Best Online Brokers for Stock Trading 2016

March 16, 2016 Brokers, Investing

The online brokerage account you use to trade stocks and exchange-traded funds can have a big impact on your investment expenses and trading capabilities. Whether your goal is to lower costs such as trade commissions or gain access to better research or a larger selection of asset classes, NerdWallet researched the options to find the best available. Here are our picks, divided by category to help you quickly find the right online broker for you.

The best overall online brokers

These brokers have no inactivity fees or account minimum. They offer advanced trading platforms, a breadth of research and access to a wide range of investments.

td-ameritrade 5.0-stars
  • Provides top-tier research and two powerful trading platforms available to all customers. See our TD Ameritrade review.
  • Commission: $9.99 per trade
  • Account minimum: $0
  • LIMITED TIME OFFER: 90 days free trading and up to $600 in cash with qualifying deposits ($100 cash for $25k deposits, $200 cash for $50k deposits)
optionshouselogo 5.0-stars
  • Provides low commissions and superior trading tools, particularly for options traders. See our OptionsHouse review.
  • Commission: $4.95 per trade
  • Account minimum: $0
  • Promotion: $1,000 in free commissions with deposit of $5,000 or more

Both OptionsHouse and TD Ameritrade offer strong customer support, advanced trading platforms with no balance or trade minimums, and an impressive amount of research. TD Ameritrade’s trade commissions are on the high side, but many traders find their first-class trading platforms, Trade Architect and thinkorswim, worth that higher cost. The broker also offers a large selection of no-transaction-fee mutual funds and commission-free ETFs. Although OptionsHouse fails to offer either, it has very competitive commissions for stock, ETF and options trades.

The best low-cost online brokers

In addition to top pick OptionsHouse — a strong deep-discount broker — these brokers are formidable choices for fee-conscious investors. They both offer rock-bottom commissions, but investors won’t sacrifice much in the way of tools and investment selection.

tradekinglogo 4.0-stars
  • Offers an impressive trading platform and depth of research paired with low commissions. See our TradeKing review.
  • Commission: $4.95 per trade
  • Account minimum: $0
  • Promotion: $1,000 in free commissions with deposit of $5,000 or more
interactivebrokerslogo 4.0-stars
  • Frequent traders benefit from volume discounts and one of the best trading platforms available. See our Interactive Brokers review.
  • Commission: $0.005 per share; minimum $1 and maximum 0.5% of trade value
  • Account minimum: $10,000 ($5,000 for IRAs)
  • Promotion: Lower minimum activity and balance requirements for clients 25 or younger

Stripped-down apps like Robinhood offer commission-free trading. But for investors who want more, TradeKing and Interactive Brokers prove that it’s possible to pair low commissions with advanced features. Both companies score high for their trading platforms and investment selection. TradeKing falls a bit short by not offering futures trading, but the broker has a $0 minimum deposit requirement and lower inactivity fees when compared with Interactive Brokers. Frequent traders will pay less in commissions at Interactive Brokers. It offers volume discounts but requires traders to meet monthly activity minimums and maintain a $10,000 balance.

The best online brokers for beginners

These brokers have around-the-clock customer service, a large number of commission-free ETFs and low or no account minimums.

td-ameritrade 5.0-stars
  • Offers a breadth of educational content and no inactivity fees. See our TD Ameritrade review.
  • Commission: $9.99 per trade
  • Account minimum: $0
  • LIMITED TIME OFFER: 90 days free trading and up to $600 in cash with qualifying deposits ($100 cash for $25k deposits, $200 cash for $50k deposits)
Chales Schwab 5.0-stars
  • Gives investors access to one of the largest selections of commission-free ETFs. See our Charles Schwab review.
  • Commission: $8.95 per trade
  • Account minimum: $1,000
  • Promotion: 500 commission-free trades with deposit of $100,000 or more

 

If you’re new to the markets and looking to dabble in a little trading, you may value handholding over fancy tools, research or even low fees. You want to be able to pick up the phone — or visit a branch — and talk to someone who can walk you through your choices. With both TD Ameritrade and Charles Schwab, you can do that (though making a trade through a broker, rather than online, will generally cost extra). They also both offer a wide selection of commission-free ETFs and no-transaction fee mutual funds, as well as educational content to help you gain your footing. Charles Schwab often waives its $1,000 account minimum for investors who agree to auto-deposits of at least $100 a month.

The best online brokers for investment selection

Clients of these brokers can trade a number of asset types, including futures and foreign exchange.

Etrade 4.5-stars
  • Offers a large investment selection with reasonable commissions and fees. See our E-Trade review.
  • Commission: $9.99 per trade, volume discounts available
  • Account minimum: $500
  • Promotion: 60 days of commission-free trades with deposit of $10,000 or more
OptionsXpress-Logo 4.5-stars
  • Offers a large investment selection with significant discounts for high-volume traders. See our OptionsXpress review.
  • Commission: $8.95 per trade
  • Account minimum: $0
  • Promotion: 50 commission-free trades with deposit of $5,000 or more

 

E-Trade and OptionsXpress both offer stocks, bonds, ETFs, mutual funds, futures, and options trading, alongside powerful trading platforms that advanced traders will appreciate. Be sure to compare trading costs for the investments you plan to trade most frequently: For example, futures trading at E-Trade is slightly cheaper at $2.99 per contract (compared with $3.50 at OptionsXpress), but high-volume options traders will save money at OptionsXpress. E-Trade also offers a large selection of no-transaction-fee mutual funds, while OptionsXpress has none — but that broker scores higher marks for its extensive selection of commission-free ETFs.

The best online brokers for research

These brokers offer a depth of high-quality research alongside reasonable commissions.


Basic CMYK 4.5-stars
  • Provides a breadth of research from well-respected providers alongside its own offering. See our Merrill Edge review.
  • Commission: $6.95 per trade
  • Account minimum: $0
  • Promotion: Cash bonuses ranging from $100 for deposits of $20,000 to $49,999, to $600 for deposits of $200,000 or more
Fidelity Investments 4.5-stars
  • Leads the pack in terms of research offerings, with reports from more than 20 firms. See our Fidelity review.
  • Commission: $7.95 per trade
  • Account minimum: $2,500 ($0 for IRAs)
  • Promotion: 300 commission-free trades with deposit of $50,000 or more

Research is key to stock trading, and Merrill Edge and Fidelity both stand out here. Fidelity is unmatched among online brokers for offering research from more than 20 providers. Merrill Edge features Morningstar, S&P Capital IQ and Recognia, plus mutual fund reviews from Morningstar and Lipper. Better still, research is free at both brokers, which also charge mid-range commissions.


Summary: Best online brokerages

Summary: Best online brokerages

Online brokerBest
for
HighlightsCommiss-
ions
PromotionAccount minimumStart investing

Optionshouse

OptionsHouse
Overall
Low commissions; superior tools, particularly for options
$4.95
per trade
$1,000 in free trade commissions ($5,000+ deposit)
$0

TD Ameritrade

Overall
+
Beginners
Top research; two powerful trade platforms; educational content
$9.99
per trade
$100 bonus ($25,000+ deposit)
up to $600 ($250,000+ deposit)
$0

TradeKing

TradeKing
Low cost
Impressive platform and research depth; low commissions
$4.95
per trade
$1,000 in free trade commissions ($5,000+ deposit)
$0

Interactive Brokers

Low cost
Discounts for frequent traders; among best platforms
$0.005
per share;
min. $1, max. 0.5% of trade value
Lower min. activity and balance limits for clients ≤25
$10,000
($5,000 for IRAs)

Charles Schwab

Charles Schwab
Beginners
Among largest selections of commission-free ETFs
$8.95
per trade
500 commission-free trades ($100,000+ deposit)
$1,000

E*Trade

E*Trade
Investment selection
Large selection; reasonable commissions and fees
$9.99
per trade; volume discounts
60 days of commission-free trades ($10,000+ deposit)
$500

OptionsXpress

OptionsXpress
Investment selection
Large selection; discounts for high-volume traders
$8.95
per trade
50 commission-free trades ($5,000+ deposit)
$0

Merrill Edge

Merrill Edge
Research
Breadth of research from other providers and own offering
$6.95
per trade
$100-600 cash bonus, depending on account size
$0

Fidelity

Fidelity Investments
Research
Leads on research - reports from 20+ firms
$7.95
per trade
300 commission-free trades ($50,000+ deposit)
$2,500
($0 for IRAs)

Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.

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