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. 

Charles Schwab is our top brokerage account for stock trading, and with $4.95 trade commissions, it’s no surprise it shows up here as well. The broker offers a top-of-the-line trading platform, helpful customer service and a strong selection of high-quality research. Fund investors will also love the large selection of no-transaction-fee mutual funds and commission-free ETFs.

Fidelity‘s commissions match Schwab, and 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 broker for free trading

Robinhood brings investors completely commission-free stock trading. 

We guess the only thing better than discount is free, and Robinhood delivers on that. Investors can trade more than 5,000 stocks and ETFs 100% commission free, via Robinhood’s 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.

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.

 

Interactive Brokers has one major downfall: minimum trade requirements. But frequent traders are unlikely to run afoul of those rules, which means they’ll benefit from the broker’s low trade commissions. Interactive Brokers charges just $0.005 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.

Ally Invest, formerly known as TradeKing, has no inactivity fee. There’s also no per-share pricing, but commissions are a very reasonable $4.95. Those who trade 30 or more times per quarter or maintain a balance of $100,000 or more will qualify for discounted rates: $3.95 per trade, and 50 cents per options contract.

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

Charles Schwab

Charles Schwab
Overall; mutual funds and ETFs
Large selection of commission-free ETFs and funds
$4.95
per trade
$100 referral award for first-time clients
$1,000

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

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)

Ally Invest

Ally
Frequent traders
Impressive platform and research; low commissions
$4.95
per trade
None at this time
$0

TD Ameritrade

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

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

Updated June 30, 2017.