded access to quality research, trading tools, education, and more. Read more...

Interactive Brokers

Interactive Brokers - Best for Professionals
Exclusive Offer: New clients that open an account today receive a special margin rate.

Designed for professional traders serious about their craft, Interactive Brokers offers only per-share pricing ($.005 per share with a $1 minimum per trade), and charges up to $20 per month between two minimum activity fees. Traders who can meet its $100,000 minimum deposit for margin trading are rewarded with an industry-leading commissions schedule, margin rates, and full support for international trading. Read more...

Merrill Edge

Merrill Edge - Best Rewards Program
Current Offer: Invest in a new account and get up to $600.

Merrill Edge ($6.95 per trade) was awarded #1 for Banking Services, thanks to its parent company, Bank of America. Not limited to just BofA customers, Merrill Edge's Preferred Rewards program is excellent, offering $0 stock trades among other perks such as bonus rewards on credit cards and discounted mortgage rates. Read more...

TradeStation

TradeStation - Best for Platform Technology
Current Offer: Low Fees and Free Market Data. Trade with TradeStation.

TradeStation's advanced trading platform has been awarded Best Platform Technology for the past five years. For active traders, TradeStation was rated 5 stars and comes packed full of tools and functionality. Trades are just $5 and users can even code their own apps using the broker's proprietary EasyLanguage programming language. Read more...

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Ally Invest

Ally Invest - Best for Ally Banking
Current Offer: Up to $3,500 cash bonus + commission free trades for new accounts.

Ally Invest (previously TradeKing) provides $4.95 trades, and is a simple choice for current customers of Ally who are looking to invest in the stock market. Like Merrill Edge and Capital One Investing, customers can easily manage their banking and brokerage accounts under one login. Read more...

Best Trading Tools

Based on 59 different variables, here is a summary of the top five brokers for stock trading tools and trade platforms.

To trade online successfully, some investors rely purely on their trading tools. Today’s trading platforms are not only web based, but also desktop based, and are becoming increasingly mobile based as well. Advanced charting, options tools, screeners, hotkeys, virtual trading, watch lists, ladders, Level II quotes, and back testing are just a sampling of the functionality brokers make available to their customers.

Over the years, I have learned it is not just the trading tools that separate brokers, but the design, depth, speed, and overall execution of delivering the ultimate trading experience.

Over the years, I have learned it is not just the trading tools that separate brokers, but the design, depth, speed, and overall execution of delivering the ultimate trading experience. This is where brokers such as TD Ameritrade’s thinkorswim and TradeStation really excel. After spending hundreds of hours on both desktop platforms, we give thinkorswim the edge, thanks to its modern feel and outstanding trader tools; however, both platforms execute so well that it truly comes down to personal preference. Die-hard fans exist for both, and either one is a great choice for seasoned traders.

TD Ameritrade thinkorswim platform
TD Ameritrade thinkorswim platform.

Behind thinkorswim and TradeStation, Fidelity’s Active Trader Pro and Schwab’s StreetSmart Edge are two desktop platforms worth looking at closely. Active Trader Pro and StreetSmart Edge have one distinct advantage over thinkorswim and TradeStation, and that is ease of use. While these platforms do not offer the same depth of trading tools, historical data, chart studies, etc., both are very well designed and user-friendly. In some respects, their balance of power and design make them a better fit for certain traders.

Fidelity Active Trader Pro platform
Fidelity Active Trader Pro.

Investors who prefer a web-focused experience have a choice of several great browser-based platforms. Our top pick again this year, Power E*TRADE, combines the best of both worlds: ease of use with fantastic trading tools. The platform is just “ok” for equities trading, but is terrific for options trading. See: Best Brokers for Options Trading.

Power E*TRADE option snapshot analysis
Power E*TRADE option snapshot analysis.

Before selecting a broker based on its platforms and tools, take time to read our online broker reviews, narrow your search to two or three brokers, compare their offerings, then make a decision.

Best Brokers for Stock Analysis

Based on 60 different variables, here is a summary of the top five brokers for stock research:

  1. Fidelity - Scored 98%
  2. Charles Schwab - Scored 97%
  3. TD Ameritrade - Scored 97%
  4. E*TRADE - Scored 92%
  5. Merrill Edge - Scored 90%

It is not surprising that the largest, most publicly known online brokers excel, and all vie for the top spot for research. With larger client bases and higher commission costs, high-quality research is expected.

Comparing apples with apples, all five brokers are fairly similar. They all use Morningstar as their primary provider for Exchange Traded Funds (ETF) and mutual fund research, all of them offer a slew of data and graphs for researching stocks, and all offer fixed-income research. Slight differences begin to show only when you assess specifics such as total third-party research reports available for equities, for example Apple (AAPL). In that category, the title goes to Fidelity, with 12 total reports offered, followed by Charles Schwab with eight, and TD Ameritrade with seven.

All in all, when it comes to researching stocks, ETFs, mutual funds, and fixed income, any top five broker is going to provide an excellent experience for investors.

While any of these brokers will more than satisfy most investors’ appetites, deciding on a winner based on checklists alone is not enough. Quality and design matter just as much as quantity, not to mention the fact that many brokers will go “above and beyond” to differentiate themselves.

Fidelity, which earned our No. 1 spot again this year, stands out for its 12 equity research reports and fantastic stock comparisons, allowing customers to compare up to five stocks at once with 21 different metrics. Fidelity also distributes high-quality market analysis and personal finance education through its Fidelity Viewpoints weekly distribution. What excites us most about Fidelity is its fully responsive (mobile friendly), carefully laid out research area. Content flow and personalization are at the heart of the experience, which is unlike any other broker in the industry.

Fidelity account stock quote
Fidelity account stock quote.

Charles Schwab, on the other hand, offers customers its own proprietary A – F ratings, called Schwab Equity Ratings, for some 3,000 US stocks. Even more impressive, Schwab boasts a full lineup of 26 in-house experts who provide numerous articles, known as Schwab Insights, on a variety of market topics throughout each week. Some experts, such as Chief Investment Strategist Liz Ann Sonders, can often be seen on TV discussing the market. Schwab also provides the best video experience out of all the brokers, thanks to its market updates and Schwab LIVE events.

schwab equity rating summary apple
Charles Schwab Equity Rating summary Apple.

Not to be outdone, TD Ameritrade won our Best New Tool award in 2017 for the earnings analysis tool offered on its thinkorswim platform. TD Ameritrade also offers what it calls Social Signals analysis for individual equities. Using proprietary algorithms, the Sentiment Score shows what percentage of tweets are positive and displays other relevant metrics. Additionally, in the social realm, TD Ameritrade analyzes data from its six million retail customers to create what it calls the Investor Movement Index (IMX), which displays and analyzes the sentiment of its retail investors’ portfolios.

td ameritrade thinkorswim earnings analysis
TD Ameritrade thinkorswim earnings analysis.

Staying on the theme of unique research tools, Merrill Edge offers Stock Story, which makes researching individual stocks both educational and insightful. Each company’s stock story is broken into four separate chapters: “Who is this company?”, “How are they doing?”, “How has their stock performed?”, and “What do analysts say?” Through Stock Story, the full spectrum is covered, including both fundamental and technical research. Even environmental, social and governance (ESG) ratings data is included.

merrill edge stock story apple
Merrill Edge Stock Story Apple.

All in all, when it comes to researching stocks, ETFs, mutual funds, and fixed income, any top five broker is going to provide an excellent experience for investors. With such similar offerings, it’s the unique experience, features, and functionality that differentiate the brokers.

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Best Brokers for Investment Products

Based on 40 different variables, here is a summary of the top five brokers for investment products:

  1. Interactive Brokers - Scored 96%
  2. TD Ameritrade - Scored 91%
  3. Charles Schwab - Scored 89%
  4. Fidelity - Scored 88%
  5. E*TRADE - Scored 87%

Investing covers a global spectrum, from investing in international equities to trading forex to purchasing US treasury bonds. To understand the true range of offerings, StockBrokers.com assessed all the broad investment channels down to the specific order types each broker offers.

Thanks to its focus on professional and institutional trading, Interactive Brokers takes the crown.

Thanks to its focus on professional and institutional trading, Interactive Brokers takes the crown. Do you require advanced order types? Not a problem. Interactive Brokers offers customers an arsenal of 63 different order types. What about trading internationally? Easy. Interactive Brokers offers trading in 26 countries and over 120 market centers. The list goes on and on.

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Best Brokers for Banking Services

Based on 13 different variables, here is a summary of the top five brokers for online banking services:

  1. Merrill Edge - Scored 99%
  2. Charles Schwab - Scored 94%
  3. Fidelity - Scored 77%
  4. Ally Invest - Scored 76%
  5. E*TRADE - Scored 73%

To determine which broker is the best for banking, we dived in head first and explored all the potential services: checking accounts, savings accounts, debit cards, credit cards, and mortgages. We then looked at specialty offerings such as mobile check deposit, debit card ATM fee reimbursement, and no-fee banking. Lastly, the total number of branch offices was factored in, as access to local branch offices is just as important as managing an account online.

It should be no surprise that our #1 choice is Merrill Edge, whose parent company is Bank of America.

It should be no surprise that our #1 choice is Merrill Edge, whose parent company is Bank of America. With a Financial Solutions Advisor (FSA) located in 2,167 out of a total 4,480 locations, Bank of America has, by far, the largest network.

Bank of America really shines with its rewards program, Preferred Rewards, which offers customers with certain account thresholds a range of benefits. The first tier, Gold, requires at least $20,000 in combined assets between Bank of America and Merrill Edge, while the top tier, Platinum Plus, requires at least $100,000 in total assets. Benefits include boosts to money-market savings, credit card cash back bonuses, free trades with Merrill Edge, and more. All in all, there isn’t a better marriage of brokerage and banking than Merrill Edge and Bank of America.

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Best Brokers for Customer Service

Based on 260 phone tests over ten weeks, here is a summary of the top five brokers for customer service (view infographic):

  1. TD Ameritrade
  2. Fidelity
  3. Merrill Edge
  4. Charles Schwab
  5. TradeStation

When assessing customer service, one phone call is not enough. To gauge the quality of support properly, multiple tests across every channel must be conducted. Here at StockBrokers.com, we are proud of the fact that our testing is respected as the most rigorous in the industry.

To ensure the highest quality testing data, we partner with professional private shopping group Confero.

To ensure the highest quality testing data, we partner with professional private shopping group Confero. With customers such as Coca Cola and Shell, Confero understands how to read between the lines and identify truly superior customer service. Using our StockBrokers.com industry-specific templates, Confero made 260 phone calls to branch offices and support numbers across the United States.

This year, TD Ameritrade was once again able to take the No. 1 spot overall, edging out Fidelity. The consistency and ability of TD Ameritrade’s support reps to repeatedly deliver an A or A+ experience is truly impressive.

Compare Category Winners

Choosing the Best Online Brokerage

When looking for a new online broker, make sure you meet your most important needs as an investor. Are low-cost trade commissions most important? What about customer service, the trade platform, mobile trading, active trading, or a community to trade alongside? With many brokers specializing in different areas, it is vital to evaluate and compare all the possibilities.

Here is a list of the most important factors to remember when selecting an online brokerage:

  • Trading Costs - When trading stocks online, it is important to understand what the costs are to place buy or sell orders. Most online brokers charge a flat rate to buy and sell. That said, other miscellaneous day trading costs can be incurred for direct routing fees or accessing market data. If you are investing in a retirement account, it is important to avoid choosing a broker that charges annual IRA fees.
  • Trading Tools - One of the most common misconceptions newer investors have is that low trading costs are the most important consideration. This couldn't be further from the truth. Having access to a fully featured desktop-based or web-based trading platform can make a big difference, especially when conducting technical analysis.
  • Investment Products - Are you only trading stocks online, or are you interested in ETFs, mutual funds, options, futures, and forex too? In the United States, different regulations are required for brokers who support more complex asset classes. Beyond trading different assets classes, having access to online banking and advanced order types, such as conditional orders, are also considerations.
  • Mobile Trading - Managing a stock brokerage account on the go is certainly important for traders who travel and frequently use their smartphones. While nearly all online brokerages offer mobile trading apps, not all are created equal. Features can vary dramatically.
  • Customer Service - 24/7 support is important to some investors, while others may just want to use online chat during regular market hours or receive an email back within one business day. Having access to quality customer support can really be the cherry on the top of a great client experience, especially during market crises like a flash crash.
  • Stock Analysis - Conducting fundamental research is critical to successful long-term investing. SEC filings, short interest, corporate debt levels, earnings growth, and more are all examples of important criteria to be investigated during fundamental investment research.
  • Regulation - Stock brokers based in the United States and governed by US law will be regulated by the SEC and must be members of FINRA and SIPC. The easiest way to verify whether your online brokerage is regulated is to scroll to the footer of their homepage and read their disclosures. Using the FINRA broker check tool is another easy way to verify proper compliance.
  • Banking Services - Online brokerage accounts are not limited to just stock trading. Instead, customers can take advantage of banking services offered by full-service brokerages (this is where Merrill Edge shines). Some online brokers offer checking accounts, savings accounts, credit cards, and more with deposits of up to $250,000 backed by the FDIC.
  • Account Security - Fortunately, today’s investors don’t have much to worry about when it comes to account security as long they choose a brokerage that is large, well known, and properly regulated. Reference our list above or below for a sampling. Every website should be secured with SSL encryption, and client data should be stored in secure servers. Dual-factor authentication and Touch ID are other security protocols quickly growing in popularity.
  • Order Execution - It is important to understand how your order is routed and executed. Make no mistake, there is a wide variation between quality execution and poor execution. Unfortunately, most online stock traders can't tell the difference.
  • International Trading - The US stock market is the most respected in the world. If you are living in the US and want to trade internationally, or are living abroad and want to trade stocks online with a US-regulated brokerage, you must do your research beforehand and find a broker that supports your requirements.

Best Online Brokerages (Summary)


Online Broker Best For Minimum Deposit Commissions Overall Rating
Fidelity Best for Investors $0 $4.95 5 Stars
TD Ameritrade Best for Traders $0 $6.95 5 Stars
Charles Schwab Best for Retirement $1,000 $4.95 4.5 Stars
E*TRADE Best for Options $500 $6.95 4.5 Stars
Interactive Brokers Best for Professionals $10,000 $.005 per share 4.5 Stars
Merrill Edge Best Rewards program $0 $6.95 4.5 Stars
TradeStation Best Platform Technology $500 $5.00 4 Stars
Ally Invest Best for Ally Clients $0 $4.95 3.5 Stars

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References

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All pricing data was obtained from a published web site as of 09/01/18 and is believed to be accurate, but is not guaranteed. The StockBrokers.com staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page. For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.

TD Ameritrade, Inc. and StockBrokers.com are separate, unaffiliated companies and are not responsible for each other’s services and products. Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading privileges subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options. Offer valid for one new Individual, Joint or IRA TD Ameritrade account opened by 9/30/2018 and funded within 60 calendar days of account opening with $3,000 or more. To receive $100 bonus, account must be funded with $25,000-$99,999. To receive $300 bonus, account must be funded with $100,000-$249,999. To receive $600 bonus, account must be funded with $250,000 or more. Offer is not valid on tax-exempt trusts, 401k accounts, Keogh plans, Profit Sharing Plan, or Money Purchase Plan. Offer is not transferable and not valid with internal transfers, accounts managed by TD Ameritrade Investment Management, LLC, TD Ameritrade Institutional accounts, and current TD Ameritrade accounts or with other offers. Qualified commission-free Internet equity, ETF or options orders will be limited to a maximum of 250 and must execute within 90 calendar days of account funding. No credit will be given for unexecuted trades. Contract, exercise, and assignment fees still apply. Limit one offer per client. Account value of the qualifying account must remain equal to, or greater than, the value after the net deposit was made (minus any losses due to trading or market volatility or margin debit balances) for 12 months, or TD Ameritrade may charge the account for the cost of the offer at its sole discretion. TD Ameritrade reserves the right to restrict or revoke this offer at any time. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. Please allow 3-5 business days for any cash deposits to post to account. Taxes related to TD Ameritrade offers are your responsibility. Retail values totaling $600 or more during the calendar year will be included in your consolidated Form 1099. Please consult a legal or tax advisor for the most recent changes to the U.S. tax code and for rollover eligibility rules. (Offer Code 264) TD Ameritrade Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2017 TD Ameritrade.

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