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Best Online Brokers for Free Stock Trading 2019

Jan. 2, 2019
Brokers, Investing
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NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent.

We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers.

Investing is all about returns, and every dollar you pay in commissions reduces those earnings.

That’s not a concern at these brokers, which offer free trading of stocks, exchange-traded funds and mutual funds. Investors can bypass the typical transaction costs, which can range from $4 for stock trades at deep-discount brokers to $50 or more to buy into a mutual fund, and build or rebalance their portfolios free of charge.

Here are NerdWallet’s picks for the best brokers for commission-free trading. (Need to back up on this process? See our step-by-step instructions for how to buy stocks.)

Best Online Brokers for Free Stock Trading

  • Robinhood: Best overall and for free ETF trading
  • Motif Investing: Honorable mention for free trading (for next-day trades)
  • Charles Schwab: Best for free ETF trading and no-transaction-fee mutual funds
  • Vanguard: Best for free ETF trading
  • E-Trade: Best for no-transaction-fee mutual funds

Best overall for ongoing commission-free trades

Robinhood offers completely free stock and ETF trades. 

Robinhood is the shining star here. The app offers commission-free trading of more than 5,000 equities and ETFs, with respectable execution speed and free real-time data. The company also allows investors to trade on margin, for a flat fee based on debit balance instead of the typical interest rate charged by most brokers.

The trade-off is most of the bells and whistles of a typical brokerage account. Other brokers have better research, trading and educational tools, and Robinhood supports only individual taxable accounts and not individual retirement accounts. (Wondering what, exactly, you should look for in a brokerage account? Our explainer will help you sort through the most important factors for you.)

Another broker worth mentioning here: Motif Investing — part broker, part robo-advisor, with a focus on thematic investing and trading fractional shares — offers next-market-open $0 trade costs ($4.95 per trade for real-time trading). If you can afford to wait and are not worried about potential changes in pricing, this broker may be an attractive alternative.

Best online brokers for free ETF trading

These choices have a large selection of commission-free exchange-traded funds.

ETFs have become the darling of the investing world, with a long list of investor-friendly attributes. They tend to have low expense ratios — the operating expenses of the fund, passed on to investors as an annual cost. They’re inherently diversified, at least within an asset class. And they’re traded like a stock.

That last bit makes them liquid and tax efficient, but it can also cost you. Because they trade on an exchange like a stock, ETFs typically are subject to broker trade commissions. That means investors looking for ETFs should find a broker that offers a lengthy list of commission-free options. Both Vanguard and Robinhood fit that bill.

Robinhood leads here, with access to more than 2,000 ETFs. Vanguard isn’t too far behind, with 1880 funds on its commission free list.   

 

Best online brokers for no-transaction-fee mutual funds

These brokers offer thousands of mutual funds with no transaction costs.

Mutual funds are the old-school ETF — similar principle, at least from the diversification angle. Like ETFs, they hold many individual investments, so investors get some level of diversification in a single fund.

Unlike ETFs, they are priced, bought and sold at the end of each trading day, which means they aren’t traded with a commission but with a transaction fee charged by the broker. That fee can be pretty rich, sometimes topping $50.

But many brokers have a list of no-transaction-fee funds. Of those that do, E-Trade and Schwab put up the best showing, with about 4,440 and 4,350, respectively  — which is why these brokers top our list of best mutual fund providers. That means you can buy funds on those lists with no charge, though as with ETFs, investors in these funds will pay expense ratios.

Two other options: Interactive Brokers offer more than 4,150 no-transaction-fee mutual funds, while TD Ameritrade has about 4,120 no-fee funds.

Still learning the ropes of stock purchases? Also see NerdWallet’s guide to how to buy stocks.

 

Best brokers for free trading: summary

Broker
Best
for
Highlights
Commiss-
ions
Promotion
Account minimum
Start investing
E-Trade
E-Trade
No-fee mutual funds
About 4,440 no -transaction-fee mutual funds


$6.95
per trade
60 days of commission-free trades with deposit of $10,000 or more
$500
Robinhood
Robinhood
Overall
Free trading app for beginners
$0
per trade
None
$0

Motif Investing

Free trading (for next day trades)
Free next day trades; socially conscious investing
$4.95 per trader ($0
next day)
None
$0

Vanguard

Vanguard
Free ETF trading and no-fee mutual funds
Commission-free: 1,800+ ETFs and 3,080+ mutual funds
$2 to $20 per trade depending on account balance
None
$0
Charles Schwab
Charles Schwab
Free ETF trading and no-fee mutual funds
Among largest selections of commission-free ETFs
$4.95
per trade
$100 referral award for first-time clients
$0

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