Best Discount Stock Brokers

A broker gives you access to the markets for investing your money and growing your financial freedom. But that doesn’t mean you need to pay a broker high fees and commissions which cut into your earnings — especially in 2022 when leading discount stock brokers offer free trading.

While platforms with free trading and no account minimums don’t always come with the full power of a traditional brokerage house, for those just starting to invest, a free broker is a perfect place to start trading.

15 Best Discount Stock Brokers for 2022

Here are today’s best discount stock brokers:

1. Public.com

Public.com is an investing platform for all types of investors, and as its name suggests, Public.com provides users with a community of support and advice from various sources.

You can even see how some celebrities are investing their money!

With more than 80 years in the financial industry, public.com has developed tools to help you better understand how and why the market moves the way it does Managing your accounts has never been easier. Diversify with stocks, ETFs, cryptocurrencies, and alternative assets.

If your portfolio is eccentric, no problem. You can manage your music royalties or the value of your fine art collection with public.com.

Pros:
  • Trades direct with exchanges
  • Commission-free stock/ETF trading
  • Informative speeches from experienced investors and analysts
  • Offers the ability to observe how others in the community are investing
  • Encrypted security for all accounts
Cons:
  • Desktop version is not available
  • 1% commission fee on cryptocurrency trades

 

2. Webull

Webull has quickly become a top discount broker with its feature-rich, zero-commission trading platform.

Users can start investing with as little as $5 via fractional shares, and there are no commissions on trading stocks, ETFs, or even options. Webull also offers a free “paper trading” feature for new investors to practice before investing their own money.

Their mobile app has earned an impressive 4.7 (out of 5) in the app store, and 4.3 (out of 5) in the Google Play Store.

Whether you’re a beginner investor, or someone looking for an advanced trading platform, Webull is a great fit. Plus, you’ll earn up to two free stocks just for opening and funding your account.

Pros
  • Zero commission for trading stocks, ETFs, and options
  • Supports fractional trades
  • Attractive sign-up bonus and referral program
  • Excellent 24/7 customer service
Cons:
  • Less educational content than competitors
  • Newer company without an established history

 

3. TradeStation

TradeStation is a direct access broker that got its start in the early 1980s as a service for investment bankers, institutional investors, and other serious traders.

These days, TradeStation attracts advanced and casual investors alike, because of its easy-to-use software, fast execution speeds, and advanced features that rival any of the other popular brokers.

They’ve also teamed up with TradingView, so that you can connect your account to the popular charting platform and execute trades right from there.

TradeStation offers two pricing plans: TS Select and TS Go. TS Select has a minimum deposit of $2,000, while TS Go has no account minimum.

Both plans offer $0 commissions, but TS Go charges $10 per trade if you use their award-winning desktop platform. Instead, you’d be using a trimmed down mobile or web-based version. TS Select also has slightly lower fees for options and futures contracts.

Pros
  • Easy-to-use software available in web, desktop and mobile versions
  • Earn interest on your crypto investments – including 4% on U.S. Dollar Coin
  • Feature-rich for advanced traders, including a powerful screener and custom indicators
  • Full access to TradeStation’s educational resources, including paper trading accounts
Cons
  • Higher margin rates than competitors
  • No fractional trades

 

4. SoFi

SoFi (SoFi Technologies, Inc) is an online banking platform based in San Francisco, California that provides a wide range of services to customize your financial life.

Get an auto or personal loan. Or a mortgage loan. You can even refinance your student loans (federal) at a fixed rate of 4.24% APR.

Invest in a retirement account or ETFs. Their setting also let the user automate their actions if they don’t want to be as hands-on. Investing in cryptocurrency is also supported by SoFi.

If you’re not interested in a loan or investing, but just need normal banking options, SoFi has you covered there as well. Checking accounts (new feature) with up to 3% APY, no late fees, and rewards up to $250 by signing up and setting up direct deposit. Apply for a credit card with up to 3% cash back and no yearly fees.

Pros:
  • Desktop and mobile
  • Partners to offer insurance
  • Competitive loan rates
  • Cryptocurrency friendly
Cons:
  • No physical locations
  • Requires a membership to get full-service access (advice, information, coaching)

 

5. M1

M1 is an online investment and banking platform for the investor that is serious and maybe has a little more experience. Their customization tools could be a little intimidating to some, as they offer up to 60 ready-made different portfolio options. From high to low risk and everything in between.

Personal and margin loans are available, with rates of the latter from 5.75% to 7.25%. If you have money sitting in a low-yield savings account, M1 offers an alternative of 4.5% APY with their savings account.

Overall, M1 is a great platform for investors looking to customize and automate their portfolio to the max.

Pros:
  • Tools to personalize your portfolio
  • No trading fees-desktop and mobile app
  • Crypto friendly
Cons:
  • No financial advisors available for assistance
  • $100 account minimum

 

6. TD Ameritrade

Let’s get this out of the way first: Charles Schwab is in the process of buying TD Ameritrade, which means any new Ameritrade account you open will eventually become a Schwab account.

But the firm still is accepting new clients and is a stand-out in the business, so it’s still on this list.

Ameritrade resembles other traditional market leaders, such as Schwab and Fidelity, with its wide variety of securities and a robust array of educational and research tools.

But its think-or-swim platform is considered the gold standard for many advanced traders. The platform is fully customizable – allowing everything from custom screeners and indicators, backtested strategies, to nearly algo trading.

Beginner stock investors, on the other hand, like Ameritrade’s educational resources, which include live seminars (online and in-person) along with detailed videos and even quizzes. It also offers paper-trading, so that you can learn the market before risking any actual cash.

As with Fidelity, expect to pay a 65-cent contract charge for options and a high fee for broker-assisted trades, though these policies will likely fall in line with Schwab’s price points after the acquisition is complete.

Pros
  • Good variety of securities
  • Top-notch educational tools for beginners
  • Great selection of low-cost mutual funds
Cons
  • High fees for broker-assisted trades
  • Firm and its accounts should soon be part of Schwab

 

7. Interactive Brokers

Serious traders like Interactive Brokers because of its nearly unmatched variety of securities, which include foreign markets, commodities, margins, and futures.

In the fall of 2019, Interactive launched a new platform, IBKR Lite, for more casual investors looking for free and discounted trades.

The new platform delivers unlimited free trades of stocks and ETFs from domestic markets, along with a solid selection of commission free mutual funds.

While IBKR Lite does not have all the features of Interactive’s original platform, now known as IBKR Pro, the Lite platform performs respectably and offers a simple, streamlined approach for new investors who’d like to make regular ETF, stock, bond, options, or mutual fund trades.

And, Interactive has a solid robo-advising option with management fees as low as 0.08 percent for some of its 70 or so portfolio options.

Pros
  • Simple dashboard
  • Fractional shares available
Cons:
  • Some educational tools cost extra
  • Inactivity fees (only if you upgrade to IBKR Pro)

 

8. E*Trade

E*Trade has also joined the $0-per-trade club, eliminating its $6.95-per-trade fee in October of 2019.

This means E*Trade has become yet another option for free trading. But E*Trade stands out to me because of its options trading platform, Power E*Trade, which gets its power from the firm’s acquisition of OptionsHouse back in 2016.

Power E*Trade’s charts let you visualize potential trades — a helpful feature with something as abstract as options. If you’re a beginner who’d like to learn how to win with options, give Power E*Trade a close look.

As with other leading brokers, E*Trade charges a 65-cent-per-contract fee, which it lowers to 50 cents for active traders. Power E*Trade also comes with futures trading.

Along with Power E*Trade, the company has two other platforms, E*Trade Web and E*Trade Pro, which is designed specifically as a desktop application. All three platforms have free trading and an impressive dashboard where you can analyze, trade, and track seamlessly.

Pros
  • Great for learning options
  • Chart-driven dashboard on all three platforms
  • Solid educational resources
Cons:
  • $19.95 fee for mutual funds not on free list (free list has about 4,400 funds)
  • $75 fee to transfer all funds out of E*Trade

 

9. Fidelity

You probably know Fidelity Investments as a leader in mutual fund investing, but the firm has a growing brokerage arm that now offers commission-free trades.

Fidelity also has one of the best robo-advisors for more passive investors.

You can now trade stock and ETF shares commission free with Fidelity, but options contracts require a 65-cent-per-contract fee.

Fidelity excels with its market research and tax-advantaged retirement funds. And, of course, the firm’s mutual fund offerings are second to none.

Compared to other brokers, Fidelity’s website feels a little dated and cumbersome, but its apps are sleek enough.

You’ll get access to solid customer service, but if you make a broker-assisted trade, you’ll face a steep fee. As of this writing, Fidelity’s broker-assisted fee is $32.95 per trade.

Pros
  • Variety of securities
  • Great market research
  • Wide selection of mutual funds
Cons:
  • Non-invested cash hardly earns interest
  • High fees for broker-assisted trades
  • Average user experience on web site

 

10. Charles Schwab

Charles Schwab has been connecting clients with investment markets since 1971. With more than 12 million active investors, Schwab is an industry leader and a full-service broker.

Now, thanks in part to pressure from upstarts like Robinhood, you can invest commission-free on Schwab’s site.

Schwab’s performance resembles Robinhood’s, but with half a century of client service, Schwab has more to offer in the area of market research. Also, Schwab can usually offer a wider variety of securities — mutual funds, ETFs, and stock shares.

You’ll get free phone customer support 24 hours a day. If you really need help, Schwab has 300 offices around the country. (Expect to pay for this kind of customer support.)

The downside? Uninvested cash in your Schwab account will generate very little interest for you. Schwab will keep the vast majority of those earnings to pay for your commission-free trades.

This won’t matter so much if you don’t let your money sit uninvested, and since Schwab lets you invest in partial shares, keeping your money active should be easier.

Pros
  • Good app and desktop experience
  • Great variety of securities
  • Top-notch market research
  • Partial share investing available
Cons:
  • Miniscule earnings on non-invested cash

 

11. Robinhood

Robinhood lets you make an unlimited number of stock, ETF, and even option trades — all commission free. Now you can even make free crypto trades, too.

Free trading is as good as it sounds. It means you can invest even more of your money into your future.

You can set up a Robinhood account for free, and you won’t have to maintain a minimum balance in order to invest. And, most users like Robinhood’s customer service and mobile app even though you can’t get free help over the phone.

How does Robinhood offer so much free of charge to its nearly 6 million users?

Primarily by earning interest on uninvested cash in users’ accounts. Robinhood also has a paid upgrade, Robinhood Gold, for more advanced investors, which generates some revenue.

Robinhood’s business model has put pressure on other brokers to offer free trades.

Pros
Cons:
  • No retirement accounts such as Roth IRAs
  • No free phone customer service

 

12. Axos

Axos is an online banking system founded in 2000 and based in California. They appeal to a wide range of customers: the single person performing simple banking, a company working to grow, or a start-up needing a loan.

Their personal banking options are very attractive because they offer checking accounts with no late fees, rewards including cash back, and very high interest rates. With their Rewards Checking, you can grow your annual percentage yield (APY) up to 1.25%!

In short, Axos can provide a multitude of financial services for a wide range of customers.

Pros:
  • ATM fees will be fully reimbursed
  • 90,000+ ATMs across the United States
  • Fast access to accounts through the mobile app
  • Competitive loan (personal and business) and mortgage rates
Cons:
  • Only 3 physical locations (all three in California)

 

13. eToro

Founded in 2007, eToro is no new kid on the block. With tens of millions of users in over 140 countries, with the U.S. becoming one of those countries not long ago, eToro is a force when it comes to trading platforms.

The U.S. was limited to only trading cryptocurrency until this year. In 2022, they opened the U.S. market to trading stock and ETFs.

The platform offers the investor the ability to observe and learn from trading professionals, giving you the edge to help your portfolio grow.

Pros:
  • Communal aspect, information on how the pros trade
  • Mobile app
  • U.S. only promotions
Cons:
  •  Not available in all 50 states
  •  Limited to crypto, stocks, ETFs
  •  1% trade fee on cryptocurrencies

14. Acorns

Acorns is a great choice for any investor, but especially for the beginner. Banking and investing are done in one place and made easy through this easy-to-use app. Fee-free banking with no minimum and no late fees are great ways to save your money!

Investing in your retirement as well as starting an investment fund for your child is at your fingertips. A personal account costs $3/month, while the family account is $5/month.

Acorns offers fun programs like their “spare change” service. All of your purchases are rounded up from whichever account you link. Once the change accumulates $5, the money will be reinvested into an option.

Pros:
  • Beginner-friendly app
  • No account minimum
  • Competitive banking options
Cons:
  • Does not supply tax support
  • May have high fees on trading accounts with low balances

 

15. Vanguard

This platform is really an institution. Vanguard has been in business for almost five decades.

Their 0% trading fee may attract newcomers and day traders, but Vanguard is serving long-term investors and retirees most efficiently. They do not have an active trader platform.

Vanguard offers a wide range of in-house mutual funds and ETFs at super-low costs. This is just one advantage the user tap into. The prices drop even lower when you have more than $3,000 diversely invested in your portfolio.

Pros:
  • No trading fees
  • Educational guidance with long-term investment goals
  • Huge discounts on Vanguard mutual funds and ETFs
Cons:
  • No active trading platform
  • Starting an account and trading can take a little longer compared to other platforms

 

Discount Brokers vs Full-Service Brokers

Knowing which kind of broker to go with mainly depends on what kind of investor you are. Are you working full-time and raising a family? Or single with a pet fish? It all comes down to the amount of time you are able and willing to invest.

If you can keep an eye on the market and adjust your portfolio as needed, maybe a discount broker can help you due to the trading fees you could save. If you don’t have time to keep an eye on your investments, leaving your portfolio in the hands of a full-service broker may be the best option.

Discount Broker Fees

The main benefit of trading directly with a discount broker is the low commission fees. Other fees can vary from broker to broker, but with the discount brokers listed above, you should be easily able to open an account and trade certain stocks for free.

However, when mutual funds are purchased, you can usually expect a small transaction fee.

Frequently Asked Questions

How Do Discount Brokers Make Money?

Discount Brokers make money by trading in volume and raking a flat fee off of those trades. They aren’t as worried about the margins of the trade/fee comparison. They are able to entice traders with low/flat trade fees in order to build a huge client base.

Why do I need a broker?

Brokers have the authority to buy and sell securities on exchanges such as the New York Stock Exchange and Nasdaq. They are licensed to do business on your behalf. You’d need to become a broker to make trades directly with the markets.

Brokers can also offer advice to investors, but financial planners usually have a broader perspective.

How do I choose a broker?

The list above features my favorite options for discount (and now free) online brokers, but you can also work with a traditional broker in person if you’re good with paying the fees and commissions.

Make sure the broker you choose can give you access to the markets you want to invest in.

For example, if you’d like to focus on mutual funds, choose a broker with a wide variety of funds. Almost every broker on my list above meets this requirement.

How do I pay my broker?

Traditional brokers take commissions from your account balance and charge fees to access the markets. Of course, you’ll avoid these charges with free and discount online brokers.

Online brokers still make money, primarily by investing the money in your account that’s not currently tied up in securities. A broker may earn 2 percent on your non-invested money and pay you a fraction of that amount.

If this setup bothers you, look for an online broker offering fractional shares to limit your non-invested funds. Or, stick with a conventional fee- and commission-charging brokerage account.

What do commissions and fees pay for?

If you want to discuss with a broker on a regular basis, you’d still do best to go with a traditional client-broker relationship. Most free and discount online brokers offer customer service, but you’ll typically pay more for speaking with a broker.

Another option: Start a relationship with a financial planner who can help you see future needs while using a discount or online broker to carry out the trades free of commissions and fees.

Investing Step One: Just Get Started

When you’re new to investing or just thinking about the idea of investing, getting started — opening a free account with Robinhood or another leader on my list — seems like a challenge.

But opening an account, and then looking around its dashboard, and then transferring in some money to invest has a way of removing the mystery. Investing will begin to make more sense.

And once you start to see the power of your money making money while you think about something else, you’ll be motivated to learn and invest more.

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