10 Best Online Brokers for ETF Investing of December 2023
ETFs can help you create a well-diversified portfolio. The 10 brokers below all offer a large selection of ETFs with no trade commission.
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Exchange-traded funds have surged in popularity because they offer investors a simple way to build a diversified portfolio on the cheap. Investors don’t have to search far and wide to invest in these assets: They’re a common offering of online brokers.
ETFs trade like individual stocks, so many of the features sought by investors in a stock-trading account are also relevant to ETF investors. Like stocks, many brokers now offer ETFs commission-free. Besides commissions, it’s also important to consider other criteria, including a broker’s fund selection and tools for creating a well-diversified portfolio.
Here are NerdWallet’s picks for best online brokers for every kind of ETF investor, whether you’re looking for a broker with free commissions, the broadest range of ETFs or the best platform to help you build and manage a portfolio.
Exchange-traded funds have surged in popularity because they offer investors a simple way to build a diversified portfolio on the cheap. Investors don’t have to search far and wide to invest in these assets: They’re a common offering of online brokers.
ETFs trade like individual stocks, so many of the features sought by investors in a stock-trading account are also relevant to ETF investors. Like stocks, many brokers now offer ETFs commission-free. Besides commissions, it’s also important to consider other criteria, including a broker’s fund selection and tools for creating a well-diversified portfolio.
Here are NerdWallet’s picks for best online brokers for every kind of ETF investor, whether you’re looking for a broker with free commissions, the broadest range of ETFs or the best platform to help you build and manage a portfolio.
Investing can help outpace inflation — which is especially important when inflation is high.
Best Online Brokers for ETF Investing
| Broker | NerdWallet rating | Fees | Account minimum | Promotion | Learn more |
|---|---|---|---|---|---|
 Interactive Brokers IBKR Lite Learn more on Interactive Brokers' website | $0 per trade | $0 | None no promotion available at this time | Learn more on Interactive Brokers' website | |
 Fidelity Learn more on Fidelity's website | $0 per trade for online U.S. stocks and ETFs | $0 | None no promotion available at this time | Learn more on Fidelity's website | |
 E*TRADE Learn more on E*TRADE's website | $0 per trade. Other fees apply. | $0 | Get up to $600 or more when you open and fund an E*TRADE account | Learn more on E*TRADE's website | |
 Charles Schwab Learn more on Charles Schwab's website | $0 per trade | $0 | None no promotion available at this time | Learn more on Charles Schwab's website | |
 Vanguard Learn more on Vanguard's website | $0 per trade | $0 | None no promotion available at this time | Learn more on Vanguard's website |
$0
per trade
$0
None
no promotion available at this time
Pros
Large investment selection.
Strong research and tools.
Over 19,000 no-transaction-fee mutual funds.
High order execution quality.
Cons
High minimum to earn interest on uninvested cash.
Why We Like It
Interactive Brokers' IBKR Lite is a strong option for frequent traders: The broker offers international trade capabilities, no stock-trading commission and a quality trading platform.
$0
per trade for online U.S. stocks and ETFs
$0
None
no promotion available at this time
Pros
Commission-free stock, ETF and options trades.
Large selection of research providers.
Strong customer service.
Expense-ratio-free index funds.
Highly rated mobile app.
High interest rate on uninvested cash.
Cons
Relatively high broker-assisted trade fee.
Why We Like It
Fidelity offers $0 trading commissions, a selection of more than 3,300 no-transaction-fee mutual funds and top-notch research tools and trading platform. Its zero-fee index funds and strong customer service reputation are just icing on the cake.
$0
per trade
$0
None
no promotion available at this time
Pros
Four trading platforms with no minimum or fees.
Above-average mobile app.
Extensive research.
Large fund selection.
Commission-free stock, options and ETF trades.
Cons
Low interest rate on uninvested cash.
Why We Like It
Charles Schwab has earned its strong reputation: The broker offers high-quality customer service, four free trading platforms, a wide selection of no-transaction-fee mutual funds and $0 commissions for stocks, ETFs and options.
$0
per trade
$0
None
no promotion available at this time
Pros
Large mutual fund selection.
Commission-free stock, options and ETF trades.
Leader in low-cost funds.
High interest rate on uninvested cash.
High order execution quality.
Cons
Basic trading platform only.
Limited research and data.
Why We Like It
Vanguard is the king of low-cost investing, making it ideal for buy-and-hold and retirement investors. But active traders will find the broker falls short despite its $0 trade commission, due to the lack of a strong trading platform.
$0
per trade
$0
Get up to $700
when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money.
Pros
Easy-to-use platform.
$0 commissions.
App connects all Chase accounts.
No account minimum.
Cons
Limited tools and research.
Portfolio Builder tool requires $2,500 balance.
Low interest rate on uninvested cash.
Why We Like It
J.P. Morgan Self-Directed Investing is a clear-cut investment platform that is great for beginners looking to learn how to buy and sell investments. More advanced investors, however, may find it lacking in terms of available assets, tools and research. INVESTMENT PRODUCTS: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
$0
per trade
$0
None
no promotion available at this time
Pros
Commission-free stock and ETF trades.
Expansive selection of low-minimum and no-transaction-fee mutual funds.
Integration with Axos Bank.
Cons
Thin investment selection.
Some features require a premium subscription.
Underwhelming educational tools.
Low interest rate on uninvested cash.
Why We Like It
Axos Self-Directed — with its affordable trading fees and easy integration with Axos Bank — make the provider a logical pick for existing Axos customers or investors who are looking for a one-stop shop when it comes to banking and investing. However, the brokerage’s trading platform is relatively basic, and you’ll need to pay a monthly subscription to access features that often come free with other providers. Advanced, active traders may be better off relying on mainstays.
Want to compare more options? Here are our other top picks:
Last updated on December 1, 2023
Methodology
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating providers and our processes, read our full broker ratings methodology.
To recap our selections...
NerdWallet's Best Online Brokers for ETF Investing of December 2023
Frequently asked questions
ETFs allow investors to invest in a diversified selection of stocks, bonds or other investments in a single transaction. Like mutual funds, ETFs pool investor money to purchase shares of a number of different investments.
Those investments generally mimic a benchmark, like the S&P 500. ETF investors don’t own the underlying assets in the fund — the ETF provider maintains ownership. Instead, ETF shareholders own a portion of the ETF itself.
ETFs are traded on an exchange, much like an individual stock, which means they can be bought and sold throughout the day. You can read more about ETFs in this explainer: What is an ETF?
All investments carry risk, and ETFs are no exception. But, since ETFs have built-in diversification, similar to mutual funds, risk is generally lower than it is in trading any one company stock or bond. Still, most ETFs mirror an underlying asset or index, which can rise and fall in value depending on market conditions.
Other risks include the liquidity of the fund (that is, how easily you can buy or sell the ETF) and the potential for the fund to close down.
Like any investment, that varies. As with mutual funds, ETF costs come from a couple of different directions.
Because ETFs trade on an exchange, they can be subject to broker stock commissions. But many brokers allow you to buy or sell ETFs with no commission.
As with any fund, ETFs charge an expense ratio to pass the cost of administering the fund on to investors. The expense ratio is an annual fee, expressed as a percentage of your investment: a 1% expense ratio costs $10 a year for every $1,000 you invest in the fund. In general, because ETFs passively track a benchmark, their expenses tend to be lower than what you’d pay for an actively managed mutual fund. Take a look at average fund expense ratios so you know where your ETF stands.
ETFs combine the flexibility of stock trading with the instant diversification of mutual funds. As most ETFs are passively managed — tracking a benchmark index rather than trying to beat market returns — management fees are on average about one-third lower than that of actively traded mutual funds. Costs are transparent, and the value of the fund’s holdings are reported at the end of each day (as opposed to monthly or quarterly for mutual funds).
ETFs often are more tax-efficient than mutual funds because they typically draw lower capital gains taxes. Investors might pay only upon the sale of the ETF, whereas mutual fund investors can incur capital gains taxes throughout the life of the investment.
Most ETFs are passively managed, meaning they try to track an underlying asset, like a basket of stocks like the S&P 500 or a commodity like gold, which may be turnoff for investors who prefer active management. Also, while costs are generally lower for ETFs, they can vary from fund-to-fund (even ETFs tracking the same index).
Like stocks, ETFs are traded on exchanges like the New York Stock Exchange (hence the name, exchange-traded funds). But unlike a stock, which buys assets in one publicly traded company, an ETF tracks an index, a basket of securities, bonds or other assets.
The main difference is in how these funds invest, and how they’re bought and sold. As we noted above, ETFs can be traded throughout the day, leading to the kind of price fluctuations you might see with individual stocks. Mutual funds are typically purchased from fund companies rather than other investors, and are priced once a day after the market has closed.
Though ETFs can be actively managed, most are passive, tracking an index. Many mutual funds are actively managed and employ a professional to pick and choose investments, which can result in higher fees.
Here’s our full comparison of ETFs and mutual funds.
Because they are traded for a share price, you don’t run into the typical mutual fund minimums, which can be $1,000 or more. You can purchase an ETF share for as little as $10 or $20 in some cases. Robo-advisors that use ETFs in their portfolios may even allow you to buy fractional shares — portions of a fund smaller than a single share.
That said, some brokers have account minimums, though there are quite a few options above that do not.
To trade ETFs, you’ll need an account with an online broker. If you don’t have one, you can open one with one of the companies listed above in about 15 minutes — the whole process can typically be done online. Here's the step-by-step of how to open a brokerage account.
Once the account is funded, you can purchase ETFs using their ticker symbol, very similar to the way you’d buy stocks. (Here’s how to narrow your options when investing in ETFs.) You’ll place an order on your broker’s website or online trading platform with the ETF’s ticker, the order type and the number of shares you’d like to purchase. Read our step-by-step guide to buying an ETF.
Yes — if the portfolio owned by the ETF includes equities such dividend-paying stocks. These can be paid monthly or on some other time frame, depending on the ETF. If you're interested in this type of income, view our list of the best dividend ETFs.
Yes, you can use dividends to acquire more shares in the same ETF, but there may be commissions for reinvesting dividends. Check with your brokerage to learn more.
