Best Online Brokers for Stock Trading 2016

Brokers, Investing

Picking an online broker for your stock trading account is a big decision. The one you choose will impact the investments available to you, the amount you’ll pay to trade them and the way those trades will be executed. Consider which factors matter most to you: Some investors value low commissions above all else, and others are willing to pay more for access to better research or a larger investment selection.

NerdWallet has picked the best online brokers in a variety of categories, so you can quickly determine which one is right for you.

The best overall: NerdWallet’s top 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.

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 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.

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 trading.

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.

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.

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.

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.

Not quite ready to open an account?

It’s OK to have cold feet. Check out some of our other brokerage account resources to get more information before making your decision.

  • Read our thorough guide to opening a brokerage account, including the information you’ll want to have available before you start the process.
  • As we said, knowing your trading and investing style is key to choosing a brokerage. Our post about how to choose the best broker for you will help you rank-order your priorities.

Finally, you might be wondering if you have enough money to start investing. The fact is, you can invest with as little as $500 — and in some cases, even less. Exchange-traded funds trade for a share price — like individual stocks — so you can build a diversified portfolio for very little money. Five of the brokers we picked above, including our overall top picks, have no account minimums.


Summary: Best online brokerages

Summary: Best online brokerages

Online Broker
Best for
Highlights
Commiss-
ions
Promotion
Account minimum
Start 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

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)

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)

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