Unlike long-term investing for the future, active stock trading has qualities in common with gambling. On top of that, it’s expensive gambling. When you step up to a quarter slot machine, you know each bet will cost a quarter. You don’t lose a nickel on each spin as a “transaction fee.” In order to play the stock market, with “play” being the operative word, you lose money right off the bat in the form of commissions.
So if you’re going to invest in stocks, it makes sense to find the least expensive option. Here are some of the more popular choices, updated for 2016. If you have experiences with these brokerages, please feel free to share your comments at the bottom of this article.
Low Annual Fee
Betterment  . Betterment is a brand new investment website which takes all of the guesswork out of making money. Similar to other brokers on this list, Betterment allows users to purchase stocks and bond ETF’s but focuses more on automation, so investors don’t have to spend hours each week putting together their portfolio. Fees are charged on an annual basis and a $25 cash bonus is given to all new investors who sign up specifically from Consumerism Commentary.
TradeKing . This online brokerage features low $4.95 online trades. SmartMoney Magazine has awarded TradeKing the award for Best Discount Broker in 2006 and 2007 and Best Customer Service among discount brokerages in 2008. TradeKing continually sports $50 cash bonuses for signing up during the summer and offers users a community of stock traders to help you make the best decisions for your portfolio.
Scottrade . Three years ago, Wachovia announced they were adding a $50 annual fee to my discount brokerage account. I tried to get the fee waived, but my protests fell on deaf ears. Rather than paying the $50 fee once and continuing to do so every year, I opted to pay the $75 account termination fee to move my funds to Scottrade. Scottrade offers no account fees other than the $7 commission for online trading. As I was holding only one mutual fund and I didn’t plan to do any trading, the account was free for me.
Since I am not an active trader, I don’t actively seek out new discount brokerages. If you have experiences you’d like to share, please leave comments below.