Brokerage Accounts Trading Platforms
Best Online Brokerage Accounts and Trading Platforms
Compare the best online brokerages
Best Online Brokerage Accounts and Trading Platforms:
- Best For Beginners: Robinhood
- Best Broker: TD Ameritrade
- Best Overal: Charles Schwab
- Best Customer Service: Fidelity
- Best Intermediate Platform: Webull
- Best Broker for Advanced Traders: Interactive Brokers
Robinhood: Best For Beginners
4.1/5
Overview
Account Minimum: $0
Fees: $0 for stock/ETF trades and options trades
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Important
Robinhood is a financial services company that offers a mobile app for online stock trading. It was founded in 2013 and has since become a popular platform for retail investors.
Why We Chose It
Robinhood is our overall pick for beginner investors because it has a user-friendly interface and requires no minimum account balance. It also offers a range of educational resources, such as market news and webinars, to help new investors learn about the stock market. In addition, Robinhood allows users to trade stocks and exchange-traded funds (ETFs) commission-free, which can make it an affordable option for beginners who may be making frequent trades while they are still learning. Overall, Robinhood’s accessibility and low barriers to entry make it an attractive option for beginners who are interested in starting to invest in the stock market.
Pros
Easy to uses
Good Customer support
Cash is automatically swept into a money market fund
Rich educational offerings
Cons
Platform has prohibited the buying of shares
Platform Crashes from time to time.
You earn a tiny rate of interest on uninvested cash unless you move cash into money market funds
TD Ameritrade: Best for Beginners
4.5/5
Overview
Account Minimum: $0
Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
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Important
Customer service seems to be better via the chat feature. Phone support may take longer and seems to be less effective.
Why We Chose It
The smooth introduction to the market for new investors is one of TD Ameritrade’s strengths. Some brokers might be cheaper or flashier, but TD Ameritrade has the resources, range of offerings, and support that will help new investors become better investors over the long term. The ability to paper trade on the TD Ameritrade platform without making any commitment is a major factor in choosing the brokerage account. TD Ameritrade makes a very compelling case for being the brokerage account that new investors choose because it manages to be a comprehensive and robust platform without being overwhelming.
Pros
Integrates many different indicators
- Platform makes option trading easy
Cons
Customer Service could be better
Charles Schwab: Best Overall
4.8/5
Overview
Account Minimum: $0
Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
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Important
Charles Schwab is a financial services company that offers a range of products and services, including brokerage, banking, and financial advisory services. It was founded in 1971 and is headquartered in San Francisco, California. The company is known for its low-cost trading fees and a wide range of investment products, including stocks, bonds, mutual funds, and ETFs. Charles Schwab also offers a range of educational resources and tools for investors, including market analysis and financial planning services.
Why We Chose It
Charles Schwab is a full-service investment firm that ranks highly across many of our scoring categories, however, they are frequently edged out by slightly more focused offerings. This is largely on the strength of its ETF screener combined with the general quality of its overall offering, including education around ETF investing and portfolio analysis tools for everyday investors, Schwab continues to be our top pick when it comes to ETFs. No other brokerage account provides the combination of simplicity, excellent research, and multi-criteria screening that Charles Schwab does for investors looking to buy ETFs.
Pros
Customer Service
Research and reports
Rich educational offerings
Cons
You may have to use multiple platforms to utilize your preferred tools
Option Trading is more complex to set up
Fidelity Investments: Best Customer Service
4.9/5
Overview
Account Minimum: $0
Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
Read full review
Important
On April 26, 2022, Fidelity Investments became the first retirement plan provider to allow cryptocurrencies in the 401(k) accounts that it services. This new cryptocurrency offering will begin with Bitcoin (BTC) and will be available to 23,000 employers that use Fidelity to administer their retirement accounts by the middle of 2022.
Why We Chose It
Fidelity is a good broker because it offers a wide range of investment options and has a long-standing reputation for being honest and reliable.
Fidelity has been ranked highly in our Best for Low Cost category every year. It offers commission-free online U.S. stock, ETF, and options trading—and there are no account fees or minimums to open a retail brokerage account.
Pros
86.17% of Fidelity orders are executed at a price better than the national best bid or offer
Robust research and asset scanners
Cash is automatically swept into a money market fund
Rich educational offerings
Cons
You may have to use multiple platforms to utilize your preferred tools
Wide menu of account types can make choosing the right one challenging
You earn a tiny rate of interest on uninvested cash unless you move cash into money market funds
Webull: Great Intermediate Platform
4.3/5
Overview
Account Minimum: $0
Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
Read full review
Important
Webull is a financial services company that offers a mobile app for online stock and options trading. It was founded in 2017 and is headquartered in New York City. The platform is known for its commission-free trading and advanced trading tools, such as real-time market data and analysis.
Why We Chose It
Webull is easy to use, providing good trading functionality and a broad package of tools and functionality including news, fundamental and technical analysis, and stock screeners. Webull is not the broker for people looking for a broader range of products, such as fixed income, mutual funds, or managed accounts.
Webull is a good broker for people looking for a broad range of products, including news, fundamental and technical analysis, and stock screeners. However, it is not the broker for people looking for a broader range of products, such as fixed income, mutual funds, or managed accounts.
Pros
Great graphs
Solid Mac and Windows app
Rich educational offerings
Cons
Some indicators are missing
Interactive Brokers: Best For Advanced Traders
4.4/5
Overview
Account Minimum: $0
Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
Read full review
Important
Interactive Brokers is a global electronic brokerage firm that provides services to retail and institutional traders, including professional traders and market makers. The company was founded in 1978 and is headquartered in Greenwich, Connecticut. It offers a wide range of investment products, including stocks, options, futures, and foreign exchange. Interactive Brokers is known for its advanced trading platform and low commission rates, making it a popular choice among active traders.
Why We Chose It
We continue to recommend Interactive Brokers (IBKR) as the best choice for advanced day traders. This is based on a number of factors, including IBKR’s international exchanges, an extensive selection of stocks on the easy-to-borrow list, and very low margin rates. As of April 2022, advanced cryptocurrency-focused day traders are now able to engage in direct coin trading, and everyone else will find that Interactive Brokers has all the assets, reach, and tools they need, along with very attractive margin rates. Interactive Brokers is one of the best trading platforms overall, so it is a natural fit for advanced traders.
Pros
Great for option trading
Robust research and asset scanners
Cash is automatically swept into a money market fund
Cons
21+
Steeper learning curve than other platform
Fidelity Investments: Best Overall
Ultimately, choosing the best brokerage platform is about who you are as an investor now and what type of investor you aspire to be in the future. Once you have answered these fundamental questions, our ranking can help you narrow down the field. For example, if you are just starting out as an aspiring options trader, you may be better served by reviewing our picks for options traders rather than going through the general best for beginners picks. As you grow as an investor, however, you may also find that your goals and approach to the market have changed—maybe you desire a more robust platform with more assets and exchanges, or maybe you are looking to simplify things and take a more passive approach. The best thing about the high level of competition in the brokerage space is the number of brokers with solutions to serve your needs, no matter how those change over time.
Compare the Best Online Brokers
Company | Category | TMI Rating | Account Minimum | Basic Fee |
|---|---|---|---|---|
Robinhood | Best for Beginners | 4.8 | $0 | $0 for stock/ETF and option trades |
TD Ameritrade | Best Broker | 4.5 | $0 | $0 for stock/ETF trades, $0 plus $0.65/contract for options trade |
Charles Schwab | Best Overal | 4.8 | $0 | $0 for stock/ETF trades, $0 plus $0.65/contract for options trade |
Fidelity | Best Customer Service | 4.9 | $0 | $0 for stock/ETF trades, $0 plus $0.65/contract for options trade |
Webull | Best Intermediate Platform | 4.3 | $0 | $0 for stock/ETF and option trades |
Interactive Brokers | Best Advanced Platform | 4.4 | $0 | $0 for stock/ETF trades, $0 plus $0.65/contract for options trade |
How Should You Choose a Brokerage Account?
When choosing an online broker, you have to think about your immediate needs as an investor or trader. If you are a beginner, you may need a broker who has great educational material about the stock market and other financial markets. This is one of the key reasons TD Ameritrade is our top pick for beginners. A number of brokers also allow for paper trading prior to funding an account, giving you an opportunity to learn the platform, sample the available assets, and test out the trading experience without risking real capital.
What Is an Online Brokerage Account and How Does it Work?
A brokerage account is a financial account similar in function to the accounts you have with a bank. With a brokerage account, you deposit funds with an investment firm (the brokerage). This is usually done by a transfer from your existing bank account. Once funds are added to your brokerage account, you can put the money to work using the brokerage’s trading platform to invest those funds in the market. The assets you buy with your cash can be anything offered by that brokerage, including stocks, bonds, ETFs, and even cryptocurrency.
Your online brokerage account will display your holdings (the assets you’ve purchased) as well as your cash balance (your buying power). If you invest in something that gains in value, you can sell it and the profits will be deposited in your online brokerage account. From there, you can place another trade or even transfer the funds out to your regular bank account to use elsewhere. Some brokerage accounts even allow you to earn interest on your uninvested cash.
How Much Money Do You Need to Start Investing?
There is no longer a real minimum to start investing in the financial markets. With many brokers offering accounts with no required minimums and access to fractional shares, you can start investing with any amount of money. If you don’t have a lot of money to invest, however, it will influence how you approach the market. Although you could invest $1 in fractional shares of a specific stock, the better approach with limited capital is to use ETFs. Index tracking ETFs, for example, offer greater diversification for your dollar than a single company stock because every share (and fractional share) of the ETF replicates an index made up of many companies in many different industries. You could also consider using options to leverage your dollars with a directional bet on the market or a specific stock, but this is a strategy best reserved for risk capital—not the whole of your limited investment capital.
When investing with small sums, consistency is the key to building wealth. If you can regularly put a set amount of money into the market—even $10 a week—you will be surprised at how quickly it begins to grow. This consistency also helps to smooth market effects, as you will be buying dips and peaks as the market goes up and down.
Can You Invest With a Small Amount of Money?
Many online brokers allow for small minimum deposits which can be a great alternative for those with limited funds. Account minimums (if any) are displayed at the top of our reviews, as well as in our selection of the best platforms for different types of investors. If you are looking for more general guidance on investing with limited capital, check out our article on smart investing on a small budget.
Do Brokers Offer Mobile Platforms?
Some online brokers have incredible mobile apps delivering nearly all the features that their desktop counterparts do. Options traders, for example, will find the tastyworks app to be a streamlined version of the tastyworks desktop platform. TD Ameritrade customers can pick between the more robust thinkorswim mobile app aimed at traders or the standard TD Ameritrade app for less active investors, with the features of each adjusted for the intended user.
Can you lose money in a brokerage account?
Yes, you can. It is a reality of the market that no reward comes without risk. You can lose money buying a bad investment, but you can also lose by buying a good investment at the wrong time. When it comes to the financial markets, there are endless possibilities for making and losing money. Unless all the funds in your brokerage account are sitting in uninvested cash, there is a risk you will lose money. Another way of looking at that, however, is that a brokerage account sitting full of uninvested cash isn’t at risk of making any money either. You can use strategies like asset allocation and diversification to reduce the risk of you losing money, but you will never fully eliminate it without also eliminating your chances of making a decent return.
Can I buy stocks without a broker?
Yes, you can actually buy stocks without a broker, but it is not a common approach these days. Some companies still offer direct stock purchase plans that allow you to buy shares directly from the company. Companies administer these plans according to internal rules, and some are only open to company employees. You need to contact companies to find out whether they offer a direct stock purchase plan and what the terms and conditions are. These plans initially helped investors avoid brokerage fees, but the rise of online discount brokers with zero fees has removed this barrier, making the direct stock purchase plan somewhat of a relic.
The Difference Between Investing and Trading
Another important thing to consider is the distinction between investing and trading. When people talk about investing they generally mean buying assets to hold for a long period of time. The goal of investing is to gradually build wealth and reach your retirement goals. Conversely, trading involves short-term strategies that maximize returns on a short-term basis, such as daily or monthly. Trading is generally considered riskier than investing.
All these factors are worth considering before choosing an online broker. Do you want to trade or invest? Do you want a great mobile app to check your portfolio wherever you are? What types of assets are you looking to invest in? Answering these questions is not always easy. For more support on how to choose a broker, you can check out our guide to choosing a stock broker. Once you’ve made a decision on a broker, you can also check out our guide to opening a brokerage account.
