Top Brokers

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  • BINOMO
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Best Online Stock Brokers for Beginners of 2020

Ready to get started investing but not sure where to start? We’ve compiled a list of the top brokers we recommend for 2020.

Catering to both seasoned and new investors alike, there’s someone on this list for everyone. Whether it is customer service, affordability, or platform versatility, each of these brokers shines in its own way.

Be sure to compare the most important differentiators, such as trading costs and account minimums before you make your choice. As a beginner, you may also place more value on educational resources and customer support while you’re still learning the ropes.

Ally Invest

If you’re a seasoned investor, you may never have heard of Ally Invest, but its newness to the scene shouldn’t make you discredit it.

In 2020, Ally invest bought out TradeKing and has only recently emerged into the online brokerage game. That said, it’s quickly become very clear that everything that was great about TradeKing has only gotten better.

Ally offers automated portfolio management and forex trading. There is no account minimum, commissions on trades are $4.95.

Are you a frequent investor?

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Binary Options Broker 2020!
    Ideal for beginners!
    Free Demo Account + Free Trading Education!
    Get a Sign-up Bonus:

  • BINOMO
    BINOMO

    2nd place in the ranking!

Ally Invest offers discounts to members who trade 30 or more times per quarter. At that point, the fee drops down to $3.95.

Whether you use a PC or a smartphone, Ally has a great online trading platform for its users. Trade fast, get current, 24-hour quotes and data, make your own unique dashboard, and get a diverse set of trading tools at your disposal.

Here are some of our favorite helpful features:

  • Profit-and-loss calculator
  • Maxit Tax Manager, which informs you of any changes to your taxes based off of trades
  • Probability calculator to tell you of the likelihood of your desired targets for each share

Worried about trading from work? Don’t be. Ally Invest’s web platform doesn’t require you to download anything. Simply log in and you are ready to trade. Considering everything they offer online, this is quite an achievement in and of itself.

TD Ameritrade

TD Ameritrade is considered by many investors to be one of the best resources for both beginning and advanced investors.

It offers portfolio-building advice, has over a hundred commission-free exchange-traded funds (ETFs), and provides great trading platforms (mobile and PC) — all while not requiring an account minimum for its customers.

TD Ameritrade also has a program online for beginners called Web Platform which is extremely useful. Here newcomers can select their trading ‘skill level’ and their level of education, and TD Ameritrade will help the investor build a properly balanced portfolio, including:

If you like to do your own research before doing any kind of investing, TD Ameritrade also provides its investors with a lot of free resources. Customers can stream CNBC news for free, access market ‘heat’ maps and real-time trading quotes.

They can also communicate with a community of specialists that are available to chat in person or over the phone about investment options and ideas. Ameritrade is one of the few companies these days that offer this kind of service.

Part of its success comes from its ability to delegate. Every quarter TD Ameritrade relies on Morningstar, an independent investment research firm, to compile a list of mutual funds that offer no-transaction-fees.

This rather large list hits 45 investment categories and is given out exclusively to Ameritrade customers.

Merill Edge

Merill Edge is a great option for beginning investors. You can open an account with $0 minimum investment. They also offer excellent customer service, strong education and research, and low fees.

You can get unlimited free online stock, ETF, and options trades with their Preferred Rewards program, or pay just $2.95 per trade with no trade or balance minimums.

They offer flexible tools with customizable features and the best part is they are there to guide you step-by-step. They have dedicated advisors who will work with you one-on-one to help you build a comprehensive financial strategy.

Their advisors can give you recommendations based on your needs to help you grow and preserve your wealth. If you prefer to meet with them in person, they have over 2,000 Bank of America locations where an advisor will be more than happy to work with you.

Vanguard

Perhaps one of the best brokers for low-cost investing, Vanguard is frequently utilized by buy-and-hold and retirement investors with high account balances.

Its expense ratios on index funds and ETFs are quite below the national average, so it is the go-to broker for long-term investors.

Retirement-minded investors can find a lot of resources with Vanguard through its website. They list safe and healthy investment options that promise long-term growth, and it gives helpful hints on where you should prioritize your time and energy if you’re just getting started.

They also have a sophisticated program that can estimate when you’ll be able to retire and can help calculate your monthly expenses (sudden or otherwise) once you do.

If you have some money to invest, you can save by choosing Vanguard. For accounts with at least $50,000, trades only cost $7 regardless of how big they are. When the brokerage account hits $500,000, trades only cost $2. When it surpasses a million dollars, many trades become free.

Want to make active trades? Keep looking.

If you’re an active trader and don’t have nearly that amount of money laying around, however, Vanguard isn’t the best stock broker. It doesn’t have any software to support its traders (meaning there aren’t any trading tools or platforms to utilize).

Also, investors who frequently trade (say, more than 25 times a year) are penalized with fees (assuming, of course, they don’t have $1 million invested with Vanguard).

Robinhood

Robinhood is aptly named, offering commission-free stock and ETF trades.

Not just some of the time — all of the time.

On top of this, they don’t have an account minimum. If you want to get started trading, there’s no reason to wait. However, unlike Motif, Robinhood doesn’t offer fractional shares, so you’ll need to have enough disposable income to buy at least one share of stock or ETF.

Robinhood has a great mobile app team. It’s so good there’s no reason for you to ever hop on a PC. It takes five minutes to set up and only an hour for them to activate your account. Seem long? By industry standards, it is pretty darn fast. (Keep in mind this is a trading account, not a twitter account you’re setting up.)

When you transfer $1,000 to Robinhood, it is available immediately for you to invest. If you upgrade to Robinhood Instant (a free upgrade), any proceeds you make from selling stocks or ETFs can be immediately used to buy stocks or ETFs elsewhere.

Don’t like the hassle of transferring money back to your bank account or vice versa? You can set up your account so that money is transferred to and from automatically whenever you want.

Once a week, once every two weeks, and so on. For as many perks that Robinhood offers, this one is just the icing on the cake for many users.

Due to popular demand, some of its features do having a waiting list, such as Robinhood Instant. Sign up on day one so you can take advantage of this upgrade as soon as possible.

Scottrade

Online platforms are great, but what about talking with actual human beings? Scottrade has about 500 offices across the country where you can actually go inside and speak with a knowledgeable investor.

Don’t have the time for that? Talk with someone over the phone or chat with them online. They have a staggering 1,000+ consultants that work every day of the week, that you can speak with almost any time of day.

It actually offers such good customer service that another company is working on buying it out: TD Ameritrade. It’s not finalized yet, but when it happens, it could be good news for members.

Can you imagine the resources of TD Ameritrade coupled with the customer service of Scottrade? That said, Scottrade still has a lot of aces up its sleeve until the buyout happens. Let’s talk about them.

Like many of the stock brokers mentioned already, Scottrade does not have an account minimum. Commissions are only $6.95 a trade.

When you deposit $10,000 or more into a Scottrade account, you get fifty commission-free trades. Do the math. That’s a bit of money saved right there. Also, in June of 2020, Scottrade lowered its contract fee on options from $1.25 to only $0.70.

Scottrade also offers low mutual fund commissions. It only costs investors $17 to sell and buy no-load funds. For funds that charge a sales load, it only costs investors $17 to sell, whereas it is nothing to buy. How many of these transaction-fee-free funds do they offer, you ask?

A whopping 2,600.

Charles Schwab

There are only a few brokers out there where we can honestly say are well suited for both beginning and advanced investors, but Charles Schwab is one of them. It has the tools to satisfy anyone, no matter their level of expertise.

Are ETFs your thing? Charles Schwab offers over 200 commission-free ETFs. Are you an absolute beginner? Schwab objectively selects what it believes to be the best ETF in every category, so you don’t have to go down rabbit holes of information and research.

On top of this, if you are just starting to build your portfolio, Schwab also offers recommendations based on your chosen risk tolerance. Take the safe road and know that your money is in good hands.

If you need to speak with a representative, you may do so no matter the time of day, whether via phone or online chat. That said, Schwab actually has a pretty large brick and mortar presence, where you can make an appointment to speak with a representative or attend invaluable workshops.

A downside to Schwab is that they do have an account minimum. While many brokers we’ve discussed require no account minimums, Schwab does require that its investors maintain at least $1,000 with them. If you don’t have that, you can have the minimum waived when you sign up for an automatic monthly deposit of $100.

Fidelity

With low $4.95 commissions per trade, Fidelity is one of the most affordable brokers online, considering what it offers to its customers.

Utilizing top-notch research from over 20 companies, Fidelity provides its investors with some of the best investment advice that money can buy. It could be a lot of information to wade through, but after a few quick questions, Fidelity can match you up providers that resonate with your personal investment style.

Though it’s not considered the best customer support in the industry, Fidelity still offers some pretty sharp service for its customers. Investors can meet with representatives in physical branch locations, as well as attend investor seminars throughout the year for free.

The seminars cover a wide array of topics, such as social security and technical analysis. Plus, if in person doesn’t appeal to you, you can still study and expand your knowledge via webinars.

Looking for a solid online broker? Fidelity is truly among the best.

It offers both PC and mobile support, and if you are an active trader, you can even get real-time feeds displayed on your desktop. Each trading platform is intuitive and easy to use and provides tools to help you get a leg up on your competition.

For those interested, Fidelity also offers a premium tool called Wealth Lab Pro, which offers customizable strategies and 20 years of historical data.

The Biggest Stock Brokerage Firms in the U.S.

There are dozens of stock brokerage houses in the United States. But four major stand out because of their name, offerings, their total amount of client assets and the number of clients they serve. They are often referred to as the “big four brokerages.” Each of these firms, Charles Schwab, Fidelity Investments, E*TRADE, and TD Ameritrade, comprise the top in terms of customers and assets.

This short article outlines the products, services and fee structure of each brokerage. They are listed in no particular order.

Charles Schwab

Charles Schwab was founded in 1971 and is based in San Francisco. It is one of the leading investment brokerages and IRA custodian firms in the U.S.

As of Dec. 31, 2020, Charles Schwab held $3.25 trillion in client assets, with a total of 11.6 million active brokerage accounts. It also operates Schwab Bank, one of the largest banks in the United States, which allows its brokerage clients to link their trading accounts with a checking account. The company boasted 1.3 million active banking accounts as of the end of 2020. Schwab really shines with registered investment advisor (RIA) accounts, where $1.5 trillion of AUM sits.

The firm offers clients a series of investment products including stocks, mutual funds, exchange-traded funds (ETFs), money market funds, fixed income products, options and futures, insurance and annuities. Clients can invest in both Schwab’s proprietary products and other third-party investments.

Schwab, the country’s first real discount brokerage, has consistently been rated one of the cheapest brokerage firms in the United States. Trade commissions are $4.95 per trade for standard online and option trades, while options contract cost 65 cents each. The asset-weighted average operating expense ratio (OER) for actively-managed mutual fund fees is 0.69% and 0.03% for passively-managed ones. Schwab takes a 0.80% commission for private clients for its annual portfolio management fees.

The firm also offers clients a worry-free, passive approach to investing through its robo-advisor service called Intelligent Portfolios. The online platform provides clients with an automated experience, giving them access to a series of ETFs that rebalances as per the client’s investment goals. The service requires a minimum $5,000 investment and comes with no advisory or commission fees.

Fidelity Investments

Fidelity Investments is the nation’s largest keeper of 401(k) retirement savings plans and the largest provider of 403(b) plans for nonprofits. Founded in 1946 as Fidelity Management & Research, the company is based in Boston.

According to the company’s website, it had a total of $7.4 trillion in customer assets by Sept. 30, 2020, with an active 27.2 million brokerage accounts. The company also boasted 28 million individual investors and more than 590,000 commissionable traders per day.

Fidelity is the best choice for brokerage clients who also want to invest in Fidelity ETFs and mutual funds. The firm also offers investments in third-party products. Fees range from $4.95 per stock or options trades and 65 cents per contract on options. Clients who trade Fidelity or iShares ETFs are not charged a fee. But all other ETF trades are charged $4.95 per trade. Fidelity does not charge an expense ratio fee for certain proprietary mutual funds.

Portfolio advisory service fees range from 0.50% to 1.50% based on the amount invested. Minimum investments range from $50,000 to $200,000 based on the investment options. For its automated Fidelity Go service, the firm charges a 0.35% advisory fee but requires no account minimum to open an account.

Through its mutual funds and other advisory services, Fidelity has tens of millions of non-brokerage customers, something the others cannot claim.

E*TRADE

Founded in Palo Alto in 1982, E*TRADE began as a holding company and has transformed into a leading online discount brokerage service. The company was hit hard during the 2007-2008 financial crisis because of high exposure to subprime mortgage portfolios. Its stock dropped 86.7% in 2007 before the company implemented a “comprehensive turnaround plan.”

The turnaround worked, and E*TRADE has become a leading financial firm for its mobile accessibility, online trading tools, and a customizable user experience.

As of Q4 2020, E*TRADE had $414 billion in total customer assets with 4.9 million active brokerage accounts.

Just like the other main brokerages, E*TRADE offers its clients access to ETFs, mutual funds, stocks, options, and fixed income products. The firm also offers two checking accounts and mortgages. Clients can also choose a prebuilt portfolio, which gives them a diversified portfolio of mutual funds or ETFs built by an investment strategy team.

E*TRADE’s fee structure is a little higher than Schwab and Fidelity. Stock option and ETF trades are charged $6.95 each, while options contracts are charged 75 cents each. Those figures are reduced to $4.95 and 50 cents for active traders. Active traders are those who make 30 or more trades per quarter.

TD Ameritrade

TD Ameritrade was founded in 1971 and is headquartered in Omaha, Nebraska. The firm became TD Ameritrade after the old Ameritrade acquired TD Waterhouse USA from TD Bank Financial Group. It acquired St. Louis-based rival Scottrade in 2020. Client accounts were fully merged and integrated into the TD Ameritrade system by February 2020.

TD Ameritrade is considered one of the top brokerage firms in the United States because of its value and quality of service. The firm provides clients with a 24/7 customer support system, a user-friendly website with mobile access, research, and advanced trading tools.

According to the company website, TD Ameritrade has more than $1 trillion in customer assets. Furthermore, it boasts more than 11 million client accounts which place about 500,000 trades per day.

Investment products range from stocks, ETFs, mutual funds options and fixed income. Clients can also choose to invest in futures and forex currency.

TD Ameritrade does not require an account minimum, charges no platform fees and requires no trade minimums. It charges a flat $6.95 per trade online for equities and ETFs. For options traded online, customers are charged $6.95 plus an additional 75 cents per contract.

11 Best Online Brokers for Stock Trading of April 2020

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Want to trade stocks? You’re going to need an online broker, and that broker should offer a reasonable investment minimum, high-quality trading tools, robust access to customer service and no hidden account fees. On these measures, the brokerage firms below earned their place on our list of the best online brokers for stock trading.

We evaluated brokerage firms and investment companies on the services that matter most to different types of investors. For example, for active traders, we’ve noted online brokers with low or no commissions and robust mobile trading platforms. For people venturing into investing for the first time, we’ve included the best online brokers for educational resources (including webinars, video tutorials and in-person seminars) and on-call chat or phone support.

Read on to see our picks for the best brokers, alongside links to our investing experts’ in-depth reviews on each.

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Best Binary Options Broker 2020!
    Ideal for beginners!
    Free Demo Account + Free Trading Education!
    Get a Sign-up Bonus:

  • BINOMO
    BINOMO

    2nd place in the ranking!

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