Best Online Brokers of 2021
Let’s get this out of the way. There is no one best online discount broker for everybody. What will be the best choice for you will depend on many factors. And what works for you may not be the ideal option for somebody else.
We’ve used a number of brokers, including Scottrade, Ally Invest, OptionsHouse, Motif, Vanguard, and several robo advisors. We’ve compiled this list of the best online brokers based on personal experience.
Best Discount Brokers
Let’s start with our top picks by category. Then we’ll look at each option in more detail.
Betterment – Betterment is not your typical discount broker. They’re a robo advisor that advertises a simple free structure to your investments. The fee to invest with Betterment is 0.25% annually. If you want to take advantage of their CFP’s, they have a Premium plan that requires a minimum of $100,000 invested and a fee of 0.40%
However, there are no trading fees or other fees associated with your account. Experts choose the investments and Betterment is confident in average annual returns much greater than the fees they charge. As a bonus, Betterment is offering new account holders some time without fees. The length of time depends on the dollar amounts invested
- one month free for $15,000 deposited
- six months free for $100,000 deposited
- one full year free for $250,000+ deposited
Ally Invest – Ally recognized that TradeKing was one of the greatest online discount brokers and decided to gobble them up. Not only can you trade with Ally, but you can also open up an online savings, check and CD accounts with the big bank. Stock trades cost $0 per trade and contracts will run you $0.50. Ally Invest also offers a robo-advisor service for those who aren’t looking to invest themselves.
The current sign-up bonus can be quite lucrative. New account holders can earn up to $3,000 in bonus cash. Sadly however, they do not offer a fee free ETF’s. So while this is a terrific option for low cost trades and robo investing, it lacks a few of the finer details you can find elsewhere on this list.
E*Trade – One of the few online discount brokers that offer volume based pricing, E*Trade was the very first online broker I used back in 2005. If you’re a high volume trader, trading 30 or more times per quarter, a stock trade is $4.95. Low volume traders will pay the rate of $6.95 per trade. Options contracts also offer volume pricing, with contracts costing $0.75 a piece at the low volume threshold and $0.50 a piece at the high volume threshold (again, 30 trades per quarter).
There is a $500 minimum to open your E*Trade online discount brokerage account and for a limited time, new accounts can trade commission free for 60 days on a deposit of $10,000 or more. For those wondering why OptionsHouse didn’t make our list; that platform was sold to E*Trade last year. The conversion is now complete, so anyone who owned an OptionsHouse account is now a proud member of E*Trade.
Fidelity Investments – If you can make at least 36 trades per rolling 12 month period, Fidelity Investments offers my favorite trading platform -Active Trader Pro. It has the most advanced trading features for both mobile and desktop users. You’ll also have access to dedicated trading specialists. The minimum to open a Fidelity Investments account is $2,500 which is a bit high compared to the $500 minimum most others require. Their costs are simple: $4.95 per stock trade and $0.65 per option contract.
Fidelity Investments kicks off new account holders with the promise of free trades.
- Deposit $50,000 and earn 300 free trades for the first TWO years
- Deposit $100,000 and earn 500 free trades for the first TWO years
Fidelity also offers a wide variety of other accounts, including deposits, credit cards and bill pay.
TradeStation – Straight forward, discount pricing is what you can expect with TradeStation. All stock trades are $5 and all options contracts cost $0.50. There are no software fees, no additional trading fees to speak of. TradeStation includes a top notch trading platform, mobile app and Radar Scanner. With Radar Scanner, you’ll have the ability to look through a thousand ticker symbols at once, real-time to find patterns and trading opportunities.
One feature that stands out is that for customers who open an account with $500,000 or more, TradeStation will pay a 0.40% APY on the balance of your account. Most every other discount brokers offers little to no APY on your deposited funds (I could find none greater than 0.01%). This interest-sharing program is set to expire on December 31st, 2017.
Beyond this feature, there is currently no up-front incentive to open a TradeStation account.
TD Ameritrade – TD Ameritrade offers it’s clientele stock trades for $0.00 a piece. Options trades will cost $0 per trade and $0.65 per contract and if you’re in need of a broker, assisted trades run the rate of $25. Perhaps the greatest feature of owning a TD Ameritrade account is use of their Trade Architect technology. You’ll have access to streaming news, trading specialists and level two quotes using this platform.
Advertising disclosure – ConsumerismCommentary.com is partners with TD Ameritrade and we may receive compensation from them. Content was not influenced by the advertiser.
Capital One Investing – What used to be known as ShareBuilder is now Capital One Investing. After their purchase of ING, Cap One has launched itself into the online discount broker space with a terrific sign-up bonus. Depending on how much you’re willing to open your account with, you stand to earn between a $50 and $600 cash bonus. The breakdown of the bonuses (with promo code GET600M17) earned are as follows:
- $5,000 deposit earns a $50 bonus
- $15,000 deposit earns a $100 bonus
- $50,000 deposit earns a $200 bonus
- $100,000 deposit earns a $300 bonus
- $200,000 deposit earns a $600 bonus
If however you cannot meet any of those initial deposit amounts, fear not. Capital One is also offering a free $50 for new account holders after they make their first trade. When signing up, use promo code M50FT17.
There is no minimum to open a Capital One Investing account and the cost per trade is a play $6.95. Options contracts will run you $0.75 per contract plus the base commission and if you dare, they’ll offer you a margin rate of 7.75%. Capital One Investing trading account has no account fees or annual fees.
How to Pick A Discount Broker
Here are the seven key factors to consider:
- Cost: The cost of trades is crucial for active traders. Here you want to find the lowest cost broker for the types of trades you make. For those who trade infrequently, like me, the cost is less important.
- Trading Frequency: This relates to cost, but it also relates to ease of use. Frequent traders spend a lot of time on their broker’s website. It should be easy to use.
- Tools: For technical traders, tools are critical. This is where it’s important to understand the type of investor you are. So you can be sure to get the tools that are most useful to you.
- Simplicity: This is the most important feature in my view. You want an online broker that’s easy to use.
- Types of Investments: Here it’s important to understand the types of investments you’ll be making. Do you want to invest in mutual funds and ETFs? Or will you be doing a lot of options trading? The answer to questions like these will often dictate which broker is best for you.
- Control: Simplicity and control are often mutually exclusive. A robo advisor gives you limited control, but wonderful simplicity. Interactive Brokers, in contrast, gives you wonderful control but far more complexity. There is no “right” answer here. It again depends on the type of trader you are.
- Account Type: Most brokers offer all of the basic account types, including various retirement accounts. If you are a small business, be sure to make sure they offer the account type you need. Examples include SEP IRAs and Solo 401ks.
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.
Very useful info. I will surely take care of it.
Sharebuilder is no longer for people living outside the US. Your citizenship has no effect – SB checks where you log in from. What will happen is that you can still check your positions but you can only sell, not buy. Now that Sharebuilder is part of Capital One instead of ING this no beyond-US-borders still holds.
Nobody mentioned Marsco. I’ve been using them for three years and think they’re great. $3.95 a trade. I used to be with Scottrade but they charge $7.00 a trade, but what really forced me to move is Scottrade started blocking trades on stocks that were moving up or down quickly and the only way to execute the trade was to actually call them and have them place it. I do a lot of trading. That nonsense cost me about $4000 in three months and I said enough is enough. Don’t have that problem with Marsco. The only negative for Marsco with some people might be that their online research is very very weak and almost non-existent. That means nothing to me because I never use the research tools on the brokerage sites but it may be a big deal to others.
Just wanted to mention that your info on ShareBuilder is not exactly accurate. The $4 you have listed is for their AUTOMATIC INVESTMENTS for the “basic” account. (The “Advantage” account, $12/mo service charge, gives you 12 free trades per month, $1/each after that..
Their ONLINE TRADES are $9.95 PER TRADE, even if you do multiple trades in one transaction, you will be charged $9.95 each time!!
Happy New Year!! 🙂
LOW TRADE IS BEST OF ALL
You have left off on the the best platforms for online trading, Merrill Edge with 25k of cash or 50k of enterprise wide assets between Bank of America and Merrill Edge 30 free stock/etf trades a month, otherwise they have very competitive $6.95 commissions.
Newbie here and after reading the comments to this article I have the same perspective as I did before: “Boiler room” thanks for sharing and I will not be “sharing” 🙁
2012 code – Get 3 free trades ($21 value) when opening a new account.
Can anyone please help me with information regarding OptionsHouse as a broker?
Has anyone used it? what do they charge for Electronic trading? does a trader have access to international markets with NO DIFFERENCE in price? (stocks from other countries like Canada or China, or Peru, etc.). My current broker wants to charge $75 in & $75 out! – $150 round trip!!. Talk about “robbery”. This is NEW NEWS TO ME. Just found out.
You can understand why I’m now looking for a new broker.
I would appreciate ALL comments to my mailbox please: [email protected]
Thanks and happy trading to all!
where can I find results that compare the fee to register stock in my name ( vs the street name ) among brokerage firms?
…are there other firms with lower prices?
@ Lyn, I use scottrade too and referred my roommate last year and they gave me $200 in gift cards, but I had to talk to a rep directly and tell them how much he was moving into the account. I bet you can get more than 3 free trades if you actually get someone on the phone and the sum of money is enticing enough for them. He was moving in $5k and I got the $200 so that should give you an idea of where to start when you speak with them.
New 2011 and 2012 Scottrade referral code: IXFV9382
Will get yuou 3 free trades when you open any type of Scottrade account.
Trade King goes down too often and it takes over 30 minutes to make a trade.. Be careful getting an account here if you really like to pay attention to the market.
I’ve never had that problem. Trades are usually instantaneous . Sometime it takes a little longer, but I’ve never had a problem with them being down.
You forgot SoGo Trade with $3 trades.
Be careful with SoGotrade, they lost 4K because they screwed up on Facebook IPO back in May 2012. I placed an order for 500 shares before it went public, and about an hour before it opened (late) I canceled. That following Monday morning I found out that I owned it, I couldn’t believe it so I called they admitted to me that the cancel order didn’t execute but when I spoke with the SoGotrade president told me he was not going to pick and choose who gets their money back because there were so many cancellations that didn’t execute…..so all they offered was a few free trades.
That same Monday I sold it and I wrote to the SEC, they gave the case to a woman who was worse than useless, she did nothing and they had the proof and everything I mailed to them, they needed to do something, my recourse of course was to hire an attorney which would cost more than I lost. Then they wonder why small investors say the stock market is a racket, and stay out, this is one good reason why some stay out.
I have one question, has anyone heard from the Facebook CEO yet? He got his money the day it opened so I guess he is done.
I have not traded with them since and took all my money out, I am presently looking for a new company, and closing SoGotrade, or Wang Investments.
I have used TDAmeritrade for several years. Trades are 9.99, you can usually get a promo with some free trades upon account opening. It’s not the cheapest. Their support has been good when I’ve had to call—–online trading was all new to me. I haven’t had any problems. The fee is probably a good thing—-it keeps me from trading too much on whims.
I was considering Ameritrade but saw no comments…
I’ve been using Ameritrade for about 10 years now and I haven’t had any negative experiences. Granted, I don’t do a lot of trading but I can say that their customer service is excellent.
Ameritrade is great. Only thing i dont like about them is that you can trade international stocks. If you want to invest only in the usa there decent but look at fidelity and interactive brokers if your a global investor
I have been using “Think or Swim,” which is owned by Ameritrade now, for quite a few years. I was actually here looking for another platform for less expensive trades, though theirs seem middle of the pack here. The problem I have is that Think or Swims option trading platform is incredible. I used OptionsExpress before I switched to Think or Swim. Before I would consider a switch, I would have to analyze another firms options analysis and I would not consider moving unless the analytic software is similar.
Charles Schwab is amazing. It has my favorite funds available in an IRA with low initial contribution requirements. The Index funds have a low contribution as well. Checking account is awesome. The ETFs have no commission costs. The 2% cashback visa card is fantastic. The customer service is great.
I love those guys to death.
I agree. The no commission ETFs are great and the 2% cash back credit cards is awesome.
I think SOGOTRADE is pretty good. It only cost $3 to make a trade (unlimited shares). They have good online and phone support, quick execution and a good inventory of shares that you can short! Oh and you only need $500 to open your account. You also get 100 free trades when you open your account. Can’t beat that.
Have anyone heard of, or have experience, with the following brokers: Interactive Brokers, TradeStation, TradeKing, SogoTrade, OptionsHouse, OptionsXpress, thinkorswim (owned by Ameritrade), FirsTrade, TradeMonster, Zecco, ScotTrade, e-Trade, ShareBuilder, Fidelity, Schwab, Vanguard, TDAmeritrade? Has anyone heard of Penson Financials and Genesis Securities?
I have been a member of SogoTrade for over 6-years now and up until a few months ago I had been recommending this brokerage to all my friends. However, since they have been taken over by Wang Investments (http://www.wangvest.com) the execution and customer service has really gone down hill.
I recently placed several trades over the last couple months and only one of them was executed as I had directed. Some market trades weren’t even executed at all!
I have liquidated my portfolio with SogoTrade and am shopping for a new brokerage firm, which by the way is why I landed on this page.
I also liquidated my portfolio with SogoTrade, I was pretty happy before they changed. Now it is a fight to even get a 1099 from them, they are saying March 15. Just as a side note, the number they used to use gets a disconnected message when you call it….
I have been with TradeKing since Feb. 1, 2011. GOOD: Can talk to or place order with human on phone for same price as DIY online: $4.95 per trade and +$.65 per option contract; TERRIBLE: Website inaccessible on “Chaos Monday”, Aug. 8, 2011, for 37 minutes at market open; then, unreliable off and on all day. I emailed my newsletter guy and he said he knew that the E-Trade website was up all day long and suggested I switch to them. They will cost me $9.95 per trade, but how much would it have cost me if my newsletter guy had said “sell” and I couldn’t access my account at TradeKing? E-Trade GOOD: I just learned that I can transfer my open positions from TradeKing to E-Trade without closing them and my account is an IRA. It will also be a direct transfer, not a Rollover (can only do 1 rollover per year). Yeah!
Trade King is associated with Penson. Don’t know what you are looking for, but I’ve been with Trade King for about 2 or three years. No problems so far.
I too had a very bad experience with Sharebuilder. They gave me wrong information and then they said it was my fault that they took double of the amount I requested to be transferred from my bank account. One supervisory said it was our fault, they’ll take care of it but I would have to call another day. I called another day, they said they can’t honor what they said before because this is a new day with new rules. I’m taking my business elsewhere. I’m looking for another company that honors their promises.
Anyone have experience with Sogo? I have Zecco account and find them very good, except for foreign stocks? I’ll be working on that with them 🙂
I took a good advice and signed up with scottrade.com and got 3 free
trades with this promo code: YWEU0574
i have had bad experiences with sharebuilder as they restrict the securities that you are allowed to invest in saying it must meet their criteria but when you show them that it does they then use the excuse that allowing you to invest in it will drive up the price and then you will be able to buy fewer shares
i think that they are hiding something as i always thought that when you buy shares in something it is a good thing if the price goes up
I’ve had problems with Sharebuilder as well. They recently lost a $600.00 check I mailed to them. After ten days, they blamed me. They also didn’t place trades that I had ordered at the opening of the markets as I had requested. My total loss due to their messups— $600.00 approximately. I’m now looking for another broker. Too many excuses.
As a young company Zecco is working out a few kinks, but improvements are being made quickly. We kick ass thanks to our social network and transparent investing community. What’s also cool is that investors can join our community without opening a Zecco account, so collaboration is free and transparency is celebrated.
John (ZeccoShare Community MC)
Plus you just raised fees by 55% on all stocks under $1 and eliminated all free trades.It is scary how you advertise $4.95 a trade and hide the $6.95 charge for stocks under $1 in your fine print. Who raises fees by 55%? Zecco does!!!!!
Beware of Zecco trading! They will execute canceled orders if it will push you into the paid trades number! Very scary! Best to stay far away from this one.
Customer service was totally incompetent as well when I complained about the canceled orders being executed.
I went back to Scottrade for now, the trading interface is much better, and canceled orders go away immediately, and you can change them as many times as you like.
E*Trade really rapes us on ESPP commissions. Even selling multiple blocks as a single transaction it seemed like they just multiplied the commission by the number of blocks.
Hey Flexo, thanks for the writeup on the different brokerages. I gotta ask – did you check out any of Zecco’s social features (ZeccoShare)? We think it really sets us apart!
Tony (Zecco Product Manager)
As of March 1, 2009, Zecco changed their policy regarding the minimum account balance required to be eligible for free trades. People should be aware that the minimum account balance to obtain free trades has increased from $2,500 to $25,000.
While this may not impact most “traders” who are accustom to paying fees for trades, the responses from Zecco customers were not positive. Per some of the other comments posted, review the “social community” responses to the recent changes. It appears that a number of customers felt alienated by the adjustment to the business model and applying those changes to existing customers.
It is important to note that Zecco still does not offer after hours trading, so if this is a feature that you value, it may be worth it to explore other low-cost brokerage options.
I became a customer of Zecco in 2007 and was initially attracted to the company because of the free trade model. I retained my ETrade account because I prefer the format and they provide better research and after-hours trading, which Zecco does not offer. In terms of customer service, I have always had positive experiences.
Why don’t you let everyone know that you just raised your fees to trade stocks under a $1 by 55% from $4.50 a trade to $6.95 a trade, plus you eliminated all free trades that you used to provide. Many folks don’t know that yet because you hide it in your fine print while advertising $4.95 a trade. Who raises fees by 55%? Zecco does!!!!!
Woohoo! I just checked since I thought that sharebuilder still charged 15.95 to sell. Yep, you were right with $9.95.
I’d love to see the same thing written up for us Canadians. It’s something that interests me but I don’t know where to begin, and get overly confused as soon as I visit one of those trading sites.
I’ve use tradeking for about two years. It’s a nice site. I especially like the chat feature since they give lots of free insight and information for newbies. I’ve recently tried trading options and they have been pretty helpful. I ask a lot of dumb questions, but have always received patient advice and information. The other site I like to use is a site called buy and hold. It costs $14.95 per month for unlimited window trades – no special extras like options – and if you only trade twice a month, you can get the special for $6.99. Also available are real time trades for $15 each. I started with them about 8 years ago and have not been disappoined. Everything is done online, so if you are afraid of the net, this is not the place for you. I forget what the minimum investment amount is but it is not more lthan $2500. Check them out.
Man, you work through your “to-do” list quickly! Thanks for the informative article.