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12 Best Online Brokers for Stock Trading in 2020

Best Online Brokers

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Online brokers are definitely here to stay. And they have effectively disrupted the trading industry (and retail trading for that matter) by introducing low-fee services, user-friendly trading platforms, and a high number of available securities to trade.

However, there are so many alternatives when it comes to picking an online broker if you live in the US that you may feel a bit overwhelmed as you browse through the lists of features they offer, their pricing, and other key characteristics. This article will help you choose the best online broker for you.

App

Best For

Best Overall

Beginner Investors

Millennial Investors

ETF Portfolios

Bonds and Mutual Funds

Fractional Shares

Active Traders

International Investors

Options Trading

Index Funds

Trading Platform

Social Trading

Best Online Brokers of 2020

Given the importance of selecting the broker that suits your particular needs best, we have curated this list of the 12 best online brokers which you can use to short-list candidates before you make a final decision.

TD Ameritrade

TD Ameritrade is an online broker with almost 50 years in the trading industry, currently offering its services to roughly 12 million clients in the United States and holding more than $1T in assets from its investors.

Fees and Pricing

Similar to other providers, TD Ameritrade has also slashed its commissions for stocks and ETFs to zero, although they still charge fees for trading other instruments like bonds, mutual funds, and Forex pairs.

For mutual funds, TD charges around $50 per each $2,000 invested, while corporate bonds can be traded for as little as $1 per bond with a minimum of $10 per transaction. 

Trading options with this provider generates a $0.65 commission per contract, while trading futures costs around $2.25 per contract. 

TD Ameritrade does not charge any deposit or withdrawal fees for US-based clients. However, non-US clients have to pay a $25 fee per withdrawal if they have an international bank account.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+$0.65 per contract)
  • Promotion: None at this time

Webull

Webull is an online broker that was founded in 2017 (making it one of the youngest candidates on our list). It provides retail traders with cutting-edge technology for their trading activities, along with an inexpensive trading service that features real-time quotes and full extended hours, meaning users have access to pre-market and after-hours action. 

Fees and Pricing

WeBull offers zero-commission trades for US-listed stocks, ETFs, and options, similar to what other online brokers offer. 

That said, the firm still charges the regulatory fees applicable to each trade, including those mandated by the SEC, FINRA, and clearing houses — which are almost imperceptible. 

On the other hand, Webull offers marginable trades that amount to 4 times the account’s balance for day trading and 2 times the account’s balance for overnight trading. A minimum amount of $2,000 is required to be eligible for a margin account.

Margin rates start at 6.99% for accounts with less than $25,000 and progressively go down to 3.99% for accounts with a balance higher than $3 million.

Other fees charged by Webull include a $25 withdrawal fee for US-based accounts and a $45 withdrawal fee for international accounts. Additionally, deposits made via wire transfer are charged an $8 fee per deposit for US bank accounts, and $12.5 for non-US accounts.

What Do We Like About It?

Webull’s trading platform is probably the firm’s strongest suit, and it was conceived to serve both amateur and experienced traders. 

The platform offers 45 different technical indicators along with an intuitive search function. It also provides fundamental data on the different securities available to trade. 

Another positive feature is the stock screener, which can be applied not just to US-listed stocks, but also to securities listed in various other exchanges around the world.

The trading interface of the web-based version is highly customizable, and WeBull’s mobile trading app is possibly one of the best in the industry, as it includes a significant number of features that other mobile trading apps have failed to incorporate.

You can read our full Webull review for more details.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading
  • Promotion: 2 free stocks

Robinhood

Launched in 2015, Robinhood is a growing online broker that currently serves more than 13 million users by providing zero-commission trades for traders in the United States.

The firm’s founders, Vladimir Tenev and Baiju Bhatt, aim to democratize access to the financial markets by introducing inexpensive trading services. It should be noted that this broker has seen significant growth in its user base during 2020 following the pandemic retail trading boom.

Robinhood currently offers US-listed stocks, ETFs, options, and cryptocurrencies.

Fees and Pricing

Robinhood offers zero-commission trades for US-listed stocks, ETFs, options, and cryptocurrencies. while it also provides the possibility of owning fractional shares of certain companies whose stocks are considered high-priced.

For international shares, zero-commission trades are also available — but custodial fees may apply.

Robinhood does not charge any deposit or withdrawal fees for wires or ACH payments,  and they also offer a premium package called Robinhood Gold  (which is the equivalent of a margin account).

This package charges a monthly subscription fee of $5, and margin rates start at 5%. It provides access to in-depth research reports from Morningstar and Level II market data. 

What Do We Like About It?

Robinhood saw a popularity boost in 2020 as a result of a retail trading boom that occurred as individuals confined at home due to the pandemic found it interesting to trade in the stock market.

The firm’s competitive advantage is definitely its inexpensiveness, as Robinhood doesn’t charge any fees for trading stocks, options, or ETFs. They also waive certain non-trading fees like deposit or withdrawal fees, which other providers usually charge.

Additionally, Robinhood offers the possibility of trading cryptocurrencies like Bitcoin, Ethereum, and Dogecoin for free. 

What Do We Like About It?

TD Ameritrade’s long-standing reputation in the stock trading industry has made it one of the strongest players in the landscape, and virtually every single feature they offer is considered either decent or excellent for both amateur and experienced traders.

The research tools and technical features of its trading platform are highly sophisticated, and traders can enjoy a wide range of market orders that are quite useful for trading certain instruments.

The number of financial instruments available for trading is another positive aspect of this provider, as TD Ameritrade supports 75 different currency pairs, more than 2,300 ETFs, and individual stocks listed in 5 different stock markets.

Moreover, the platform covers 740 different fund providers, 40,000 bonds, 5 options markets, and 8 futures markets.

You can read our full Robinhood review for more details.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading 
  • Promotion: 1 free stock

M1 Finance

Although M1 Finance is best known as a robo-advisor, the firm also offers the possibility of conducting self-directed trading during certain times of the day, which is a positive feature for traders who want to get the best of both worlds.

Fees and Pricing

M1 Finance does not charge any fees for trading stocks, ETFs, or any other instruments by using their platform.

However, trade orders will only be executed at a certain time during the day, which helps the firm keep its management fees low. 

That said, M1 Finance also offers a premium package called Plus that costs $125 per year that entitles the user to place trades in two time windows per day instead of one.

What Do We Like About It?

M1 Finance offers investors the possibility of engaging in active trading, while they may also keep a part of their portfolio managed by the firm’s robo-advisor.

The trading window feature, although atypical, is not necessarily a bad thing if you are a long-term investor, and their inexpensive service probably makes up for this limitation. 

On the other hand, M1 Finance also offers a selection of more than 6,000 different stocks and ETFs — a portfolio that is probably large enough for most buy-and-hold investors.

You can read our full M1 Finance review for more details.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock and ETF trading
  • Promotion: None at this moment

Ally Self-Directed Investing

Ally’s Self-Directed Trading service is offered by Ally Invest, a unit of Ally Financial — a big bank holding company that manages more than $180B in assets for its clients.

The firm currently provides its self-directed trading services to more than 350,000 users, offering zero-commission trades for US-listed stocks and ETFs and low-fee options trading services.

Fees and Pricing

Ally does not charge a fee for trading US-listed stocks or ETFs. However, the firm does charge a $0.5 fee per contract for options and $1 per bond traded within the platform, with a minimum of $10 per trade.

A minimum deposit of $250 is required to open an account with this provider, although no minimum balance is required to maintain it. For margin accounts, a minimum deposit of $2,000 is required.

Margin rates start at 7.75% for accounts with a balance lower than $9,999 and go as low as 3.25% per year for accounts with a balance higher than $1 million.

What Do We Like About It?

Ally’s banking background makes it a solid online broker that you can safely entrust with your money. 

The firm’s proprietary trading system features a wide range of advanced functionalities, including 117 chart studies and 36 different drawing tools, along with a significant number of research tools like an ETF screener, specific graphs, and add-ons designed for options traders.

Unlike other providers, Ally also offers the alternative of trading Forex within its platform, and they’re currently offering 50 different currency pairs. Its system also supports MetaTrader 4, which is popular trading software used by sophisticated traders.

You can read our full Ally Invest review for more details.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+0.50 per contract)
  • Promotion: None at the moment

SoFi Active Investing

SoFi Active Investing is the self-directed trading solution of Social Finance Inc., a financial services firm founded in 2011 with over 1 million clients in the United States.

Similar to other providers, SoFi also offers the best of both worlds as it allows its users to either let the robo-advisor build their portfolio for them, or they can also engage in active trading through its platform, offering a selection of more than 2,000 ETFs and stocks listed in major US exchanges, including the NYSE, NASDAQ, and AMEX. 

Fees and Pricing

SoFi charges no trading fees on transactions made with US-listed stocks or ETFs. Cryptocurrencies can also be traded with a markup of 1.25% above their current market prices — which is a bit expensive.

On the other hand, the firm doesn’t charge any other fees aside from these, as no additional expenses are incurred when depositing or withdrawing money from the account.

What Do We Like About It?

SoFi offers several innovative features that other online brokers have progressively incorporated into their portfolio of products, like fractional shares, cryptocurrencies, and special rewards for signing up or referring a friend.

Additionally, SoFi has recently launched a series of proprietary ETFs including one that tracks a broad-market index— the S&P 500 – and charges no expense ratio (at least for now)  while others are designed with the millennial generation in mind.

One of them, the SoFi Gig Economy ETF (GIGE), tracks a basket of stocks in the so-called “gig economy” while the other — SoFi’s 50 (SFYF) — incorporates a selection of the 50 top stocks held by users within its platform.

These innovations make SoFi an interesting competitor that caters to the younger generation (such as Robinhood and Webull).

You can read our full SoFi Invest review for more details.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock and ETF trading
  • Promotion: None at the moment

E*Trade

Founded in 1982, E*Trade is one of the most well-reputed online brokers in the United States, currently providing its services to more than 5.2 million traders. 

The company was acquired by US investment bank Morgan Stanley in February 2020, a move that has provided a credibility boost for the firm while also raising expectations as to what may come next.

This broker only supports US-listed instruments, including stocks, ETFs, funds, bonds, options, and futures. No cryptocurrencies or Forex pairs can be traded through their platform.

Fees and Pricing

E*Trade provides free stock and ETF trading. Mutual funds can be traded for $19.99 per trade.

Moreover, US treasury bonds can be traded for free, while other bonds carry a $1 commission per bond. 

Options can be traded for $0.65 per contract, and futures can be traded for $1.5 per contract. These are referential fees that apply to stock indexes. The actual fees may vary depending on the instrument that is being traded.

Margin rates charged by this provider start at 8.95% for $10,000 or less, and are progressively reduced to 5.45% for account balances higher than $1 million.

Finally, outgoing withdrawals cost $25 when made via wire transfer. No fees are charged for deposits or withdrawals made via ACH.

What Do We Like About It?

The acquisition of E*Trade by Morgan Stanley generated a positive sentiment towards what may come next for the firm, as the investment bank may help introduce new insightful features like advanced research tools and deep-market analytics.

On the other hand, E*Trade already offers a user-friendly proprietary trading platform that is suitable for both amateur and experienced traders, currently incorporating a wide range of market reports from reputed sources, real-time fundamental data for US-listed companies, and a charting tool that features 29 different indicators.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+$0.65 per contract)
  • Promotion: None at this time

Interactive Brokers

Interactive Brokers is one of the biggest independent brokerage firms in the world, providing its services to more than 600,000 clients around the globe through a network of 24 offices located in 14 different countries.

This online broker provides traders with access to virtually all the financial markets in the world, which makes it a very interesting choice for traders who have a wide scope when it comes to the range of instruments they usually negotiate with.

Fees and Pricing

Interactive Brokers follows a tiered pricing structure,  which means that the cost of trading with them varies depending on the volume.

That said, the firm offers two packages — one is the IBKR Lite program, primarily designed for retail clients. This alternative allows the trader to enjoy zero-commission trades on US-listed ETFs and stocks.

On the other hand, the IBKR Pro — conceived for more sophisticated traders and investors — provides a tiered fee that goes down as trading volume goes up.

For other instruments like options and futures, fees start at $0.65 per contract for US-listed options and $0.85 for US-listed futures.

Fixed-income instruments like US-listed bonds can be traded at a cost of 0.1% of their face value with a minimum of $1 per order while mutual funds can be traded for $14.95 per trade.

Other non-trading fees include a $1 fee for withdrawals made via ACH and $10 for those made via wire transfer. 

Margin rates start at 2.59% per year for IBKR Lite accounts under $100,000, and the rate goes down to 1.59% for IBKR Pro accounts. The rates are progressively diminished to as little as 0.75% for IBKR Pro accounts with a balance higher than $3 million.

What Do We Like About It?

Interactive Brokers is a great alternative for advanced traders who would like to have access to a multitude of sophisticated trading instruments from multiple corners of the world. 

IB’s margin rates are probably the lowest available in the marketplace, which also makes it an attractive choice for individuals with large account balances who can save significant amounts of money by financing their trades with this provider.

Summary

  • Account Minimum: $0
  • Fees: Stocks and ETFs $0.005 per share (IBKR Pro), $0 (IBKR Lite) and $0.65 per options contract
  • Promotion: None at this time

TradeStation

TradeStation is an online broker owned by the Monex Group, a Japanese brokerage firm listed on the Tokyo Stock Exchange. The firm has been operating in the US since 1982, which makes it a long-standing player in the financial landscape.

TradeStation has many positive features, especially for buy-and-hold investors, although it is important to note that this provider primarily focuses on US-listed securities.

This provider currently offers access to US-listed instruments, including stocks, ETFs, options, futures, e-Mini futures, and cryptocurrencies.

Fees and Pricing

US-listed stocks and ETFs can be traded for free with this provider, while option trades cost $0.60 per contract for TS Select customers and $0.50 for TS Go clients.

Futures can also be traded with TradeStation for a $1.50 fee per contract for TS Select clients and $0.85 per contract for Premium.

A minimum deposit of $2,000 is required to open a TS Select account with this provider, while no minimum is required for TS Go accounts.

Mutual funds can be bought for $14.95 from a list of 50 leading fund providers, and bonds can be traded for $14.95 plus an additional $5 fee per bond.

Other fees charged by TradeStation include a $50 per year inactivity fee if the account falls below a $2,000 minimum balance; a $25 fee also applies to wires made to a US-based account. ACH withdrawals are free.

What Do We Like About It?

Although the portfolio of securities offered by this provider is fairly limited, the discount they offer on their trading fees if you sign up for a TS Go account is very interesting — especially for options traders.

Additionally, the firm offers the possibility of trading cryptocurrencies, which is an alternative that not all providers in this list have made available.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+$0.50 per contract)
  • Promotion: None at this time

Fidelity

Fidelity is one of the oldest and largest online brokers and asset managers in the United States, with a history of almost 75 years in the financial industry, and they currently hold more than $8T in assets for their clients.

Fidelity was rated as the Best Online Broker in 2020 by Barron’s and by Investor’s Business Daily, which points to the quality of the firm’s trading services and the positive perception they have among investors.

Fees and Pricing

US equity trades  (including stocks and ETFs) can be made for free, while trading options generate a commission of $0.65 per contract. 

Bonds can be traded with Fidelity for $1 per bond, and Fidelity’s own mutual funds can be traded for free. Third-party funds generate a trading fee of $49.95 per purchase.

Finally, this broker charges 8.325% per year for margin loans for accounts with less than $25,000, and the rate decreases to 4% for accounts with a balance higher than $1 million.

What Do We Like About It?

Fidelity offers a few things its competitors lack. First, they have a portfolio of zero-fee index funds (which is only available to Fidelity’s customers), and they offer fractional shares of more than 7,000 different stocks and ETFs.

In addition, their trading platform includes  software called Recognia®, which recognizes potential technical patterns and events.

Their platform also incorporates research from 20 different providers and a selection of 2-year back-tested options strategies, a feature that is very interesting for options traders.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+$0.65 per contract)
  • Promotion: None at this time

Charles Schwab

Charles Schwab is one of America’s biggest financial institutions and the third largest asset manager in the world, currently overseeing more than $6T in assets and serving a total of 28 million brokerage accounts after the successful acquisition of TD Ameritrade.

The firm was one of the first to introduce the discounted model in the brokerage world, and since then, it has revolutionized the industry by using technology to expedite and expand its trading services.

Schwab offers investors the possibility of engaging in active trading by providing access to an extensive portfolio of ETFs (including their own) along with both domestic and international stocks, futures, options, fixed income instruments, and mutual funds. 

Fees and Pricing

Schwab has joined the group of online brokers offering zero-commission trades for US-listed stocks and ETFs, although a commission may apply to foreign instruments.

Moreover, options and futures can also be traded with Schwab for as little as $0.65 and $1.5 per contract respectively.

The firm also offers a wide range of mutual funds — including their own, which can be traded for free — while third-party funds can be traded for $49.95 per trade.

Finally, fixed income instruments such as US treasury bonds can be traded for free, while other forms of fixed income will generate a trading fee of $1 per bond. 

Schwab charges a margin rate of 8.325% for accounts with a balance lower than $25,000, and the rate progressively decreases to 6.575% if the balance of the account is higher than $500,000.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+$0.65 per contract)
  • Promotion: None at this time

What Do We Like About It?

The research tools provided by Schwab’s platforms are significantly advanced. They include a newsfeed powered by major media outlets, market research reports from different providers, trading ideas, and detailed fundamental data on a large number of companies.

Additionally, Schwab has launched a wide range of ETFs and funds that cover different industries and track multiple broad-market indexes. For Schwab’s clients, these funds can be traded for free.

Finally, Schwab also recently launched a program called Stock Slices™ which allows investors to buy a fraction of a share of a company that trades at a high price.

Public

Public.com is an initiative that aims to democratize access to the US financial markets by allowing individuals to buy stocks for free through a mobile app the company has designed for its users.

Public Holdings Inc (the firm) is regulated by FINRA, the NFA, and the SIPC, and the company makes money off the margin rates it collects from short-sells and from directing their orders to clearing houses. 

Public only offers US-listed stocks and ETFs at the moment, and they support fractional shares.

Fees and Pricing

Public does not charge a commission for any of the trades made within their platform. 

The firm charges a $30 withdrawal fee for domestic wire transfers and $75 for transfers made via ACAT. 

Additionally, they charge $30 per trade commission for broker-assisted trades.

What Do We Like About It?

Public’s innovative approach is attempting to disrupt the way people trade stocks by introducing a low-cost operating structure that aims to crunch fees as much as possible for investors. 

Public also offers “themes” so you can invest in things you care about, like the environment, AI, self-driving vehicles, and much more.

Summary

  • Account Minimum: $0
  • Fees: Zero-commission stock and ETF trades
  • Promotion: None at this time

FAQ Best Online Brokers

These are the most frequently asked questions regarding the best online brokers.

Who Should Use an Online Broker?

Online brokers are the best option for individuals who want to engage in active trading. These services aim to provide real-time information, quotes, market data, charting tools, and other similar features to help traders in making informed decisions regarding the transactions they would like to make.

By using technology, online brokers have managed to cut the high fees that traditional brokers charged in the past, which is a benefit for retail traders. Now anyone can easily buy and sell instruments without having to worry about the expenses associated with each operation.

How to Choose the Best Online Broker 

The following is a brief list of the variables that you should analyze before picking an online broker to conduct your trades:

  • Fees – Although most online brokers have slashed their fees significantly, those cuts apply mostly to US-listed stocks, ETFs, and options. If you are going to trade other instruments, you should take a look at how much those trades cost.  Additionally, non-trading fees like inactivity fees and withdrawal fees can eat up a big portion of your returns, which is a good reason to review those as well before depositing your money with a particular provider.
  • Safety – Although all of the brokers within this list are adequately regulated by top-tier jurisdictions, make sure you feel comfortable with the degree of safeness that your brokerage firm provides you. That includes being regulated by top agencies like the SEC and having the proper safeguards in case they run into trouble.
  • Available instruments –  This is an important variable for advanced traders, as not all instruments are covered by all providers. For example, certain online brokers like Charles Schwab do not offer Forex trading, while others do not offer international stocks. Make sure you know what you can trade before you commit.
  • Trading platform – You will spend a considerable amount of time looking at your screen when trading, and that is the best reason for picking a broker whose trading interface is comfortable and intuitive. 
  • Research tools – Brokers tend to include extra features to help traders in making informed decisions. That includes a newsfeed, market research reports, fundamental data, charting tools, and other similar add-ons.
  • Educational tools – For most. trading is a lifetime endeavor,, and you’ll never stop learning. Your broker can assist you in this learning process by providing videos, guides, blogs, and other similar materials that you can read to enrich your knowledge and improve your trading skills. 
  • Customer service – The quality of your broker’s customer service can only be tested once you face an issue. However, you may find useful information online about how they have responded to other users to get a sense of what you can expect from them if you ever encounter a problem during your trading journey.

Can I Trade Internationally with Online Brokers?

Not all the brokers mentioned in this list offer the possibility of trading international stocks. If you would like to have access to certain markets located overseas, you should make sure your online broker provides you with that alternative.

Keep in mind that US-based brokers tend to charge extra fees for the custody of international stocks.

Final Thoughts

Online brokers have disrupted the trading industry for good. The former ways are likely to remain in the past, and that is good news for traders, especially as trading fees continue to be slashed as part of an industry-wide trend. 

If you are currently interested in taking the wheel of your financial portfolio, you should read this list carefully to pick the broker that will serve you in that process.  Pick wisely, but  keep in mind that you can always switch to another if you don’t feel things are going as you had expected.

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