|
You might be using an unsupported or outdated browser. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website. |
SCROLL TO SITE
Choosing the right online broker is one of the most challenging decisions you’ll make as an investor. With a long and growing list of available options, it can be daunting to find the broker that meets all your needs. Forbes Advisor spent six months testing 21 of the leading online brokers to identify the best of the best.
In our testing, we compared and contrasted more than 100 different features and variables for each online broker—from commissions and costs to customer service and investment offerings—to determine which trading platforms were the best for different types of users. We dug deep to assess the broad selection of tools and trading features offered by each platform, details that have become even more important for choosing an online broker now that the race to zero stock commissions is all but over.
$0
for stocks, ETFs, options
$0
TD Ameritrade is a highly versatile online broker that shines in many areas, from education and research to its platform and technology. All of this make it to be the best choice for new investors who are learning the ropes.
The platform’s extensive educational resources include the free TD Ameritrade Network streaming video platform, in-person workshops, plus well-crafted online courses, articles, videos and webcasts.
Rich Educational Resources
TD Ameritrade’s courses feature progress tracking and gamified elements, rewarding progress with points and badges. Topics include more advanced subject matter like technical analysis, income investing and options trading.
Given the vast quantity of educational resources that are available, it’s helpful that TD Ameritrade provides the ability to filter the subject matter according to your level of knowledge (beginner, intermediate and advanced) and by the type of media (articles, videos, webcasts, courses or events).
TD Ameritrade also provides news and third-party research from Thomson Reuters, Dow Jones and Credit Suisse. Clients can receive a dose of daily inspiration from the firm’s Market Java email. Sent out before the market opens, it provides updates on pre-market conditions, major stock moves and analyst insights.
Novice investors inevitably have questions beyond the scope of FAQs and chatbot capabilities. To help answer these queries, TD Ameritrade offers customer service that was sound in our tests, with reliable phone support, a message center and live chat available 24/7.
It is always a good idea to first test trading ideas in a virtual environment. The paperMoney trading simulator allows beginners to get their feet wet without risking any real money. Users can test strategies with live market data across multiple markets.
$0
for stocks, ETFs, options
Interactive Brokers is a long-time favorite among active traders and investing professionals thanks to its rock-bottom commissions and fees, staggering range of tradable products, and powerful platform and tools.
Low Fees, Extensive Market Access
Commissions and fees are sensitive issues for active traders. With $0 commissions the new norm among discount brokers, identifying the players that offer the best value is more challenging. Interactive Brokers’ commissions and fees are very low across the board, and one area where it continues to stand out is in margin interest rates, where the firm undercuts rivals by more than a few percentage points.
Access to global markets is another key strength at this broker. Whether you want to day trade equities on the Hong Kong stock exchange or speculate in futures options on the Mexican Derivatives Exchange, Interactive Brokers makes it possible. A total of 135 markets in 33 countries are available for trading.
Interactive Brokers’ Trader Workstation (TWS) desktop platform offers Level II market data, advanced charting, technical analysis tools, scanners, alerts and Bloomberg TV streaming. Popular features among professional day traders, such as “hot keys,” are also available.
$0
for stocks, ETFs, options
$0
Besides offering the best trading platform for beginners, TD Ameritrade’s thinkorswim mobile app is outstanding. All of the strengths of this online broker’s educational and research offerings, products and technology carry over to it, though the more basic TD Ameritrade app is also available, which may appeal to beginners.
The thinkorswim mobile app allows you to trade stocks, options, futures and forex. All of your settings and preferences from the thinkorswim desktop platform can be accessed on the mobile app. This means your chart drawings and market scans can be synced up to any mobile device.
Extensive Features on Mobile
The well-designed app makes it easy to find your way around the numerous features. Customer support is literally close at hand via mobile. You can chat live with a trading specialist and even share your screen without leaving the app.
News and insights via live streaming video from the TD Ameritrade Network and CNBC are available via mobile. The app even has chat rooms built into it, so you can talk trading with your peers.
Mobile traders can take advantage of advanced order types such as trailing stops and OCOs (One Cancels Other). Risk-free paper trading is also possible on mobile using the virtual paperMoney account.
$0
for stocks, ETFs, options
$0
$0
for stocks, ETFs, options
$0
Tastyworks was created by options trading professionals, and it shows in the creative innovations in the platform. This user-centric broker combines low commissions, cutting-edge technology and unique resources to help you come up with options trading ideas.
Tastyworks offers competitive pricing and fees, including commissions on equity option trades that are capped at $10 per leg. It also offers commission-free trading in stocks and ETFs and one of the lowest commission rates for futures in our survey.
Options Trading Made Easy
The user experience of the Tastyworks platform is superb on desktop and mobile devices. The trading platform offers conveniences such as the quick roll feature, which allows you to roll your option position into the next expiration cycle with a simple right click.
The Follow Feed feature enables you to see the trades taken by a group of experienced traders, helping you to keep ideas flowing. You can tailor who you follow in the feed based on your interests. You can even follow the trading activity of founder Tom Sosnoff, who was a floor trader at the Chicago Board Options Exchange (CBOE) early in his career.
While testing the quality of customer service at Tastyworks, it was a pleasant surprise to receive replies from Nick Battista, better known as the co-host of the Bat vs. Bat show on the Tastytrade network.
$0
for stocks, ETFs, options
$0
$0
for stocks, ETFs, options
$0
Fidelity is our pick for best overall online broker. It stands out as an excellent, well-rounded platform that’s a great choice for active traders, long-term investors or people who are new to investing.
Fidelity provides high-quality trade execution while keeping costs minimal. It has the rare distinction of being a broker that offers commission-free stock, ETF and option trading while not selling order flow. An average of 85% of orders are executed at a better price than the National Best Bid and Offer (NBBO), with an average execution speed of 0.07 seconds.
At other brokers, selling order flow helps compensate for revenue lost by offering commission free trades but often results in compromised execution quality.
Low Fees, Great Investing Options
Fees are impressively low at Fidelity. For example, it is the only broker in our survey that does not charge an outgoing wire fee—a small detail indicative of its overall approach.
Fidelity is an established leader in the mutual funds industry, with 70 years of experience. Underscoring its commitment to value and low costs, it introduced zero expense ratio index funds in 2018. These funds have no minimum purchase thresholds and no fees for retail brokerage account holders.
An early adopter of new investing products, Fidelity provides fractional share trading for over 7,000 U.S. stocks and ETFs. Rival Charles Schwab only provides fractional shares for S&P 500 stocks. Fidelity also distinguishes itself in the area of international stock trading, offering access to the markets of 25 countries.
Research offerings are broad, with reports from multiple independent providers, including Zacks and Argus. Tools such as the Fidelity stock screener, stock research dashboard and the robust Active Trader Pro platform help users identify attractive investment opportunities.
$0
for stocks, ETFs, options
$0
$0
for stocks, ETFs, options
$0
Charles Schwab was a close contender for first place in several of our categories. Ultimately, its reliable and competent representatives earned it the top spot for customer service.
The Charles Schwab website is easy to navigate, and support features are displayed front and center, rather than tucked away in an obscure corner as is the case with many brokers.
Rapid Responses by Competent Professionals
In our tests, phone inquiries were resolved within minutes. Schwab’s chat support with a human operator answered almost immediately, a rare luxury. Representatives are knowledgeable, licensed professionals. They typically hold a Series 7; some hold multiple licenses.
In addition, for individuals who prefer the one-on-one experience with a consultant, Schwab offers an extensive branch network across the United States.
For this survey we spent six months thoroughly testing 21 of the leading U.S. online trading platforms. We tested the products side by side, across six major categories, assessed over 100 features and variables, and collected thousands of separate data points. The six categories we tested were commissions and fees, platform and technology, range of product offerings, research and education, account security and customer service.
Categories were weighted by their relative importance for the best broker overall, best for beginners and best for active traders. Testing was led by a seasoned market professional with over 20 years of experience in the markets, both as a broker and a retail investor. We opened accounts at each of the 20 brokers in our survey to perform hands-on, granular testing of their platform and services.
In looking for an online broker, you should consider whether they match your investing profile and cater to your objectives. Pay attention to the commissions and fees they charge, especially those related to the investing products that you will be using the most.
Carefully consider the platform and technology offered by the broker. Make sure the tools it offers fit your investing style. Do you need a simple, easy-to-use platform for a few long-term investments, or are you looking for a one that offers the tools to optimize your chances of success in the fast-paced world of active trading?
A good broker is much more than a venue to execute trades. Look for a broker that can assist your decision-making and development as an investor with quality research and educational materials. Also, consider how much customer support you feel comfortable having access to. Some brokers have live agents available 24/7 by chat and phone while others only offer support via email.
Finally, keep an eye out for promotions and bonuses—many leading brokers offer account bonuses based on the size of your initial deposit. For large deposits these can range from hundreds into thousands of dollars.
An online brokerage account is a portfolio of cash and securities on an online trading platform. Investors can use online brokers instead of conventional financial advisors to buy and sell stocks, bonds, mutual funds, ETFs, options and other assets.
Some online brokerage firms have account minimums that range from several hundred to several thousand dollars. However, the top online brokers that we’ve listed here allow users to open an account with no minimum balance required.
To open an online brokerage account, all you have to do is visit a broker’s website. Each firm has its own account opening process, which can be completed completely online—though you may need to upload certain documents, such as a photo of a driver’s license. Once you create an account, you can fund your account by transferring money directly from your bank account via an ACH or wire transfer.
What kind of online brokerage account you should open depends on your financial goals. For example, if your goal is to save for retirement, you should consider a tax-advantaged account like an individual retirement account (IRA). However, if you’re investing money that you plan to use before retirement age, then you might opt for a taxable brokerage account. These accounts can still be used to invest for retirement as well as goals you’d like to reach before then.
If you’re an experienced investor and you want to actively trade the markets, you might consider opening a margin account instead of a cash account. Margin accounts let you invest more than you actually deposit into your account by using leverage, or borrowed money. If you trade using this money, a process called margin trading, you may magnify any losses you incur. So if you’re relatively new to investing and don’t plan to monitor your account regularly, it’s typically best to stick with a cash account.
Securities regulators require all brokerage firms to know their clients—even online brokers. To open an account, then, you’ll need to provide information so the firm knows who you are and how much experience you have investing.
In addition to your name, date of birth, mailing address and Social Security number, you may need to provide:
A paper trading account is a mock investment account that allows users to pick investments without risking any real money. The account tracks the overall market and lets users see how their investments would have performed had they actually invested.
Dan Blystone has over a decade of experience in the trading industry. He started as a floor clerk at the Chicago Mercantile Exchange (CME) in the currency futures pits. Then progressed to working as a proprietary trader off the floor trading the bund overnight. Later, Dan worked as a retail futures broker. He founded TradersLog.com, which has received tens of millions of page views to date. Dan worked with many leading industry experts on creating educational webinars and archiving them on their YouTube channel.
Ben is the Retirement and Investing Editor for Forbes Advisor. With two decades of business and finance journalism experience, Ben has covered breaking market news, written on equity markets for Investopedia, and edited personal finance content for Bankrate and LendingTree.