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Currently Managing Director of Motley Fool Money, Brendan has worked full-time for The Motley Fool since 2011. He has written hundreds of articles for The Motley Fool and provided analysis on TV outlets including CNBC and Fox. He holds a degree in finance from Virginia Tech.
Nathan Alderman has been a full-time Motley Fool employee since 2005, making errors his arch-enemies in a variety of roles including a six-year stint as the dedicated fact-checker for The Motley Fool's premium newsletter services. As Motley Fool Money's Compliance Lead, he makes sure that all the site's information is accurate and up to date, which ensures we always steer readers right and keeps various financial partners happy. A graduate of Northwestern University's Medill School of Journalism, Nathan spends his spare time volunteering for civic causes, writing and podcasting for fun, adoring his wife, and wrangling his two very large young children.
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Opening an online brokerage account is easy: With most online stock brokers, you can sign up and start investing in minutes. But don't just sign up with any stock broker. The best stock brokers can save you hundreds of dollars by offering low or $0 fees. Often, these brokers offer additional services like financial advice, research tools, or high APY accounts for uninvested cash.
After hundreds of hours of reviewing over 47 stock brokers (we look at commissions, fees, account types, customer service, and more) our experts came up with the below list. These are the best stock brokers we've seen. These are the brokerages we brag about to our friends at summer weddings and picnics, the trading platforms we can't get enough of. Get more info on our favorites below.
Our team of experts assessed 45+ trading platforms
We evaluate all brokerage accounts across the same 4 key criteria: user experience, cost efficiency, product variety, and support and security
Our brokerage ratings are never influenced by our advertising partners
We strictly feature products that offer federal insurance and high customer satisfaction, keeping our recommendations unbiased
2 Featured Picks From Our Best Stock Brokers
We've highlighted a short list of online brokers below, in case you're short on time:
SoFi Active Investing: Exceptional brokerage for keeping all your financial accounts in one place
E*TRADE: Great brokerage for both active traders and long-term investors
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Best For:
Low fees on stocks, ETFs, crypto, and options
Commission:
$0 for stocks, ETFs, and options; up to $5 monthly for Robinhood Gold
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Best For:
Beginners learning how to invest
Commission:
$0 commission for online U.S. stock and ETF trades. No fees to buy fractional shares.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Best For:
Low cost ETFs and index investing
Commission:
$0 stock, ETF, and Schwab Mutual Fund OneSource® trades. No fees to buy fractional shares.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Best For:
Low cost ETF and mutual funds
Commission:
$0 online; $25 broker-assisted fee for some phone trades of stocks and ETFs from other companies (Less than $1 million)
Editor's Note: TD Ameritrade is transitioning to Charles Schwab
TD Ameritrade has been acquired by Charles Schwab, and the company expects all accounts to be transitioned by the end of 2024. We've removed TD Ameritrade from our best-of lists to align with this development. Here at Motley Fool Money, you can trust that we're constantly evaluating our top broker picks to bring you current recommendations.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
This brokerage is a clear standout for its well-rated mobile app and 1% IRA match.⁸ It also has unique investment offerings like IPOs, options,⁴ and fractional shares.³
Special Offer
For new accounts: Customer must fund their Active Invest account with at least $25 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%.
Get up to $1,000 in stock when you fund a new Active Invest account.⁷
Why isSoFi Active Investingone of our best online stock brokers? SoFi lets you manage all your money in one place. You can trade stocks, invest for retirement, and open bank accounts without paying fees. You even get discounts for using more than one SoFi product. For example, opening a SoFi Active Investing account may get you lower APRs on personal loans.
It's easy to get started. SoFi gives you fractional investing, the power to buy fractions of shares.³ For example, you can buy some Apple stock for as little as $1. This way, you can decide how much money to invest without worrying about the share price.
Other nifty perks like mutual funds trading and IPO access make SoFi worth a look. Check it out if you want to do all your money management in one place, at great prices.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
Public is an investing platform that simplifies trading stocks, bonds, ETFs, options, and crypto. With zero fees on many trades, Public stands out as a low-cost brokerage, while also providing yield-focused products to help you earn returns on your cash.
Why isPublicone of our best online stock brokers? Public is the red pill to brokers like Robinhood, which make money off of payment for order flow (PFOF). Instead of using PFOF, Public charges customers up front, doing away with any uncertainty about price execution.
Public offers a ton of investment types relative to similar apps. Common investments like stocks and ETFs are available to you, but so are bonds, options, OTC stocks, and cryptocurrencies. It's all transparently and affordably priced.
Plus, you can start small. Public offers fractional shares of stocks and bonds, so you can get started at any price point -- perfect for beginners new to investing. Public is worth a look.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
E*TRADE offers low fees and tons of account types. If you need it, chances are, E*TRADE has it. You can access advanced features through its popular Power E*TRADE platform. Open an E*TRADE account to trade fee-free mutual funds and do all your investing in one place.
Special Offer
Open a new eligible E*TRADE brokerage account, fund your account within 60 days of opening, and earn a cash bonus of up to $1,000, depending on the size of your deposit. Offer good for one use per customer, on a single account.
"E*TRADE is a powerful platform that's easy to use, especially for someone new to investing like myself. I've run into errors when connecting my external accounts with other brokers, but E*TRADE made it simple to open and fund a new account. The homepage gives me a comprehensive overview of my accounts while providing a real-time look at the market (although the index looks to be only slightly behind)."
-Kathryn Mallari, SEO Content Strategist here at Motley Fool Money
Pros
$0 online stock, mutual fund, and ETF commissions
Deep trading platform
No minimum deposit
Branch network
Cons
Uncompetitive margin rates
No international exchanges
Why is E*TRADE one of our best trading platforms brokers? E*TRADE offers a buffet of investing options. You get stocks, ETFS, options, and thousands of no-load mutual funds. Many investments, like stocks, are commission free.
If you're an investor who loves data, you'll love the analysis you can do on the platform. We're talking customizable charts with up to 16 columns, 65 different metrics to choose from, and the ability to sort and prioritize metrics that are most important to you.
Check out E*TRADE for its deep desktop and mobile platforms. We think it's one of the best online brokers for analytical, research-driven investors.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
Robinhood is a simple, low-cost brokerage with a few rare perks. It matches retirement deposits like an employer, the interface is gorgeous, and it's extremely affordable. No matter what or how you trade, Robinhood fees tend to match or beat the competition. It's worth a look.
Fees:
$0 for stocks, ETFs, and options; up to $5 monthly for Robinhood Gold
"I've been using Robinhood since it launched. At the time, it was one of the only platforms to offer zero-fee trades. The platform was developed to be mobile-first, so the app is clean and easy to use. It also recently launched an IRA product, which is built in to the existing app. The account was easy to open, and since I was already familiar with the platform, it's intuitive to fund the IRA and buy stocks."
-Louis Feldsott, Data Analyst here at The Motley Fool
Pros
$0 commissions on stocks, ETFs, crypto, and options
Easy to use trading app
Fractional shares
IRA match
Cons
No mutual funds
No bonds or CDs
Why isRobinhoodone of our best online brokers? Robinhood lets you do all the basics at very competitive prices. You can even trade options without paying per-contract fees, a rare perk.
Even rarer is Robinhood's IRA match. Like some employers, Robinhood will match your retirement account deposits. All members get 1% match, and Robinhood Gold subscribers get triple that. It's a unique perk that no other broker offers to this extent, and it's perfect for the self-employed.
Fractional share trading makes it easy to get started. Check out Robinhood to start trading the basics for as little as $1.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
Webull is a standout mobile investing app. You can access advanced trading tools on desktop and mobile. Basic trades are commission-free, so it's competitive with similar apps. The mobile app offers Lite mode, a simpler interface for beginner investors. Consider opening a Webull account for its advanced toolset, more powerful than its closest competitors'.
"I've had my Webull trading account for three years and primarily did my trading using my mobile device. I love that the app allows you to check your individual account's risk level based on your investments. Trading isn't too complicated on it, but beyond the risk assessment component, it was pretty similar to other platforms I've used. It could be worthwhile for people seeking to buy OTC and fractional shares."
-Sharice Wells, Editor here at The Motley Fool
Pros
$0 stock and ETF commissions
No minimums
Advanced mobile platform
Competitive margin rates
Cons
No mutual funds
Limited account types
Why isWebullone of our best trading platforms? Webull combines nifty charts and a customizable interface with $0 commissions. Even better, it does it on a mobile app. That's uncommon. For getting fancy on your phone, Webull is tough to beat.
A standout feature is Webull's lack of options contract fees. Most online brokers charge per-contract fees for options. Webull is a rare exception.
Like many of the best trading platforms, Webull lets you trade fractional shares. Check out Webull to buy stocks and ETFs for as little as $5.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
A great low-cost option for small trade volume. While the interface isn't as clean or modern as that of other brokers, it gets the job done. Interactive Brokers is also a great choice for options investors, traders, and those trading on margin.
"I've used Interactive Brokers for five years, as my advisor uses it to manage my SMA (Separately Managed Account -- the advisor manages the trades in this account on my behalf), and overall I think it has improved a lot in that time. I still find their two-factor authentication the most clunky of all the brokerages I use, but I think their PortfolioAnalyst feature is very good and is not something you can get elsewhere. Overall, I think it has excellent advanced features, but seems to be lacking easy access to the basics of checking on your individual positions. I'd recommend it more to advanced brokerage users."
-Tim White, Tech Leader here at Motley Fool Money
Pros
Commission-free trading
Advanced trading platform
Low margin rates
No-transaction-fee mutual funds
Cons
Complicated pricing structure
Some research tools are paid
Why isInteractive Brokersone of our best online brokers? Interactive Brokers gives you access to stocks, ETFs, options, futures, forex, cryptocurrencies, and mutual funds in over 150 markets. That's the widest range of tradable securities on this list by far, and the most comprehensive access to global markets among our best brokers.
Interactive Brokers charges $0 commissions on stock and ETF trades, the industry standard, but where it really shines is its margin rates, which are lower than most competitors we've reviewed. This makes the trading platform an excellent choice for margin traders.
The desktop platform offers advanced charting and technical analysis tools. For those who actively trade, it's hard to beat. Check it out to choose between Lite and Pro plans, for beginners and active traders respectively.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
J.P. Morgan Investing is one of those rare brokers that charges zero transaction fees to buy and sell mutual funds. It's easy to use, even though it combines self-directed investing and an optional robo-advisory platform in one app. It's no-frills compared to other brokers, and it's most convenient for Chase customers. Pick this platform for low mutual fund fees and a no-nonsense interface.
Earn a bonus up to $700 when you open and fund a J.P. Morgan Self-Directed Investing account (retirement or general) with qualifying new money by 01/23/2025.
On
J.P. Morgan Self-Directed Investing's
Secure Website.
Pros
No minimum for self-directed investing
$0 commissions for stocks and ETFs
No-transaction-fee mutual funds
Cons
Limited account types
Basic trading platform
Robo-advisor is uncompetitive
Why isJ.P. Morgan Self-Directed Investingone of our best trading platforms? What really sets J.P. Morgan apart is its no-transaction-fee mutual fund offerings. We believe it's one of the best stock brokers because it's one of the only brokers that offers $0 commissions on all mutual funds, not just a subset of no-transaction-fee funds.
The online broker is extra convenient for Chase users. The J.P. Morgan Self-Directed Investing platform integrates into all Chase accounts, so existing Chase customers are able to sign up for an investment account right from the app.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
Fidelity is massively popular because it works for beginners and advanced investors. You get $0 commission trades, tons of investment types, and good customer services you can meet in-person. Fidelity's research is top-notch without being overwhelming. Open an account with Fidelity to invest on an affordable platform that grows with you.
Fees:
$0 commission for online U.S. stock and ETF trades. No fees to buy fractional shares.
"I've been using Fidelity for over a decade, and my experience has been excellent. I've found it to be an easy-to-use platform, has great customer service, and the fees are low or nonexistent. An underrated feature is the ability to change your core cash position to high-yielding options including a money market fund or a treasury fund. The yields on these funds are very attractive and it means you can feel comfortable keeping cash here that you're waiting to invest -- these funds currently earn a rate similar or higher than many high-yield savings account options. Note, you need to change your core cash position to one of these funds -- it is not automatic. These funds are not FDIC insured but I think they're pretty darn safe -- but if you want extra peace of mind, park your cash instead in an FDIC-insured high-yield savings account."
-Brendan Byrnes, Managing Director of Motley Fool Money
Pros
Commission-free stock and ETF trades
Fractional share investing
Wide selection of mutual funds
Gold standard
Cons
Uncompetitive options per-contract fees
Why isFidelityone of our best stock trading platforms? Fidelity has been around for decades and its reputation precedes it. Known for being the gold standard in the brokerage industry, Fidelity has millions of customers and a reliability that's undeniable.
It lets you trade many assets: stocks, ETFs, mutual funds, options, and cryptocurrency. Fidelity meets the industry standard of $0 stock and ETF commissions, but really shines with over 3,300 no-transaction-fee mutual funds, which is only the standard for a handful of brokers on this list.
Fidelity also offers more independent research than pretty much any other discount broker. Plus, it has a good amount of educational resources and offers fractional share trading. All these are important for beginner investors, who get all the good stuff in one place.
Between fees, features, and reputation, Fidelity checks all the boxes. Check out Fidelity especially if you're a beginning investor and need to learn and grow in experience on one platform.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
Charles Schwab pioneered the low-cost brokerage model decades ago, and that legacy continues with its lineup of no-commission-fee offerings. The robust lineup of account types, investment vehicles, and high quality app round out the stacked feature set.
Fees:
$0 stock, ETF, and Schwab Mutual Fund OneSource® trades. No fees to buy fractional shares.
"I opened my Charles Schwab account as a brand-new investor who knew almost nothing about investing, and I've learned a lot through the educational resources available. While the website isn't the most modern, it's easy to use. I've spent a good amount of time using their customer service support as well as a Schwab Financial Consultant and both have been tremendously helpful. I like both the active trading experience but have also enjoyed using the robo-investing option, Schwab Intelligent Portfolios."
-Brooklyn Welch, SEO Content Strategist here at Motley Fool Money
Pros
$0 commission trading
Many mutual funds
Investing and banking all in one
Nationwide branch network
Cons
Uncompetitive margin rates
No cryptocurrency
Why is Charles Schwab one of our best trading platforms? Schwab offers one of the largest marketplaces for low-cost ETF and index investing, including its own line of branded ETFs that rival the lowest cost options we've come across. These rival the likes of Vanguard and Fidelity.
Schwab offers a lot more than a trading platform. You can open other accounts types, such as the Charles Schwab High Yield Investor Checking account, CDs, and credit cards. For help opening or managing your Schwab accounts, you can visit one of over 300 branches.
Check out Schwab to invest in low-cost funds and use banking products under one umbrella.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
Vanguard is one of the best brokerages for passive investors who want to buy low-cost index fund ETFs. It also offers thousands of no-transaction-fee mutual funds, and excellent zero-commission options for buying stocks online, with no account minimums for brokerage accounts. Vanguard tries to keep its costs and expense ratios low so investors (like you) can keep more of your returns.
Fees:
$0 online; $25 broker-assisted fee for some phone trades of stocks and ETFs from other companies (Less than $1 million)
Why isVanguardone of our best online brokers? Vanguard is a retirement-focused broker that's highly regarded among investors with a long-term investment philosophy.
In fact, the whole platform is optimized for buy-and-hold investors. Unlike many other brokerages on this list, Vanguard doesn't offer real-time streaming news or advanced charting tools that active investors prioritize. For investors who align with Vanguard's strategy, it's a simple and easy-to-use platform.
Where Vanguard really shines is in its mutual funds. Its own suite of Vanguard mutual funds offer some of the lowest expense ratios on the market, plus it offers thousands of no-transaction-fee funds from other firms.
The trading platform is one of the best places to invest passively. Check out Vanguard to invest at affordable prices over the long term.
Small deposits: To invest only a few hundred dollars at first, look for brokerage firms with no minimum deposit requirements.
Only the basics: To simply buy and hold stocks, you probably don't need a full-featured trading platform. Most discount brokers will meet your needs.
Mutual funds: To buy mutual funds, you should look for the best mutual fund brokers. These brokerage accounts make it cheap to buy and sell mutual funds.
Bonds and options: To trade bonds or options, or to make trades over the phone, look at what brokers charge for these activities. Compare the best investment brokers on our list to help you determine which platform has the features you're looking for.
One of the fastest ways to narrow down your options is to decide (1) what account type to open and (2) what investment types you'll need ahead of time. Many investors don't need bells and whistles, which can raise prices. But if you need it, you need it, and that's important.
How to open a stock brokerage account
Opening an online brokerage account is usually quick and straightforward.
Determine what type of brokerage account you need (individual, IRA, etc.).
Compare brokers to find the best fit for you.
Fill out the new account application. Be ready to provide identifying information, such as your Social Security number.
Add funds to your account. Most brokers offer several ways to do this.
Start investing!
How to get started investing in stocks
You can get started investing by opening a brokerage account, depositing money via the trading platform, and using your deposit to buy and sell stocks. Most online brokers let you open an account for free. Some require a deposit upon opening, and you can use this deposit to trade.
You can learn about stocks from brokers that offer educational articles and videos, or you can download financial literacy apps. The latter tend to offer bite-sized lessons on money. It's an easy way to learn without taking classes in-person. Plus, it's structured.
What investments can I buy on an online brokerage?
Online brokers typically let you buy stocks and ETFs. Beyond that, choices vary.
What you can buy:
Bonds: A bond is essentially a loan that an investor provides to a borrower, which can be a government, municipality, or corporation. They pay you fixed interest.
Mutual funds: A mutual fund is a type of investment that pools money from many investors to purchase a diverse portfolio of stocks, bonds, or other securities.
Stock options: Stock options are financial contracts that give the buyer the right, but not the obligation, to buy (call options) or sell (put options) a specific stock at a predetermined price (strike price) within a set time frame (expiration date).
Some brokers let you trade alternative investments, a catch-all category for niche categories. Investments under this umbrella might include music royalties and venture funds open to non-accredited investors.
How much money do I need to start trading stocks?
You can start trading with as little as $1. Most brokers on this list will let you open an account without depositing any money. To buy a stock, you'll need at least $1. Brokerages that offer fractional shares let you buy pieces of stocks for $1 or $5, minimum.
If your broker only offers full shares, you'll need enough deposited to buy your desired stock at full price. Stock prices range widely, from under $1 to over $1,000 per share.
Are online brokerages safe?
Yes, your online broker is safe from collapse. If your brokerage firm is a member of the Securities Investor Protection Corporation (SIPC), then cash and securities in your account are protected from loss due to broker failure, up to $500,000 ($250,000 for cash).
The SIPC doesn't cover risks like unauthorized trading activity, but most of the best brokerage accounts have fraud protection that covers you if your account is hacked. The trick is letting your brokerage know ASAP.
Your money is not insured against investments losing value. Losing money to stock values going down is a risk inherent to stock trading. Day trading is especially risky.
What is an online stock broker?
An online broker helps you buy and sell stocks. Typically, you do this through the broker's online trading platform.
You can think of an online stock broker as a direct line to stock exchanges. In exchange for a tiny commission on every trade, the broker sends your orders on to stock exchanges and market makers. These market makers do the heavy lifting of matching your buy orders with someone who wants to sell, or vice versa.
Your online broker tracks what stocks you own and at what prices you trade them. Mostly, this is done through discount brokers.
Discount brokers
Online brokerages are discount brokers. They aren't in the business of giving you advice or suggesting stock picks. Instead, discount brokers focus on the very basic service of helping you buy or sell a stock (or other type of investment) from the convenience of your own home.
Discount brokers, or online brokers, are popular because they're more affordable than full-service brokers.
Full-service brokers
Brokerage firms we label "full-service brokers" are more closely related to the stock brokers of the olden days. Full-service brokers employ human brokers who help you trade, choose mutual funds, or create a retirement plan.
Full-service brokers are costly, since people are more expensive than computers. A popular full-service broker charges at least $75 to place a stock trade, and that can jump to as high as $500 or more to buy a large amount of stock.
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Our brokerage rating methodology
At Motley Fool Money, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and user experience; however, we also take into account features like research, education, tax-loss harvesting, and customer service. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.
Most online brokers don't charge commissions for online stock trades. However, there may be commissions for other types of investments like mutual funds and options, and brokers have their own fee schedules for various other services. The best pick for you depends on what services and investments you anticipate using the most.
Thanks to zero-commission online stock trading and many brokerage firms offering fractional shares, it's easier than ever to diversify your investments. If your goal is to create a diverse portfolio of individual stocks without a large upfront capital commitment, be sure the broker you choose has both of these features.
Yes. If your account is with a brokerage firm that is a member of the Securities Investor Protection Corporation (SIPC), cash and securities in your account are protected from loss due to broker failure, up to $500,000 ($250,000 for cash). However, your money is not insured against losses that result from declines in value of the investments in your account.
This depends on your goals. If you simply want the best platform to buy and sell stocks, a standard (taxable) brokerage account could be the best choice for you. If you want to save for retirement and/or reduce your taxes, a retirement account like a traditional or Roth IRA might be better. There are other specialized brokerage account types as well, and you can usually find a list of the types offered on your broker's website.
There's no broker that is inherently safer than all the rest, but there are some important things to look for. First, make sure your broker is covered by SIPC protection, which insures the cash and securities in your account in the event of a broker's failure. Second, make sure your broker has a fraud protection guarantee, which will make you whole in the event that someone hacks into your account and makes unauthorized trades or withdrawals.
Expert Opinions
Irena Vodenska, Ph.D., CFA
Professor of Finance, Director, Finance Programs, Administrative Sciences Department, Metropolitan College, Affiliate Faculty Global Development Policy Center
What advice do you have for a first-time investor?
First-time investors could be very different, so a single piece of advice is probably not appropriate for all of them. If we assume that the first-time investor is a young professional, for example, in their first job right after school, they have a long investing horizon in front of them. Hence, they could be more aggressive in selecting a portfolio, mainly comprising domestic (U.S.), or even international equity. These young investors are in their savings part of the investment horizon and do not require short-term liquidity so that they can afford riskier investments, at least with a portion of their portfolio. Another consideration is the level of the risk-averseness for these first-time investors. Even if they have a long-term investing horizon and low liquidity requirements, first-time investors may opt for safer investments if they are very risk-averse. In that case, instead of equity (stocks), fixed income securities (bonds) will be more appropriate.
What is a common misconception about investing?
Investing is an individual choice. One of the common misconceptions about investing is that investments always have positive returns, i.e., if you invest, you will earn money at all times. This belief might be true on average, measured as a cumulative return over many years. However, the performance of an investment portfolio could be volatile, i.e., experiencing both negative and positive returns periodically. Another misconception about investing is that anyone who invests in financial markets will become rich quickly. While this might happen, it is not the norm but rather an exception. A third misconception could be that investing is trading, which is not the case. One can think of trading as short or very short-term investing; however, investing, per se, implies a long or a very long-term holding of the purchased securities, accompanied by a low-frequency rebalancing of the portfolio.
How can investors feel more confident when choosing a brokerage?
Excellent question. Investors should consider very carefully whom they will be choosing to trust with their investment decisions. There is a distinction between a brokerage and an investment advisory firm. Brokers engage in the business of effecting transactions in securities for the account of others, for which they receive compensation. When brokers recommend securities to their clients, they must ensure that the investment is "suitable" for the client. On the other hand, investment advisors advise others about investing in securities and receive compensation for the advice. When investment advisers recommend an investment to their clients, the investment needs to be in "the best interest" of the client. These differences are essential and create two different standards of conduct: 1) Suitability for brokers and, 2) Fiduciary ("best interest of the customer") for investment advisers. Investors should know the difference, and before entrusting their investments to securities professionals, they should ask whether they are a "fiduciary"? Investors can be confident if the answer is "Yes, I am a fiduciary."
Reena Aggarwal, Ph.D.
Director, Center for Financial Markets and Policy at Georgetown University
What advice do you have for a first-time investor?
One should start investing as early as possible, even if it is with a small amount of money. The magic of compounding is real and in the long run even this small amount can grow into a large amount. You should consider how much risk you are willing to take, and risk-taking also depends on the stage of your life cycle. Generally, young investors can afford to take more risk than retired people who are counting on their savings during retirement.
What is a common misconception about investing?
A common misconception is that I can beat the market and make a quick buck. It is rare for anyone to beat the market on a consistent basis. Markets don't always keep going up; you should consider the implications of both bull and bear markets on your portfolio. It is a good idea not to put all your eggs in one basket and instead have a diversified portfolio.
What are some investing trends that new investors should be aware of?
Retail investors have become more active participants in the financial markets, particularly during COVID. There has been a lot of interest around platforms for retail investors, allocation of IPOs, and popularity of products such as special purpose acquisition companies (SPACs) and crypto products. It is important to do your due diligence before investing in any asset. Regulatory agencies such as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) provide useful alerts and bulletins that are worth checking.
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