Best Online Brokers For Stocks in 2020

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In the race for new customers, investment brokers compete fiercely with one another.

Not only do they offer many of the same services, including trading tools and managed investment options, but they’re also matching one another in fees – which are now usually zero.

So choosing the best online brokerage account for stock trading will now depend on what type of trading you plan to do.

Some trading platforms provide a more general investment approach. Others build niches to focus on options trading or more advanced investing. You should choose the broker that best matches your investment style.

My list of the 12 best online brokers for individual stock trading, below, includes trading platforms that excel with specific types of trading. Each broker is “the best” at something; we’ll leave it to you to choose which will work best for you.

The Best Online Brokers for Stock Trading

Here are the 12 best online brokers for stock trading in 2020:

1. Fidelity

  • Best For: All-Around + Beginners
  • Minimum Account Balance:$0
  • Trading Fees: $0 on US Stocks, ETFs & Options (+$0.65 per contract)
  • Current Promotion: None
  • Robo-Advisor Option?: Yes
  • Customer Support: 24/7 phone support in over 150 local branches
  • Read our Fidelity review

2. Robinhood

3. Charles Schwab

  • Best For: Beginners
  • Minimum Account Balance:$0
  • Trading Fees: $0 on Stocks, ETFs and Options (+ $0.65 per contract)
  • Current Promotion: None
  • Robo-Advisor Option?: Yes
  • Customer Support: 24/7 phone & live chat, over 300 local branches
  • Read our Charles Schwab review

4. Ally Invest

  • Best For: Investing & High Yield Savings
  • Minimum Account Balance:$0
  • Trading Fees: $0 on US Stocks, ETFs and Options (+ $0.50 per contract)
  • Current Promotion: Tiered Bonus, ranging from $50 for opening a $10k account, to $3,500 for a $2 million account
  • Robo-Advisor Option?: Yes
  • Customer Support: 24/7 phone, email & live chat
  • Read our Ally Investing review

5. E*TRADE

  • Best For: Options Trading
  • Minimum Account Balance:$0
  • Trading Fees: $0 on Stocks, ETFs and Options (+ $0.65 per contract)
  • Current Promotion: Tiered Bonus, ranging from $200 for opening a $25k account, to $2,500 for a $1 million account
  • Robo-Advisor Option?: Yes
  • Customer Support: 24/7 phone, email & live chat
  • Read our E*Trade review

6. TradeStation

  • Best For: Variety of Investment Products
  • Minimum Account Balance: $0
  • Trading Fees: $0 on Individual Stocks, ETF trades, Options ($0.50 per contract), Futures, or Cryptocurrency (Mutual Fund trade commissions are $14.95)
  • Current Promotion: N/A
  • Robo-Advisor Option?: N/A
  • Customer Support: Phone, Live Chat, M – F, 8 am to 8 pm (Eastern)
  • Read our TradeStation review

7. Merrill Edge

  • Best For: Investment Research
  • Minimum Account Balance:$0
  • Trading Fees: $2.95 on Stocks, ETFs and Options (+ $0.65 per contract) ($0 per trade for Bank of America Preferred Rewards Members)
  • Current Promotion: Tiered Bonus, ranging from $100 for opening a $20k account, to $600 for a $250,000 account
  • Robo-Advisor Option?: Yes
  • Customer Support: 24/7 phone, email & live chat
  • Read our Merrill Edge review

8. TD Ameritrade

  • Best For: Investing & Banking
  • Minimum Account Balance:$0
  • Trading Fees: $0 on Stocks, ETFs and Options (+ $0.65 per contract)
  • Current Promotion: Tiered Bonus, ranging from $100 for opening a $25k account, to $600 for a $250,000 account
  • Robo-Advisor Option?: Yes
  • Customer Support: 24/7 phone & live chat, 350 local branches + over 1,200 TD Bank branches
  • Read our TD Ameritrade review

9. M1 Finance

  • Best For: Managed Stock / ETF Portfolios
  • Minimum Account Balance: $0
  • Trading Fees: $0 Stocks and ETFs (does not offer mutual funds)
  • Current Promotion: None
  • Robo-Advisor Option?: Fully automated investment management where you choose the investments
  • Customer Support: Phone & email during regular business hours
  • Read our M1 Finance review

10. Vanguard

  • Best For: Mutual Funds
  • Minimum Account Balance: $0
  • Trading Fees: $2 to $7 Stocks, based on account size; 1,800 fee-free ETFs and 3,000+ fee-free mutual funds
  • Current Promotion: None
  • Robo-Advisor Option?: Yes
  • Customer Support: Phone M – F
  • Read our Vanguard review
  • Compare: Vanguard vs. Fidelity

11. Interactive Brokers

  • Best For: Active Traders
  • Minimum Account Balance: $0
  • Trading Fees: $0 on US Stocks & ETFs; 4,200+ no fee mutual funds
  • Current Promotion: None
  • Robo-Advisor Option?: Yes
  • Customer Support: 24/7 phone & live chat
  • Read our Interactive Brokers review

12. Firstrade

  • Best For: Advanced Investors
  • Minimum Account Balance: $0
  • Trading Fees: $0 on Stocks, ETFs & Options (no per contract fee), and Mutual Funds
  • Current Promotion: Up to $200 in Transfer Fee Rebates or $25 Wire Fee Rebate
  • Robo-Advisor Option?: N/A
  • Customer Support: Phone, Live Chat, M – F

Which Is The Best Online Brokerage for Beginners?

How about a tie between Charles Schwab and Fidelity? Not only are the two the largest, full-service investment brokerage firms in the industry – which provides the stability beginners need – but there’s a long list of tangible benefits to make any new investor happy.

Let’s start with this: Neither Fidelity nor Charles Schwab require an initial account minimum to invest.

Though you will certainly need to have funds in your account to begin investing, you can open your account with no money at all, then make periodic additions until you have enough funds to begin investing.

Then there’s the fact that neither firm charges fees on stock trades, exchange traded funds (ETFs), or even options trading. Since beginning investors will likely start out with small portfolios – maybe just a few hundred dollars – the last thing they need are trading fees eating into their accounts and their profits.

But along with free trades both platforms provide round-the-clock customer service. You can reach a live representative by phone or live chat, and if you prefer face-to-face, each company has an extensive network of local branch offices.

But let’s not stop there. Charles Schwab and Fidelity offer a wealth of trading tools and investment research to help beginning investors up their game and get the knowledge needed to become experienced investors. (Note that Schwab does not currently provide forex trading.)

The Best Online Brokers Offer Robo-Advisors

Still another benefit offered by Fidelity and Schwab are managed portfolio options. Each platform offers its own robo-advisor.

Robo-advisors are automated investment platforms that provide full portfolio management for a very low annual fee. In fact, Charles Schwab charges no management fee at all on its robo-advisor, Charles Schwab Intelligent Portfolios.

When you invest through a robo-advisor, your only “job” is to provide funds for investing and share your risk tolerance and investing goals.

The robo-advisor will design and manage your portfolio, which will include periodic rebalancing and reinvesting of dividends, based on your preferences.

With a robo-advisor option, both Charles Schwab and Fidelity offer beginning investors an opportunity to have some or all their portfolio professionally managed. You can even choose to have some of your money managed through the robo-advisor, while you cut your teeth on self-directed trading with the rest of your portfolio.

The point is, both Charles Schwab and Fidelity give you that option, as well as everything else you’ll need to begin investing as a new investor.

Who Is The Cheapest Online Brokerage?

In this category, we have a nine way tie! That is, nine of the 12 brokers we’ve included on our list are also some of the best brokers that charge no fees for trading of stocks, ETFs, options, and often mutual funds.

The nine low-cost brokers are as follows:

  • Robinhood
  • Ally Invest
  • M1 Finance
  • Fidelity
  • Charles Schwab
  • E*TRADE
  • TD Ameritrade
  • Interactive Brokers
  • Firstrade

The only three brokers missing from the list are Vanguard, Merrill Edge, and TradeStation. But Vanguard is primarily a platform for mutual fund investors. They offer more than 1,800 ETFs and over 3,000 mutual funds commission-free. So, if you primarily invest in mutual funds, Vanguard will be your go-to broker.

Merrill Edge charges a fee of $2.95 per stock trade, ETF trade and options trade. But that fee will be waived if you’re a Bank of America Preferred Rewards Client.

I left TradeStation off because of their expensive mutual fund commissions and their high IRA annual fees.

Why All the Low Fees?

Trading fees going, going, (almost) gone in the investment brokerage industry. Commission-free trades and commission-free ETFs aren’t just the wave of the future. They’re the wave of the present for almost all the leading trading platforms.

We can thank the Internet for that. Online trading has changed the entire process, automating tasks your human broker once had to do manually. Robinhood and the pioneering robo-advisors Wealthfront and Betterment were among the first “discount brokers,” though they’ve never offered a full-service approach.

Now, the success of this business model has forced most of the major, full-service brokerage firms to follow suit and offer investment accounts with mobile trading, commission-free trades, and no minimum deposits to open accounts.

So what does this mean to a beginning investor? It means fees don’t have to be a major determining factor when you compare brokers. This frees you up to look into other features such as fractional shares, real-time trades, and highly rated mobile apps.

You could even choose a brokerage account based on how well you like its website or customer support!

Which Online Broker’s Website Is Best?

Sorry but we’re going to have to declare another tie here. Once again it’s between Fidelity and Charles Schwab.

While neither of these giants may be the absolute leader in any single category (except for beginner investing), each is near the top in virtually every category. And the proof is that the two are the largest diversified investment brokers in the industry.

Fidelity.com

Fidelity requires no minimum account balance, and charges $0 for trades on stocks, ETFs and options. They also offer the ability to trade in just about any security available.

Fidelity lets you invest in more than 10,000 mutual funds which include Fidelity’s own funds. (Fidelity is one of the largest mutual fund providers in the world.)

Fidelity’s customer service raises the bar in the industry. You can reach a real person on the phone 24/7. You could also visit one of 150 local branches in major cities across the country.

Like many of the large investment firms, Fidelity also offers managed portfolio options. This includes their Fidelity Go robo-advisor, and Fidelity Wealth Management Advisory for larger portfolios.

Simply put, Fidelity is an outstanding platform if you’re a beginning investor just learning to trade stocks or buy index funds or a seasoned veteran who needs no educational resources and just wants a place to access the best financial products.

Schwab.com

Charles Schwab and Fidelity are often mentioned in the same sentence, and there’s good reason for that. As the two largest brokerage firms in the industry (Schwab is THE largest), they’re close competitors, offering similar services and benefits.

Like Fidelity, Schwab charges no trading commissions on stocks, ETFs and options, and also offers thousands of no-load, no transaction fee mutual funds.

Customer service is available 24/7 by phone and live chat, and the company has more than 300 local branch offices if you prefer face-to-face contact. It also has an excellent suite of free trading tools and educational resources that will benefit investors at every level.

If you prefer to have your portfolio professionally managed, either partially or entirely, you can take advantage of the no-fee robo-advisor, Charles Schwab Intelligent Portfolios. You would need a $5,000 account minimum for these services.

For larger investors seeking a higher level of service, Schwab Private Client and the Schwab Advisor Network can meet your needs. ($25,000 account minimum to enroll.)

Like Fidelity, Charles Schwab has the right account types for a low-cost beginner, a veteran investor, and everyone in between.

Whether you choose Fidelity or Charles Schwab, you can’t go wrong with either broker.

What’s The Best Broker For Retirement Accounts?

Personal finance bloggers used to write a lot of posts about the best brokers for retirement accounts. We’d spend hours compiling data to compare fees and commissions against margin rates and minimum investments.

Choosing the best broker is still a noble goal when you’re ready to start investing for retirement (and you should start now if you haven’t already).

But coming up with the answer has gotten more difficult — or a lot easier depending on your point of view.

Online competition has flattened out these fee structures, making full-service brokers resemble discount brokers.

So when you open your IRA (or any other kind of new account) you can just about ignore trading fees and commissions since they’re almost always going to be $0.

Instead, you can compare account types, customer service availability, ease of use on a broker’s mobile app, or whether or not a human advisor is available when needed despite the low-cost model.

Once again, my nod goes to Fidelity or Charles Schwab. If you’re a new investor I’d give a slight edge to Fidelity because of its educational resources. It pulls in expert guidance from a wide variety of sources to give you a broad view of the securities you’re considering.

While you could open an IRA within your robo-advisor like Betterment, do this only if you really do want a hands-off approach and don’t plan to self-direct or have a conversation about your retirement accounts with a human advisor.

And one more piece of advice: Watch out for IRA closing fees if you want to change brokers in the future.

Which Online Stock Broker is For You?

It’s always tempting to rank all the major brokerage firms to create a top-10 list (or a top 12 list in my case.) But it’s impossible to come up with a concise ranking system for each.

Five years ago I would have done it. But now with so much standardization between these platforms it’s a lot harder to come up with a way to measure — especially once you get past the top 2 — Fidelity and Charles Schwab (not necessarily in that order).

For example, while two or three years ago, free trading was a novelty offered by only one or two firms, it’s increasingly becoming standard practice by all brokers.

What might be the best brokerage firm for one person may be completely unsatisfactory for another. It really comes down to the various nuances that make each firm specialize in a certain niche.

For example, if you just want a way to sell stocks once in a while, a powerful online stock trading interface like TradeStation may be your favorite way to access the stock market.

If you want a broker connected to a large bank that also offers credit cards and competitive interest rates on loans, Merrill Edge with its connection to Bank of America may suit your needs. (Though I’d warn you this firm is holding onto its old fee structure.)

If you want to move cash in and out of a high interest savings account and into your brokerage account, consider Ally Invest.

If you’re an active trader who wants to trade high volumes of individual stocks at your leisure, consider Robinhood as your trading platform. If you want full-service stock brokers with low fees, we’re back to Schwab and Fidelity.

You get the point, and the point is this: If you know what your niche is, you can find your best broker.

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