The Best Online Stock Brokers for 2021
Online stock brokerages have quickly taken the world of investing by storm. While this market was once only available to those wealthy enough to hire a personal broker, the internet and advanced technologies have opened the gate for anyone wily enough to become an investor.
The best online stock brokers can now bring the finance world to your fingertips, and the healthy competition among companies is both driving prices down and improving the overall quality of services. But there are also some negative effects; the gap between good and exceptional products has perhaps never been wider.
That’s why we’re here to help you find the right service for your needs.
7 Best Online Brokerage Accounts
How Do We Determine the Best Online Brokerage Account?
The team at Fortunly believes in transparency and openness, which is why we want to share our review methodology with you. It’s important to us that the standards and key features we value when reviewing online brokerages are here for all to see.
It doesn’t matter whether you are at the beginning of your investing journey or you already know how to buy stocks using an online platform, choosing the right service provider is vital. That’s why we made sure to include not only the industry’s largest players but also emerging brokerage companies.
To narrow down the list of the best providers, we used the following criteria:
Commissions & Fees
This is the most important feature we examine. After all, the commission model is crucial to traders - it’s how they make money. These costs used to be much higher, but in today’s market, strong competition and falling prices have made it the perfect time to find a trustworthy broker. Stock brokerage firms are now offering premium packages with discounted commission costs, either by directly cutting them by a percentage or by doing so after a certain number of trades. These cuts might not seem much at first, but they can save an active trader thousands of dollars a year.
While pricing and fees play a big part in how we rate online brokerage providers, the quality of the broker’s technology and research tools is the true foundation of our reviews. We believe that the true value of a brokerage lies in the quality of the product itself.
The best online broker account should not only be stable and have features like real-time streaming of prices and updates of buying power, but also possess quality research capabilities. As such, our reviews place great significance on technical strength, innovation, and versatility as we look for brokers that really stand above the rest.
The quality of customer service and support is essential to how we rate all the best online stock trading companies you’ll find on our list. We look for a user-friendly interface on both the desktop and mobile version of the product, a smooth and stable experience, and support staff who are helpful and attentive when you need them. This is equally important to skilled customers as it is for beginner traders.
Companies that answer quickly, have multiple contact options, and have knowledgeable staff get higher ratings, while those that offer a subpar service get a lower overall rating.This is equally important to skilled customers as it is for beginner traders.
The Best Brokerage Accounts - 2021 Summary
- TD Ameritrade - Powerful mobile and desktop platforms
- Fidelity Investments - Lowest prices on the market
- Merrill Edge - Robust trading and research tools
- Charles Schwab - Thousands of no-fee mutual funds
- E*Trade - Low per-trade commissions for active traders
- Interactive Brokers - Lowest commission rates
- TradeStation - Best option for military personnel and first responders
Reviews of the Best Brokerage Accounts
TD Ameritrade Review
Originally founded as First Securities Omaha way back in 1975, TD Ameritrade is one of the largest and best-known full-service brokerages in the US. The company offers a wide array of services for beginners and advanced investors alike, and is constantly among the highest-rated brokerages. Of course, the competition is now stronger than ever. That prompts a question we’ll be answering today: Is TD Ameritrade still the best online broker out there?
Commissions & Fees
For many years now, TD Ameritrade has been considered one of the priciest full-service brokers, with many singling out its trading fees as the one flaw in an otherwise amazing offer. But not anymore. In October 2019, TD Ameritrade made a drastic shift that once again proved it intends to stay at the top for a long time.
The company reduced its commissions and trading fees for online stock, ETF, and option trades to $0 in one fell swoop, while also cutting its per-contract fee for options down to $0.65. Broker-assisted fees for trades on stocks and ETF were reduced to $25, while for option trades the fee is now $25.00 + $0.65 per contract. This massive change was something TD Ameritrade considered necessary to keep up with the other best online brokers, and has only strengthened its position as the industry leader in the new era.
While TD Ameritrade was previously criticized for its costs, no one ever doubted the quality of the technology and research tools it offered. In fact, this online brokerage has long been considered an industry leader, which it continues to be in the third decade of the 21st century.
There are two platform options on offer. The first is the “on-ramp” service called TDAmeritrade.com, which is aimed at the average investor. This is probably the best trading platform for beginners, providing access to research tools and advisors from third-party software like Morningstar, Market Edge, and CRFA. There is also a great in-house portfolio planner tool. With it, you can build a customized model or pick one of the free pre-built ones, then use it to either analyze an existing portfolio or create a new one.
The second trading platform option - Thinkorswim - targets advanced investors who are interested in a deeper and more technical experience. Up until 2017, this was a standalone platform, but TD Ameritrade acquired it in yet another smart business move, as you’d expect from the best online stock brokerage in the US. This platform has almost every feature you could ever need and provides perhaps the most-detailed charting tools on the market, with over 300 technical indicators for fine-tuning your trading strategies.
TD Ameritrade also offers two separate mobile apps - one for each platform. The entry-level mobile app provides pretty much the same experience you’d get on the company’s website, while Mobile Trader is the equivalent of the Thinkorswim platform. It provides a great variety of features, like syncing watchlists and analyzing and placing complex option orders.
TD Ameritrade has one of the best online trading sites; it’s both easy to navigate and full to the brim with useful information. With videos, quizzes, articles, live seminars, and presentations, there’s an array of quality content to go through. TD Ameritrade also has a chatbot called Ted who can provide you with directions to all the tools and tutorials you could hope to check out. But that’s not all.
The company is also among the rare few that offers a virtual trading simulator. It’s called PaperMoney, and you can use it to test your strategies with $100,000 in practice money. Not only is this service free, but even non-customers can test it out with a 60-day trial before setting up an account. Groundbreaking software like this is as useful to beginners as it is for advanced investors.
TD Ameritrade is probably also the best online brokerage firm when it comes to the number of different customer support options. It offers customer support on social media platforms like Facebook Messenger, Twitter, WeChat, and Amazon Alexa, along with its virtual chatbot, Ted. When using the Mobile Trader app, customers can even chat live with support staff. If you need to see your broker in person, TD Ameritrade has 360 physical locations around the US. All in all, this is an incredible level of dedication and an impressive feat that makes the firm stand out from other top online brokerages.
Whether you’re a beginner looking to understand the industry or an experienced investor who wishes to test out advanced strategies before putting them to use, TD Ameritrade has something for everyone. With a treasure trove of information, recent shift to $0-fee policy, and some of the best investment apps for both desktop and mobile devices, this is without a doubt the most feature-filled and customer-oriented online brokerage on the market.
Reasons to Open an Account
- Powerful mobile and desktop platforms
- Amazing customer service
- Virtual trading simulator
Fidelity Investments is not only among the oldest US brokerages, but it was also one of the first to move online way back in 1984. The company now has over 20 million online brokerage accounts and $2 trillion in client assets, making it a true industry leader. But how has Fidelity adapted to the new wave of slashing commissions and fees, and has this veteran stood the test of time well enough to remain among the best of the best?
Commissions & Fees
Even before the recent escalation in price wars among brokers, Fidelity was already proving itself to be a user-friendly platform for online stock trading. This was the first company to eliminate almost all of its account fees, while also cutting account closure and transfer costs. And in October 2019, along with other big brokers, it reduced all stock, ETF, and options fees to $0.
All this ensured that Fidelity now has arguably the best and most-affordable service overall, which makes creating a portfolio virtually free. You can even take advantage of the platform by paying bills from your Fidelity brokerage account, because the company will not charge you any ATM or stop-payment fees. As with most of the competition, however, Fidelity charges a $0.65 fee per contract on options.
With such a long history in the business and incredible financial strength, it’s not surprising that Fidelity offers the most-comprehensive and advanced online brokerage account options. The basic web-based service has real-time streaming quotes and incredible charting tools, but where the broker truly shines is in its selection of research tools.
There are 19 third-party stock research providers featured, among which are Recognia, Thomson Reuters, and Ned Davis. You also get access to six ETF research providers along with options analysis software LiveVol. It’s the best-equipped brokerage service out there before we even get to the flagship Active Trader Pro platform.
This is the biggest and most-comprehensive tool for buying stocks online, providing you a highly customizable service with intuitive shortcuts, a pre-built market, advanced tools, and a multi-trade ticket. All investors can try out the Active Trader Pro platform for free for an entire year, and they also get the opportunity to test out the desktop version of this premiere online brokerage.
There is even a premium product called Wealth-Lab Pro, which is a desktop-based backtesting program for customizing strategies, with access to 20 years of daily historical data. Wealth-Lab Pro has a great drag-and-drop strategy-builder tool, which is useful for anyone who is willing to code their own strategy, but there are automatic presets for those that prefer them. We must note that this product is available only to customers who trade more than 36 times in a rolling 12-month period and have a minimum of $25,000 in assets in Fidelity brokerage accounts.
Last but not least, you can access Fidelity online stock trading services through the company’s mobile app, which is in itself a robust and customizable piece of software. While it is more aimed at investors rather than active traders, it is still among the very best mobile brokerage apps, and will be more than enough for the majority of users.
Fidelity has a stellar reputation for its easy-to-use platforms and a dedication toward first-class customer support, and the praise is nothing short of deserved. While the website design is not that flashy and feels a bit dated, it is still laid out in such a way that you can find everything you need with a click or two.
There are massive amounts of information you can find on the website itself, but for any additional questions or issues, the company offers 24/7 live support. Fidelity also stands out from other online brokerage firms by helping customers on platforms such as Facebook Messenger, Google Assistant, and Amazon Alexa, as it pushes towards robust voice-activated assistance.
The online chat services are open Monday through Friday from 8 am Eastern to 10 pm Eastern, and response times are stellar. For those who prefer meeting in person, Fidelity also has 196 branches around the US; you can visit for some face-to-face guidance and free investor seminars.
Fidelity has long been the standard against which the industry has been measured, and it will continue to rank among the best online stock broker firms, at least for the foreseeable future. This veteran company has adapted and grown with the times as well as any competitor, innovating in voice-activated support across a multitude of platforms and providing some of the most feature-heavy investing platforms. Just as it led the industry in price wars of 2019, Fidelity continues to prove its dedication to remaining the most customer-friendly brokerage in the world. If you’d like to learn how to buy stocks online, opening an account with this provider is a smart choice.
Reasons to Open an Account
- Lowest prices on the market
- Extensive customer service
- Powerful trading and research tools
Merrill Edge Review
Merrill Edge has been operating since 2010 when its parent company - the Bank of America - merged its online investing arm with Merrill Lynch’s research, investment tools, and call center operations. The brokerage platform was created as a direct competitor to the Charles Schwab Corporation and Fidelity Investments, and at the time of its inception already had 500,000 Bank of America customers. With massive backing like that and a supremely developed support network, it was often touted as one of the best online brokerage firms in the US. But how does it fare as we approach the start of a new decade?
Commissions & Fees
Merrill Edge long held the reputation of a brokerage platform for beginners since it lacked some features experienced investors prefer, especially commission-free ETFs. But the price wars that started at the beginning of October 2019 haven’t passed by Merrill Edge. The company now offers unlimited commission-free trades for equities and ETFs, penny stocks, and per-leg options to customers who qualify for the Preferred Rewards program. Merrill has also lowered its per-contract options commissions to $0.65, in line with other big names in the industry.
To be eligible for the Preferred Rewards program, you must have a Bank of America checking account and a three-month average combined balance of at least $20,000 in Bank of America deposit accounts and/or Merrill investment accounts. There are no fees to join or participate in the program, but you do have to sign in to your online banking site or mobile app to join. Clients who do not wish to enroll or are not eligible to enter the program are now in a much better position themselves, as the base commissions have been cut to $0 for online trading and $29.95 for broker-assisted trades.
Merrill Edge provides a great variety of research tools. These include proprietary tools like Stock Story, Fund Story, and Portfolio Story, as well as third-party integrations with well-known research tools like Recognia, MSCI ESG, and Trefis. What sets Merrill apart from other online brokerage firms, however, is the fact that the company also uses both Lipper and Morningstar research providers, which only strengthens its already-powerful mutual funds research.
Like most top brokerages, Merrill also features a premium active trader platform called MarketPro. To qualify for this, you have to maintain a balance of at least $50,000 on either Bank of America, Merrill Lynch, or Merrill Edge accounts, or trade at least 15 times a quarter.
Well-known for offering some of the best investing apps. Desktop platforms, the MerillEdge.com and the Merrill Edge MarketPro, are robust and full of interactive charts and visualizations. They both feature a customizable drag-and-drop dashboard, while also providing access to 36 different technical analysis studies. You can also create watchlists and track your portfolio in real time, stream news, and enjoy a more realistic stock trader experience than you’d get from using the basic web platform. This is, however, a significant drawback for mobile users, as MarketPro does not integrate with Merrill’s mobile app.
Whatever your platform of choice, you’ll have a stable and consistent experience when using Merrill Edge’s services. The MarketPro is obviously the best online brokerage service the company provides, but even the basic web and mobile trading platforms are functional and easy to use.
Merrill also helps you learn about investing and retirement through its Guidance and Retirement Center, where you can find all sorts of planning tools and calculators. It also includes educational articles, investing classroom courses, quizzes, videos, and much more. The only thing lacking here are community forums and webinars, which many other stock broker companies offer.
The Merrill Lynch customer support service, on the other hand, is a classic example of how to do things the right way. Customers can reach live support staff 24/7 via phone, live chat, or email, and response times are quick, especially when chatting. You will most likely wait for less than a minute before the company’s professional and knowledgeable staff will reply to help you get the answer you need. Because Merrill Edge is a part of such a huge company, you also have the option of getting in-person assistance at more than 2,000 Bank of America locations.
All in all, Merrill Edge remains one of the very best stock trading platform options in the rapidly changing this decade’s online brokerage landscape. This is an easy choice for both beginners and experienced investors, especially those who are already clients of the Bank of America. With powerful research tools and a world-class proprietary trading platform that is supported by an equally impressive live chat service, Merrill stands out from the competition. That’s why we’ve placed it among the best online brokerage providers.
Reasons to Open an Account
- Incredible customer support
- Robust trading and research tools
- Modern proprietary trading platform
Charles Schwab Review
Charles Schwab is not only one of the oldest, but also one of the most-respected and best-known online investment companies in the world. It was founded all the way back in 1973 and provides both banking and brokerage services for beginners and advanced investors alike. With more than $3.5 trillion in total client assets and a great track record, it is a force to be reckoned with. But with widespread change now sweeping across the industry, even the strongest have to adapt. This is why our review asks one simple but very important question: Is Charles Schwab still as great as it ever was?
Commissions & Fees
Charles Schwab was among the first brokerage firms to drop commission fees during the price wars in 2019 as the company strives to stay competitive with modern startups like Robinhood. Schwab dropped stock and ETF transaction fees, as well as per-leg and penny stock transaction fees. On par with other brokerages, it also cut its option trades to $0.65 per contract.
What makes Schwab stand out from the rest of the competition, however, is the fact that the company has over 7,400 mutual funds without a sales load and 4,300 funds with no load or transaction fee. This way, you can buy and sell without paying any initial sales charges. It’s an investor-friendly way for Schwab to differentiate itself from other top brokerages.
Like the rest of the top brokerage firms on our list, Charles Schwab provides its services on both desktop and mobile devices, either through its basic web trader or the flagship trading platform called StreetSmart Edge. Whatever your device or platform of choice is, you’ll always be provided with some of the highest-quality in-house research on stocks. For ETFs and mutual funds, Schwab uses industry-leading third-party research provider Morningstar. This ensures that the overall feeling of doing research on Schwab’s platforms remains terrific throughout.
The standard entry-level web trading platform on Schwab is also among the most feature-heavy stock trading apps out there. It allows you to perform tasks like analyzing trends or pulling up trading data and financials from the companies you are interested in. Still, it pales in comparison to StreetSmart Edge, which is Schwab’s flagship platform for a good reason. Here, the interface is incredibly well-crafted and allows for a much more complete experience with live-streaming news from CNBC, Associated Press, and other world-renowned publications, while advanced real-time charts let you make trades directly.
Schwab is also available on mobile devices. In fact, it provides some of the best trading app services we’ve found. Since all your customizations and watchlists are stored on the cloud, switching between mobile, web, and desktop platforms is seamless, and the set-up process is the same on all platforms. The company has also branched out into more modern trends; its platforms integrate with Amazon Alexa, so if you have a virtual assistant you can request updates, quotes, and even organize watchlists by voice command.
Charles Schwab is a full-service broker with five decades of experience, and it shows in the overall quality of service on offer. Not only are the platforms modern and competitive, but Schwab provides you with some nifty features like being able to seamlessly move money between your investment company account and bank accounts. You can also use thousands of ATMs worldwide without worrying about fees.
Another big plus with Schwab is that it provides real-time access to assistants, either AI or live people, and you can get professional investment management on accounts holding as little as $5,000. Consultants are always available to help out with issues, answer your questions, or even spot new opportunities in the stock market.
It doesn’t matter if you are looking for the best way to buy stocks or ETFs or have stumbled upon a technical issue, Schwab’s customer support team will be there to help you 24/7 via phone, email, or live online chat. If you need personal assistance, you can pay a visit to one of Schwab’s brick-and-mortar offices. Note that there are more than 300 branch locations across the United States for you to choose from.
As a veteran of the brokerage industry, Charles Schwab is an example of how to build and maintain a successful online investing platform. The company doesn’t simply follow the trends, but indeed seeks to be a trend-setter through its numerous advances in AI advisors and integration with modern virtual assistants like Alexa. But most importantly, it provides an incredibly robust and feature-rich experience that has never been cheaper or easier to use.
Reasons to Open an Account
- Cutting-edge stock trading platforms
- First-grade customer support
- Thousands of no-fee mutual funds
E*Trade is one of the most-popular full-service brokers in the US. In fact, this company executed the first electronic trade by an individual investor, all the way back in 1983. Ever since then, E*Trade has been a staple of the brokerage industry, remaining at the top of the game throughout decades of technological progress and disruption. But these days, when the pace of change is proving too much for plenty of stable stock trading companies, is E*Trade still at the top of its game?
Commissions & Fees
If we judge E*Trade on how it has handled the start of the price wars, then yes, this company is definitely going as strong as ever. The veteran brokerage eliminated trading commissions on ETFs, options, and equities on October 7, 2019. At the same time, it lowered the rate for per-contract options trading to the new industry standard of $0.65 per contract.
E*Trade is also doing something that other top brokerages on our list are not, by offering trading on futures and by having 4,400 mutual funds without load or transaction fees. It also rewards active customers who either trade more than 30 times per quarter or have more than $250,000 in their account by lowering the commissions for per-contract trades to $0.50, making it the best online brokerage for options. It must be noted, however, that trading during pre and post market hours will result in an ECN fee of $0.005 per share that is added to the commission rate.
The research tools on E*Trade are comprehensive and supported by eight different third-party software providers, including TipRanks and Trefis. There is also Recognia, which itself is integrated into the charts and offers further education on technical analysis. The number of tools and their purpose varies, because E*Trade stock brokerage is also the only on our list that has three different trading platforms (even though one of them is slowly being phased out).
E*Trade Web is the free trading platform option here. But even as a basic choice it offers plenty of features, including free streaming of market data, live market commentary, and the ability to construct watch lists, make trades, and create advanced options strategies.
Power E*Trade, however, is the heart and soul of the company, and is going to be in focus even more as we move forward. This platform is an amazing choice for active options traders. It was made possible with E*Trade’s acquisition of OptionsHouse a few years ago. Like E*Trade Web, this platform is also web-based, but it offers a much greater selection of analysis tools, 118 technical studies, trading ladders, and 33 drawing tools. The standout for us here is the TradeLab analysis tool, which provides investors with incredible deep and complex analytics.
The last of the three online trading platforms, which won’t be available for much longer, is called E*Trade Pro. This desktop-based active trader is now hidden from new customers. Those who still want to try it need to write to the customer support staff and meet requirements like having a minimum balance of $250,000 or making at least 30 stock or option trades in a three-month period.
The only thing that negatively affects our impression of E*Trade as an online stock broker is that its website is badly out of date. In terms of transparency and ease of navigation, it’s not up to scratch. Crucial information regarding account creation and requirements should be much more easily accessible to potential customers.
The E*Trade mobile app, on the other hand, is perhaps the best of any brokerage - we recommend it as the best way to use the company’s services. On both Android and iOS, E*Trade’s mobile service is well-designed. It’s even available for the Apple Watch.
The E*Trade platform also offers banking services. While it can’t really compete with other top brokerage giants like Merrill Edge, it still has 30 branches across the US, making it one of the rare online brokerages that is insured by the Federal Deposit Insurance Corporation (FDIC).
When it comes to customer support, E*Trade can be reached via phone, email, or live chat. Responses usually take less than a minute when you use the latter option. If you are a customer with a large account you can qualify for priority service, additional management, and research help, which makes E*Trade a great choice for more-affluent investors.
E*Trade has managed to stay competitive among the top online brokerages by adapting and improving almost every aspect of its business. This is a great choice for active investors, who can enjoy the lowest commissions for per-contract trades and the best brokers app available. Add to this top-quality research and analysis tools and E*Trade is definitely among the best five online brokerages right now.
Reasons to Open an Account
- Low per-trade commissions for active traders
- Amazing analysis tools
- Best mobile brokerage apps
Interactive Brokers Review
With over four decades of experience, Interactive Brokers is one of the best online discount brokerage firms in the US. The company has 24 offices in 12 countries and is regulated by largest regulatory bodies, including the SEC and the FCA. Our review will determine whether or not Interactive Brokers has succeeded in providing top-notch service amid the technological disruption that’s shaking up the online brokerage industry.
Commissions & Fees
For a long time, Interactive Brokers was known to provide the best brokerage account options for active traders. It kept that up by being among the very first brokerages to introduce $0-fee ETF and option trades on October 1, 2019. There are now two different pricing plans to choose from, making the firm a much more-viable choice for professionals and casual investors alike.
The newly introduced IBRK Lite pricing plan aims to bring in beginners and casual traders, as it features none of the inactivity, maintenance, or data fees that are present in the company’s Pro pricing plans. The fees on option trades are the same as those on the professional plans, but the one clear disadvantage to using IBKR Lite is that it doesn’t provide access to the Trader Workstation platform. This means online investment and trading on the IBKR Lite plan has to be done either via web or mobile platforms.
The IBKR Pro pricing plan, on the other hand, directly targets the company’s main clientele: active traders and professionals who are seeking the lowest fees possible. And Interactive Brokers more than delivers in this regard, even though this plan is not suitable for penny stock trading and other large-order trades where the fixed $0.005 per share fee can make it a pricey choice.
Still, the margin rates with IBKR Pro are the lowest in the industry, going all the way down to 2.68% for clients with a balance of more than $1 million in their online trading accounts. These incentives for active and more financially secure investors are also evident in the fact that you’ll need to maintain a balance of at least a $100,000 or spend at least $30 in Interactive Brokers commissions over a 30-day period in order to avoid paying an inactivity fee, which can be as much as $20 per month.
IBKR Lite users are limited to using the Client Portal trading platform. However, there are still plenty of features that will make casual traders happy here, including portfolio analysis, high-quality analytical tools, and customizable watchlists. Still, more-advanced traders will find the basic platform lacking, especially since Trader Workstation is considered one of the best online trading platforms.
This is exactly why IBKR Pro is so well-liked, even though it can be pricey. Trader Workstation is filled to the brim with top-quality tools like the Probability Lab, which can suggest trading strategies and predict your market outlook based on your current situation. This platform has more than 450 data points for column customization, with an equally impressive amount of available research from over 100 providers, compared to 33 that are available in the Lite plan.
On top of all that, investing online with Interactive Brokers allows you access to more than 4,200 mutual funds without incurring transaction fees, as well as 98 commission-free ETFs. For more-passive investors, there is even a recently introduced robo-advisor that requires a $5,000 minimum investment but charges only 0.08% in management fees.
The only area where Interactive Brokers falls behind is its website. This platform is difficult to navigate compared to some of the other best online brokerage platforms. This is especially true in regards to commissions and fees, which are laid out in such a manner that makes it difficult to find the exact costs.
Things are much better when it comes to the mobile experience, as the IBKR app works exceptionally well for Lite and Pro users alike. The app seamlessly integrates all the features and tools of Trader Workstation, as well as any presets that you might have on the desktop platform. This is truly one of the best online trading pieces of software out there that is sure to satisfy even the most demanding of users.
The same thing can be said of the company’s customer support service, which is available 24/7 via phone and during work hours via live chat. It’s also possible to contact the brokerage via email, but we do recommend going for the live chat as it’s the fastest way to get an answer and resolve your issue.
Unlike some of the huge names on our list of best brokerage accounts, Interactive Brokers is focused on online business and does not have a large number of branch offices, so it’s not an ideal choice for users who are seeking a more personal assistance and guidance. Still, the quality and consistency of the available options here is more than enough to be considered among the best the industry has to offer.
With the addition of the IBKR Lite payment package, Interactive Brokers has become a place where both casual and professional traders can find something great, even though the main trading platform favors the latter. All in all, this is without a doubt one of the premiere online brokerages, trading in over 120 different international markets and offering industry-low commission rates that cannot be found anywhere else.
Reasons to Open an Account
- Best trading platform
- Lowest commission rates
- 24/7 phone customer support
TradeStation was established in 1982 in Florida and is one of the very few top brokerage firms for serving institutional trader markets. Since 2011, the company has been owned by the Japanese Monex Group and is listed on the Tokyo stock exchange. Recently, the TradeStation platform has become much more accessible to the average trader. While it is still best-suited for active professionals, the quality of the service makes it an appealing prospect for anyone.
Commissions and Costs
TradeStation has a number of commission structures, with the most-recent addition being TSgo, a free trading plan that was unveiled at the start of October 2019 as a response to the ongoing price wars. This plan opens up the leading investment broker firm to casual investors, with unlimited $0 stock and ETF trades, while option trades are at an industry-low of $0.50 per contract. This plan does limit you, though, as you can’t use the TradeStation desktop trading platform, which is the best and most feature-heavy product.
The other, more-widely used pricing plan is the base-pricing or flat-fee plan, which allows you to use the desktop platform, as well as web and mobile versions of the brokerage house software. With this plan, equity trades are $5 and option trades are $5 + $0.50 per contract.
Delving deeper, there are also different structures for equities and options that work on per-share, unbundled, or flat-fee payment plans, but none of these offer commission-free ETFs like TSgo does. There is, however, the TradeStation Salutes program for active military personnel, veterans, and first responders. This plan provides completely free ETFs, stocks, and option trades to eligible customers. If you belong to any of those groups, TradeStation is a particularly good choice for you.
TradeStation has two main trading platforms: the simple Web Trading platform and the flagship TradeStation desktop platform, which has long been known for its impressive features. The Web Trading platform itself is quite competent and even surprasses some flagship platforms with its powerful tools, especially when it comes to chart trading.
The desktop TradeStation platform is still, however, the much more-complete and robust piece of software. It was also recently redesigned and is easier to use than ever, with more customization and a vastly improved interface. The tools themselves are both numerous and professional, especially since it has more pieces of historical data and studies than many other online brokerage services. And while charting tools on the platform are obviously the most impressive aspect, there are plenty of other powerful, top-quality tools like OptionStation Pro, Radar Screen, Matrix, and Walk-Forward Optimizer.
When it comes to ETF funds, there are about 4,900 options. However, unlike other competitors, TradeStation does not provide in-depth research on them, nor are there any commission-free ETFs on offer.
While the TradeStation website is not that impressive from a design viewpoint, especially compared to some of the top broker firms, it is still pretty straightforward, with all the necessary information laid out in an accessible way. There are a ton of webinars, video guides, and live-streaming education events featured on the platform. Even more excitingly, there are plans for a TradeStation University, which would essentially be an electronic campus that offers a variety of courses. There are also community forums and an impressive wiki that can serve as a great source of information and knowledge.
Not only does this provider help you learn how to buy stocks online but also it makes sure to answer any specific questions that you may have. TradeStation customer service can be reached via phone, live chat or email, and the response times on each method are excellent. You will most likely have to wait less than a minute before you get a response, and the support officers are both kind and knowledgeable.
It must be noted that live chat support is only available during work hours, so we prefer the phone support option, as it is much more reliable. TradeStation also falls behind the other best brokerage accounts in that it doesn’t have branch offices across the US, so you can’t get any in-person guidance or assistance.
TradeStation remains one of the finest brokerages in the US, especially for active and experienced traders, as well as military personnel and first responders, who can take advantage of the Salutes program. While it can be pricey in comparison to some of the other best brokers we’ve listed, it still deserves its spot on our list.
The quality of the desktop trading platform and the huge variety of tools backed by decades of market data make it as alluring as ever for those seeking a truly professional platform. And with the recent addition of the TSgo free trading plan, the brokerage is more open to casual investors than ever.
Reasons to Open an Account
- Top-quality desktop trading platform
- Best option for military personnel and first responders
- Wealth of knowledge and resources
Fortunly’s Guide to Online Brokerage
Before you decide to dive into the exciting world of online investing sites, we advise you to familiarize yourself with the concept and rules of internet brokerage. Our detailed guide was created to provide you everything you need to know, whether you’re a beginner or an experienced user seeking some valuable nuggets of knowledge. So let’s begin.
Opening a Brokerage Account
The process of starting up your own online brokerage account is really quite simple. The whole thing takes about 10-15 minutes and will require you to provide detailed personal information. In addition to your basic personal data, your brokerage firm will most likely ask you for your bank account, Social Security number, and a driver’s license or state ID card.
These things are needed for funding your brokerage account, making sure that your year-end tax forms are correct, and in case the brokerage cannot confirm your identity through a database check.
Brokerage Account Options
Brokerage firms come in one of three different forms. You will usually be asked to pick the type you want to open as you are signing up.
Cash account - The most common and most conservative of the three, a cash broker account has investors pay the full amount for any purchased investment, while not permitting any borrowing of money from the broker or financial institution. Cash accounts are sometimes set by the broker as the automatic choice for the customer, who can then upgrade the account to another type if requested.
Cash accounts have their advantages, as investors who use them are never subject to a margin call within their account and avoid the risk of losing assets due to rehypothecation exposure. This option is most common for a reason, as it is the surest way to protect you from potential financial disaster, which is why we recommend it for anyone just starting their journey into the investment world.
Margin account - For more-experienced customers or those who want to take bigger risks, margin stock accounts are the ideal choice. Why? Because they can bring you serious profit. These high-risk accounts allow you to use borrowed money to invest, usually up to 50% of the value of the investment, but also leave you open to serious financial loss. That is why we do not recommend this option to beginners, as there are plenty of cases when inexperienced investors have paid a hefty price for not understanding a volatile market.
Discretionary account - Sometimes referred to as a managed account, this option allows authorized stock brokers to buy and sell securities without the client’s consent for each trade. These accounts are most commonly used by people who hire a registered investment advisor to manage their portfolio for them, and have become popular in recent times due to AI advisors.
There are certain advantages to having a discretionary account that allows you to quickly execute trades, but they can be risky due to the possibility of negative performance. Discretionary accounts are also more expensive and have higher fees than other options.
Types of Internet Brokers
Online stock brokers themselves are split into three different groups, so it’s best to familiarize yourself with what category a company belongs to before you choose to open a brokerage account there.
A good choice for those who are just starting their investment journey, full-service brokers are licensed financial broker-dealer firms that provide a large variety of services and tools to their clients.
Because full-service brokers provide guidance, expertise, and advice on things like investing and retirement planning, they are also the most-expensive option on the market. Generally, the top companies charge 1-2% on the assets managed, while also charging for things like annual maintenance fees, which can add up to a lot in the long run.
For those with more experience and less need for investment advice, discount brokers represent a much cheaper, less service-oriented option. Some of these brokerages provide better investing tools and charge higher fees, but in general you won’t have access to investment advice, research, or retirement, estate, or tax planning. However, each buy or sell order will cost you a fraction of what you would have to pay to a full-service broker, making it possible for almost anyone to gain access to the stock market.
This was previously impossible for anyone who wasn’t wealthy enough to afford a broker, but the internet has allowed even individuals with smaller capital to trade. Discount brokerages have since become synonymous with online brokerages, as most of them operate through online platforms.
The newest advances in technology have made stock trading for beginners and experienced users alike much easier, as robo-advisors can prove to be a great choice for almost anyone. Robo-advisors can automatically select investments and build diversified portfolios, and some even make trades automatically to help reduce your tax bill through a process called tax-loss harvesting. What’s more, they minimize any possible mistakes that are common when using other types of online brokerage services.
The fees for using a robo-advisor are also quite reasonable and can be structured as a fixed monthly fee or as a percentage of assets. A typical fixed monthly fee ranges from $15 to $200 per month depending on portfolio size, while annual fees for a percentage of assets structure are typically between 0.15% and 0.50% of your account size. You also pay expenses associated with the investments used by the robo-advisors, like mutual funds and exchange-traded funds.
Frequently Asked Questions
Are online brokers safe?
While there is still a prevalent belief that online stock broking is somehow less safe than offline stock trade, this couldn’t be further from the truth. The leading brokers have a lot to lose if even a single hole appears in their security, which is why industry leaders now use high-end 128-bit encryption to protect user data and privacy. This is the highest level of security currently allowed by the US law, and it makes the theft of information virtually impossible.
What’s more, the best online brokerage companies employ a range of different methods to increase the security further, like using secured servers and sorting data behind secure and monitored firewalls, in fully secured facilities. There is also a two-step authentication option that is usually found among the industry leaders. This strengthens your protection, as does the automatic logout feature, which logs you out after 10 minutes of inactivity. To feel even more safe, make sure you always use the services of a firm that is insured by the Securities Investor Protection Corporation (SIPC), which provides up to $500,000 of coverage.
What are the risks of online stock trading?
Even though online brokerage is generally safe, there are still certain risks and issues that everyone should be aware of. The most common of all is probably identity theft, as there is always the potential for someone to compromise your information and your assets, whether he or she is a friend or a stranger. This is also an important issue because of the increasing numbers of data breaches, as financial institutions are the primary target of large attacks.
On a personal level, it’s key to understand that your device or the computer you’re using your online broker service from needs to be as clean and as safe as possible. Viruses and malware can install spyware on them and allow thieves to gain access to your personal information by tracking your keystrokes.
The other way these thieves target consumers is through phishing scams. You can receive a convincing-looking email from what appears to be your broker, but is in fact just a copy that redirects you to a website designed to steal your login data. To be safe, make sure to read your emails very carefully and look for suspicious signs that may indicate it is in fact a fake.
What is the best online brokerage?
The competition among online brokers has never been this fierce, which means that the market selection itself is more packed than ever. And different online brokerage companies provide different types of services, which means that picking the one best-suited to you is a highly subjective experience. Some providers like TD Ameritrade may be better for beginners, while others like Interactive Brokers may be better-suited to those focusing on international trading. Our advice is to stay informed about the market and go with the online brokerage that will be of best service to you, whatever your goals are.
Is investing in the stock market worth it?
There are certainly many pitfalls in online trading, but that’s not to say that it’s not worth it. On the contrary, investing is the perfect way to diversify your income, and an educated investor can ensure that their financial situation remains healthy for a long time.
How do beginners invest in stocks with little money?
The stock market of the 21st century has never been as affordable as it is now. And with the price wars raging on between the best online brokerage providers, the reality is that even these incredibly low prices will soon make way for even more consumer-oriented discounts and benefits. That’s why it is now incredibly easy to invest in stocks, even as a beginner with a low budget and not much in your savings account.
If you’re just a beginner, we recommend that you either invest in stocks or exchange-traded funds. Unlike mutual funds, where you usually need at least $1,000 before you can open an account, ETF and stock trading only requires a few dollars to get started.