The best online stock trading brokers can help investors of all skill and experience access the potentially lucrative returns that will be offered up by stock market investing in 2021 and beyond. Online stock trading is big business, with growing numbers of people taking charge of their investments from the comfort of their own homes.
And with competition among the very best online stock trading platforms intense too, it’s investors who stand to win out overall. Indeed, most of the top rated stock trading brokers have no minimum investment amount, making them accessible to all, and many also offer commission-free trades - there will, of course, be other fees to pay, but if you can keep your costs down, you’ll have more to invest.
If you’re coming to online stock trading for the first time it can be daunting, but this guide to the best online stock trading brokers is here to help. Only the most reputable stock trading platforms make the list, with their tools and services, investment options, customer service and support, and charges all taken into account in determining the top-rated broker overall. And knowing that people will be approaching from different places, we also highlight the online stock trading platforms that are best for novices, are more suited to experts, offer the most investment options, and more besides.
Importantly, you must always consider the risks that come with investing. Markets constantly rise and fall, and that means the value of your investments will go up and down too. There can be no guarantees that you’ll get back what you put in, but equally, investing offers the best opportunities to make the most of your money, particularly if you can leave your funds untouched for a number of years. If you’re new to investing, our advice would be to start small until you’ve got an appreciation of what’s involved.
Or maybe currency trading is another avenue you want to explore, in which case our rundown of the best forex brokers will be definitely worth a look too.
1. TD Ameritrade: Best for the beginner
TD Ameritrade has an abundance of features, plenty of cutting edge technology and research, and is constantly innovating and creating new tools. As a standalone stock trading platform, TD Ameritrade is also an excellent place for beginners to cut their investment teeth, thanks to the proliferation of research, guidance, tutorials, platforms and services that it has to offer.
While the platform has commission-free trading and free extras, it should be noted that the charge for the use of a broker will add to your costs. Assuming you take this into account, the platform can happily be enjoyed by traders of any level and expertise. However, it is perhaps the casual traders and novices who stand to gain most from TD Ameritrade, particularly in respect of the usability and accessibility that the platform has to offer.
- Read our TD Ameritrade review
2. E*Trade: Best for stability and reliability
E*Trade is a reliable online stock trading choice for investors who don’t like to take chances and would prefer to work with an established broker. Having been in the stock trading business for over 40 years, E*Trade certainly has the experience required to satisfy such requirements, and enjoys a excellent reputation to boot.
Its longevity has also allowed for the development of intelligent and relevant tools and services for its users. Wider ranges of investment options might be available elsewhere, but E*Trade is an expert in what it offers and willing to share this knowledge with newer and older investors alike via its highly informative and educational support material. The platforms and mobile applications are excellent too, all providing an excellent basis from which to help you get the most from your portfolio and develop investment and trading skills.
- Read our E*Trade review
3. Merrill Edge: Best for personal support
Merrill Edge’s relationship with the Bank of America is something of a double-edged sword. On the one hand, there's the potential for a less-than-straightforward pricing structure and perhaps fewer investment options than you could find elsewhere. But on the other hand, you get the comfort of knowing you're dealing with a steady and reliable provider, and perhaps most importantly, can access a level of personal support that only the largest financial institutions, with countless outlets across the US, can provide.
What is also in Merrill Edge's favor is a phenomenal research and knowledge center, perfect for those new to investing to learn the basics and get started, but also beholden of enough information to interest advanced investors and help them develop their strategies further. The user reviews of current investors are far above average for a stock trading broker too, suggesting you won't be disappointed in the service that you receive.
- Read our Merrill Edge review
4. Fidelity Investments: Best for family and future planning
Fidelity Investments stands out as a family-friendly, future-focused stock trading platform designed to help people better plan for what might lay ahead. To this end, Fidelity offers some diverse stock options and portfolios that can be used by people of all trading skill level to improve their finances and investments.
Better looking websites may be available elsewhere, but few can rival the wealth of digital offerings, research, tools and services that Fidelity have designed to make your life easier and your investments more efficient. Regular nationwide recognition for its customer service certainly shouldn't be overlooked either, making Fidelity a great broker to consider if you want to work with a company that can help customize your investments in line with your future plans.
- Read our Fidelity Investments review
5. TradeStation: Best for expert investors
TradeStation is a solid and dependable online stock trading platform with a rich history that spans more than 30 years. Nowhere is this better reflected than in its services and offerings, and the sophisticated approach that it takes to investing and trading. For this reason, TradeStation is a great choice for the more sophisticated investor, who more-than-likely knows what they are doing, but are perhaps on the look out for the next trading edge.
Unsurprisingly, the advanced tools and services are excellent, and there's an almost unrivaled knowledge hub from which to learn more about the techniques required to become the savviest of investors. The customer reviews are great and there's understandably an array of investment options on offer too. Given the tendency to cater more towards the expert trader, novices might find the website a little too much to cope with if you're just getting started. However, for the more experienced investor, there's everything you would hope for and probably more besides.
- Read our TradeStation review
6. Zacks Trade: Best for personalization
Zacks Trade offers all the stock trading investment options that any experienced investor is likely to require. The platforms are feature-rich, the research functions are in-depth and the investment tools are highly advanced, but perhaps what stands out most - particularly when considered against its rivals - is the option of free broker-assisted trading. The need to pay a minimum account fee and a number of smaller fees provides some balance, but it is a service that will undoubtedly appeal to some.
Elsewhere, Zacks Trade is renowned for good customer service – you can call during office hours or make use of the support center to manage your account seamlessly. That said, it is probably still a better option if you know what you're doing investment wise, but want the choice and tools capable of taking you to the next trading level.
- Read our Zacks Trade review
7. Interactive Brokers: Best for investment options
Interactive Brokers offers some of the most advanced stock trading tools and investment products on the market but has plenty to offer the novice investor too. As well as being one of the few brokers to offer fractional shares, there's the Robo Portfolios option if you're happy to entrust your stock selections to an algorithm, and the Probability Lab, aimed at helping those with a less than mathematical mind.
Traders of all levels will benefit from the technology, tools, and investment variety, while there are almost 50 educational courses on offer, should you want to further your knowledge. In terms of cost, Interactive Brokers is one of the most competitive online stock trading brokers around, and there's a trial option allowing you to check out the platform options for free.
- Read our Interactive Brokers review
What is an online stock trading broker?
A stock broker is a person or company that has the license to buy and sell stocks through the market exchanges. While stock trading was previously difficult for those short of time to have in-depth discussions with brokers or the money to pay for the associated investment costs, online stock trading has made investing the most accessible it has ever been and more affordable too. When choosing a stock broker, there are generally two choices:
A full service stock broker
These are the more traditional stock brokers that have physical offices. They offer a range of services beyond the ability to trade stocks on the exchange, such as retirement planning help, tax tips, and guidance on what stock to buy and sell.
An online stock broker
Online stock brokers provide the opportunity for a discounted experience of trading stocks on the market exchange. While online brokers don't usually offer the wide range of services typically available from traditional broker firms, the best online stock brokers might offer greater access to investment research and tools, and also educative material to help develop stock trading understanding and techniques.
How to buy stock online
Online stock trading companies make trading stock a very simple process. The first step is to set up an online brokerage account on the platform or website you are going to use to trade stocks. After your account has been set up, you trade stock by placing the stock’s ticker code into the platform. A ticker code is a one to five digits in length and is used to identify stocks. Most online stock traders will allow you to trade stock in two methods:
This type of stock order is immediate, and placed at the current market value. If you choose to buy ten shares, you’ll exchange shares with someone selling shares in the company. This type of stock exchange is filled quickly, and usually at an extra cost.
A limit order allows you to place a set amount on the trade of shares, so they’ll only be exchanged at the price you’ve set. These are ideal ways to buy stocks that are not often traded. It is also an easy way for a casual investor to manage their profile, as you can set the exchange as you would like and leave it untouched until it is filled.
Online stock broker platforms for beginners
When first learning how to buy and sell stocks on the market, it is usually best to look for a platform that will support beginners. A low commission price is essential for people just learning to exchange goods. Also look for a trader with a low minimum investment amount. This way, if you discover exchanging stocks is not the investment method for you, you can stop easily with minimum losses.
Practicing before trading for real is also a good idea, so find a stock trading broker that has a virtual stock simulator, allowing you to experience the ins and outs of trading without putting your money at risk. A wealth of educational material online is also a good indication that the stock broker is willing to support beginners and help you grow as an investor.
How to start online stock trading
Many novice stock traders worry they have neither the time, money or expertise to start investing. Don’t worry, there are many ways to invest that require only very basic knowledge and a relatively small amount of money. If you have $500, here are some ways to invest your money:
Exchange traded funds, or ETFs, are mutual or index funds that are traded like stocks. They have some benefits over direct investing in a mutual or index fund. For example, you only pay capital gains taxes if you trade your ETF shares. ETFs tend to have a solid rate of return, rather than the volatility of an individual stock. Many brokers also offer commission-free ETFs, so you don’t pay anything to buy the shares.
If you feel like taking more risk, buying into an actively managed index fund can give you a chance at higher returns. You can buy into some mutual funds with $500 or less. Keep in mind that you pay commissions and fees, so you may be better off with a passively managed fund, which has lower fees.
Robo-advisors are automatic investment programs that use algorithms to trade a portfolio based on your risk tolerance and investment goals - effectively, they are a hands-off way to manage your assets. Most robo-advisors don’t have minimum investments, but for those that do, $500 is enough to start an account. Most online stock trading brokers have their own robo-advisor offerings.
How do robo-advisors work?
A robo advisor will ask you a set of questions about your income, risk tolerance, and investment goals. Based on your answers, the robo-advisor uses an algorithm to suggest investments, create a diversified portfolio and manage it. Some of these automated stock trading platforms also rebalance your portfolio and use tax harvesting to lower your liability to the IRS.
Why use a robo-investor?
The advantages of a robo investor include:
Low Fee Stock Trading
The automated approach allows for a more competitive cost as all the work is done by software.
While they shouldn't, human stock brokers may feel pressured to sell a specific product to clients, maybe if they have certain financial deals in place with certain companies. A robo-investor will never act in it’s own best interest over yours.
Lower Minimum Investment
The minimum investment needed for a robo-investor is as low as $500. This means it is a lower commitment to invest than conventional financial advisors.
Robo-investors are always there when you need them, and you don’t have to wait on line listening to hold music to get the help you need.
What to look for in an online stock trading platform
There are a number of official and professional regulations that an online stock broker will belong to if they are to be considered safe and trustworthy. These include the Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority, with confirmation of membership normally easily found on any stock trading brokers website. If a broker is offering additional services such as a checking or savings accounts they should also be fully covered by the Federal Deposit Insurance Corporation (FDIC).