Best Online Stock Brokers In December 2023 | Bankrate (2024)

Stocks are one of the best long-term investments you can make to build wealth, and it’s never been easier to buy stocks online. But what’s the best online broker for stock trading? That depends on the type of investor you are and the features you need the most.

Bankrate analyzed the major players to help you find the best online brokers for stocks. Here are our top picks.

The best online brokers for stocks in 2023:

• Charles Schwab
• Fidelity Investments
• TD Ameritrade
• Robinhood
• E-Trade
• Interactive Brokers
• Merrill Edge
• Ally Invest

• Bankrate evaluates brokers based on a number of factors including:

  • Cost (commissions, account fees, etc.)
  • Account types
  • Investment offerings
  • Research and education
  • Customer support

The top online brokers for stocks in December 2023

An online broker is a financial institution that allows you to purchase securities, including stocks, through an online platform. Online brokers are sometimes referred to as discount brokers because they offer a considerable discount to what the typical full-service brokerage firm charges.

With an online broker, you won’t get the same financial advice or investment recommendations that full-service brokers typically provide, but you will get commission-free trading and access to a number of other services and products depending on which broker you choose. Choosing an online broker makes sense for most investors.

What to consider when choosing a broker

The best online stock trading websites offer investor-friendly features and fees traders can easily justify. To come up with the list of firms consumers should consider this year, we considered the following factors:

• Price: When it comes to fees, you’re in luck — fees have been dropping swiftly as most online brokers have slashed their trading commissions on stocks and ETFs to $0. For this list of best online trading sites, we considered fees and trading costs to see how they stack up.
• Broker resources: You’ll also want to consider factors like research tools, the quality of the digital trading app, and the ability to place trades quickly and reliably, among other details.
• Strategy: The account you really want will ultimately come down to your personal investment strategy — including how frequently you plan to trade and whether you’re a beginner or are more experienced. We considered how each investing platform tailored its offerings to a different type of consumer.

Charles Schwab

Charles Schwab has a long pedigree of helping individual investors, and that tradition remains firmly intact. The company was ranked by J.D. Power from 2016-18 as “Highest in Investor Satisfaction with Full Service Brokerage Firms, Three Years in a Row.” For the 2020 survey, Schwab ranked top among do-it-yourself investors, but it fell to second in the 2021 and 2022 rankings.

Why we like them:

• Great trading tools
• Excellent customer support
• Wide range of research and educational materials, all with no commission
• Innovative customer service policy that says clients can get refunds on related commissions, a transaction fee, or an advisory program if they feel dissatisfied.

Who are they best for? From novice investors to seasoned pros, Schwab is an overall good choice for those who want to go at it themselves and have professionals on call just in case.

Pricing: Schwab meets the industry standard on stock and ETF commissions – zero – which it helped usher in. Options trades, though, still ring up a $0.65 per-contract fee.

Read more in Bankrate’s full review of Charles Schwab.

Fidelity Investments

Whether you’re looking for a great trading platform, low commissions or helpful customer support, Fidelity will do right by you. This broker does it all well, and it’s one of the easiest to use, especially if you’re just starting out, but works well for advanced investors, too.

Why we like them:

• Fidelity has a strong reputation for offering some of the best research and tools for investors planning for retirement. The information available on its platform — which includes sophisticated screening tools — makes the account a good option for investors who want to dig in.
• Bolstering its reputation further is the fact that Fidelity secured the top spot in Investor’s Business Daily’s 2022 investor survey, which polled the customers who actually use their services.
• Fidelity also has zero fees on many other services that other brokers routinely charge for.

Who are they best for? Investors just starting out can benefit well from Fidelity’s wide range of easily digestible educational tools.

Pricing: Along with most of the industry, Fidelity charges no commissions on stock and ETF trades, a boon to all traders, but especially long-term buy-and-hold investors.

Read more in Bankrate’s full review of Fidelity.

TD Ameritrade

TD Ameritrade is a great choice for investors of all abilities, whether you need guidance and education as you’re starting out or when you’re ready to turn to the broker’s high-powered thinkorswim trading platform. Either way, you’ll likely find what you need at TD Ameritrade. (Charles Schwab has purchased TD Ameritrade, and will eventually integrate the two brokers.)

Why we like them:

• Gives you access to a library of educational content that includes videos, webcasts and thousands of articles.
• You can trade a range of securities beyond stocks. Bonds, options, and futures are available, and you can trade cryptocurrency via futures. You can do it all via the broker’s mobile app, too.
• With no account minimums, TD Ameritrade’s an attractive option for beginners.

Who are they best for? Investors who want to get a little more into the weeds with their trading can benefit from the highly capable trading platforms and resources the broker offers.

Pricing: TD Ameritrade charges no commissions for its stock and ETF trades, and options cost $0.65 per contract.

Read more in Bankrate’s full review of TD Ameritrade.

Robinhood

Robinhood is a relative newcomer, but the online brokerage has made a quick splash, developing millions of devoted followers for its commission-free trading and user-friendly mobile app.

Why we like them:

• You’ll get no-fee trading on stocks and ETFs as well as options and cryptocurrencies.
• It also has a debit card that allows you to invest as you spend and gives you access to thousands of fee-free ATMs.
• You can join their premium tier, Robinhood Gold, for $5 a month and gain access to some research and discounted margin trading.

One downside: Robinhood offers only individual taxable accounts and traditional and Roth IRAs.

Who are they best for? Robinhood is a great platform for investors who are getting started and want to trade quickly and without too much hassle.

Pricing: Not only does the fintech company offer zero-fee stock and ETF trading, it is aggressively striving to disrupt the industry and become a platform that offers all kinds of financial products and services, including options and cryptocurrency.

Read more in Bankrate’s full review of Robinhood.

E-Trade

E-Trade provides a solid option, regardless of what type of investor you are — passive or active, novice or expert. And it has a great educational section, offering not only a library of educational tools, but a merry-go-round of webinars, news clips and educational videos aimed at investors of all levels.

Why we like them:

• You can also check in with E-Trade analysts for up-to-date analysis and commentary that can help you craft your trading strategy.
• E-Trade offers 24/7 phone support and an online chat option.
• Active traders may appreciate the broker’s flagship trading platform, Power E-Trade, which offers tons of tools and comes in a mobile version, too.

Who are they best for? If you are looking to trade often, E-Trade’s discounts on volume options trading are a huge benefit.

Pricing: Like other major brokers, E-Trade charges zero commissions for stock and ETF trades and $0.65 per options contract. Traders can receive a discounted commission of $0.50 per contract if they make 30 or more trades each quarter.

Read more in Bankrate’s full review of E-Trade.

Interactive Brokers

Interactive Brokers has long been known as a brokerage for professionals and active investors, with a powerful trading platform and good trade execution.

Why we like them:

• It’s taken strides in recent years to become more attractive to newer investors, in particular with a “lite” version of its service that has no-fee trading.
• It’s also upped its game on customer support and basic research.
• That shift has taken the rougher edges off a formerly no-frills service that even the pros thought was stripped down in favor of low costs and trade execution.
• A newly designed customer support page is easier to navigate while still providing the old page’s high level of functionality.

Who are they best for? Investors who might already know a thing or two and want to further their investment game.

Pricing: Interactive Brokers really kicked off the industry’s shift to no-fee stock trading. Its Lite service charges no commissions for stocks and ETFs, while its Pro service charges a $1 per trade for up to 200 shares, with subsequent shares costing a half-penny each, though volume pricing is also available. Options cost $0.65 per contract, and volume-based pricing is available here too for truly active traders.

Read more in Bankrate’s full review of Interactive Brokers.

Merrill Edge

Merrill Edge is a full-service broker that offers high-quality tools for traders while still catering to investors looking to get started. That’s especially evident when you consider that the broker has more than 2,000 locations inside parent Bank of America’s branches, making human advisors easily accessible, a particularly valuable feature for newer investors needing a guiding hand.

Why we like them:

• If you become a preferred client of the broker, you’ll receive access to detailed research reports on individual stocks, but you can receive research from Morningstar and Lipper, too.
• Merrill also does well with educational materials, helping you plan your financial future.
• Customer support is available 24 hours a day throughout the week, so someone is always on hand to help you out.

Who are they best for? Investors of all levels can benefit from Merrill’s wide range of resources and on-hand customer service support.

Pricing: Merrill Edge charges no fees for stock and ETF trades, while options trades come in at $0.65 per contract, right in line with most of the industry.

Read more in Bankrate’s full review of Merrill Edge.

Ally Invest

Ally Invest has a lot that investors will like such as its commission-free stock and ETF trades, 24/7 customer service and trading platform, which more active traders will appreciate. You’ll also get access to news and independent research on stocks you’re following as well as a mobile app that helps you stay connected on the go.

Why we like them:

• No fees on stock or ETF trades and its $0.50 per contract fee for options is among the best in the industry.
• Trading platform includes more than 100 chart studies and drawing tools to help active traders identify their next move.
• Customer service is available 24/7 on the phone, so you shouldn’t have any issues getting help when you need it.

Who are they best for? Many investors will benefit from Ally’s offering, but existing customers of Ally’s online bank will appreciate having their finances in one place.

Pricing: Ally charges no fees for stock and ETF trades, while options trades cost $0.50 per contract, less than most of the industry.

Read more in Bankrate’s full review of Ally Invest.

How to start trading stocks quickly and easily

Online stock trading may sound complicated, but it’s fairly easy once you’re set up with an account. Here are a few tips on how to get started quickly:

• Do your research. Researching potential investments ahead of time will allow you to hit the ground running once your account is funded.
• Gather personal information. In order to open an account, you’ll need to provide some basic personal information about yourself and any other people listed on the account. Make sure to have information like your Social Security number handy.
• Link your bank account. By linking your bank account to your online broker, you’ll be able to deposit funds faster than if you mail a physical check. Funding through an electronic transfer should allow you to start trading within a few days of opening your account.

Can you buy stocks online without a broker?

Most people will want to use an online broker to buy and sell stocks. It is true that some companies offer direct purchase programs that allow you to buy stock directly from the company, but these can be onerous to navigate and aren’t necessary when you can buy stocks through most online brokers commission-free.

FAQs

• One of the simplest ways to diversify your investments is to hold a wide portfolio of stocks and bonds using funds that track broad market indexes for each asset. This approach could mean owning a fund that tracks the and a fund that tracks the total bond market. Historically, these two assets have provided a balanced return, with bonds often performing well when stocks decline, though that may not always be the case.

  You may also consider adding alternative investments to your portfolio such as real estate or commodities as a way to diversify your investments.

• Your money is insured at brokerage firms up to $500,000 in cash and securities, including $250,000 in uninvested cash by the Securities Investor Protection Corporation (SIPC). It’s important to remember that this is protection in the event that your brokerage firm fails, not to protect you from investment losses.

• You can start trading at a brokerage firm as soon as you fund your account, which typically takes a few days. Some brokers may even allow you to start trading immediately up to a certain amount such as $1,000.

• Typically, you’ll choose between a taxable brokerage account and retirement accounts such as a traditional or Roth IRA. The type of account you choose will depend on your reasons for opening the account in the first place. If you want to be able to access the money before retirement, you’ll want to go with a taxable account, but you’ll pay taxes on capital gains and income you receive. Retirement accounts come with tax advantages but you won’t be able to access the money immediately without penalties.

• You can get started investing with very small amounts these days. Many brokers allow you to buy fractional shares of stocks and ETFs, so you can get started with even as little as $5 and increase your contributions over time.

Note: Bankrate’s Brian Baker also contributed to this story.