Best Discount Brokers 2017

Brokers, Investing

A discount broker is an online broker with rock-bottom pricing. Here, we’ve sorted through our top online brokers to surface the ones with the best tools, platforms and investment selection for the lowest possible commissions and fees. These discount brokerages will help you keep transaction costs down without hindering your trade capabilities.

Best discount brokers overall

These brokers combine low prices with high-quality service. 

OptionsHouse is our top choice for stock trading, and with $4.95 trade commissions, it’s no surprise it shows up here as well. It’s a deep-discount broker that looks and feels like so much more, with a top-of-the-line trading platform, helpful customer service and a strong selection of high-quality research. (It’s worth noting, however, that the broker doesn’t offer any no-transaction-fee mutual funds and only offers five commission-free exchange-traded funds. If you’re looking for those, you’ll want to scroll to our final category below.)

Fidelity nabbed this top spot this year by lowering its trade commission from $7.95 to $4.95, putting it in direct competition with OptionsHouse and making it one of the lowest-cost brokers around. That kind of low commission is especially notable for a broker this well-rounded: The company’s trading platform is advanced and intuitive, though it is restricted to customers who trade at least 36 times in a rolling 12-month period. Fidelity also offers a large list of commission-free ETFs and no-transaction-fee mutual funds, and the best selection of research in the business. New traders will also love the option to drop in and ask questions at one of the company’s 180 local branches.

Best brokers for completely free trading

Both of these services offer commission-free stock trading. 

We guess the only thing better than discount is free, and these two brokers deliver that: 100% commission-free stock trading. They don’t top this list, though, because, as you might expect, you have to give up a few comforts to earn that cost savings. At Robinhood, investors can trade more than 5,000 stocks and ETFs via a streamlined app that offers no analysis tools but reasonable execution speeds and free real-time market data. Robinhood also offers margin trading for a flat fee based on debit balance.

Loyal3’s model is a bit different: The company partners with 70 or so companies to bring investors direct access to their stocks, initial public offerings and follow-ons. The service offers fractional shares for an investment as little as $10. Again, the drawbacks here are in functionality: There’s no trading platform or research. Loyal3 also slacks in trade execution, batch-trading orders just once or twice a day.

Best discount brokers for options traders

These brokers offer very low commissions and contract fees on options trades.

OptionsXpress is built for options traders. The broker moved from a tiered pricing schedule that favored active traders to flat pricing this year, with a per-contract charge of 65 cents and a commission of just $4.95. OptionsXpress has no minimum and no annual or inactivity fees, and we were impressed by its strategy and analysis tools.

EOption’s trading platform isn’t much to speak of, but the company’s pricing definitely is: Options are just $3 per trade and $0.15 per contract. The fine print is in the fees: There’s a $50 inactivity fee, charged to accounts that haven’t executed at least two trades in the last 12 months or have less than $10,000 in credit or debit balances.

Best discount brokers for frequent traders

These companies offer low costs for traders who can avoid inactivity fees.

Overall top choice OptionsHouse would be our first pick here, too. But to present some additional options, Interactive Brokers and TradeKing easily fall next in line. Both brokers have one major downfall: minimum trade activity requirements. But frequent traders are unlikely to run afoul of those rules, which means they’ll benefit from the brokers’ low trade commissions.

Interactive Brokers charges just 0.5 cent per share with a $1 per-order minimum and maximum of 0.5% trade value but requires that accounts with balances under $100,000 meet a minimum of $10 a month in trade commissions. Accounts with a balance of $2,000 or less must meet minimum monthly commissions of $20. If those minimums aren’t met, Interactive Brokers charges the difference as a fee.

TradeKing also has an inactivity fee, though it’s far less punishing: The broker charges a $50 annual inactivity fee to accounts with no executed trades in the last 12 months and a combined value of less than $2,500. There’s no per-share pricing, but commissions are a very reasonable $4.95.

Best discount brokers for mutual funds, ETFs

These brokers offer a number of commission-free ETFs and no-transaction-fee mutual funds.

Charles Schwab is the only broker that received five stars from us for both no-transaction-fee mutual funds and commission-free ETFs — the company offers over 3,000 and over 200, respectively. Combine that with the company’s newly lowered trade commissions — just $4.95 — and Schwab will suit the needs of the vast majority of investors.

TD Ameritrade actually beats Schwab’s no-transaction-fee mutual fund selection, with about 4,000 offerings. The company also has over 100 commission-free ETFs. The downside: Investors who also trade stocks might shy away from TD Ameritrade’s higher $6.95 trade commission. But the broker offers two of the best trading platforms in the business to all customers, free of charge.


Summary: Best discount brokers

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

OptionsHouse

OptionsHouse
Overall
Low commissions; superior tools
$4.95
per trade
$1,000 in commission-free trades
$0

Fidelity

Fidelity
Overall
Low commissions, quality research
$4.95
per trade
300 commission-free trades
$2,500

Robinhood

Robinhood
Free trading
No-frills, free trading app for beginners
$0
per trade
n/a
$0

Loyal3

Free trading
Invest as little as $10 in well-known stocks
$0
per trade
n/a
$0

OptionsXpress

OptionsXpress
Options traders
Significant discounts for high-volume traders
$4.95 + $0.65/contract
50 commission-free trades
$0

EOption

Options traders
Very low cost options trades
$3 + $0.15/ contract
n/a
$500

Interactive Brokers

Frequent traders
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)

TradeKing

TradeKing
Frequent traders
Impressive platform and research; low commissions
$4.95
per trade
$1,000 in free trade commissions
$0

TD Ameritrade

Mutual funds, ETFs
Large selection of commission-free ETFs and funds
$6.95
per trade
Up to $600
cash bonus
$0

Charles Schwab

Charles Schwab
Mutual funds, ETFs
Large selection of commission-free ETFs and funds
$4.95
per trade
Up to $500 cash bonus
$1,000

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

Updated March 23, 2017.