Best Online Brokers for Free Stock Trading 2017

Brokers, Investing

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 primer on stock trading.)

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. You won’t find much in the way of research, trading tools or education, and Robinhood supports only individual taxable accounts and not individual retirement accounts.

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 E-Trade and Charles Schwab fit that bill.

Charles Schwab leads here, with over 200 ETFs from 16 providers. E-Trade isn’t too far behind, with over 120 on its commission-free list. Both brokers also have reasonable account minimums, helpful ETF screeners and research, and no inactivity or annual fees.

A third option: Charles Schwab-owned optionsXpress, which gives its clients access to Schwab’s list of funds. OptionsXpress may be especially attractive to investors who trade ETFs and options; the broker excels at the latter, as you might guess.

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, TD Ameritrade and Fidelity put up the best showing, with about 4,000 and 3,500, respectively. That means you can buy funds on those lists with no charge, though as with ETFs, investors in these funds will pay expense ratios.

Best free-trading promotion with low deposit requirements

This broker offers free trades for new customers who deposit at least $5,000.

OptionsHouse offers one of the best free-trading promotions around: Just a $5,000 deposit earns you $1,000 worth of commission-free trades. Of course, there’s always fine print: The deal is valid only for new customers, and trades must be executed within 60 days of opening the account, so get rocking.

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


Best brokers for free trading: summary

Broker
Best
for
Highlights
Commiss-
ions
Promotion
Account minimum
Start investing
Robinhood
Robinhood
Overall
No-frills, free trading app for beginners
$0
per trade
None
$0
Charles Schwab
Charles Schwab
Free ETF trading
Among largest selections of commission-free ETFs
$4.95
per trade
$100 to $500 cash bonus for deposits of $10,000 or more
$1,000
E-Trade
E-Trade
Free ETF trading
Large selection of commission-free ETFs
$6.95
per trade
60 days of commission-free trades with deposit of $10,000 or more
$500
TD Ameritrade
No-fee mutual funds
About 4,000 no -transaction-fee mutual funds
$6.95
per trade
$100 to $600 cash bonus, depending on account size
$0
Fidelity
Fidelity Investments
No-fee mutual funds
Good fund screening tools
$4.95
per trade
300 commission-free trades with deposit of $50,000 or more
$2,500
($0 for IRAs)
OptionsHouse
OptionsHouse
Free promotions with low deposits
Low commissions; good tools, particularly for options
$4.95
per trade
$1,000 in free trade commissions with deposit of $5,000 or more
$0

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

Updated May 11, 2017