The top places to invest your money in 2024: The best online brokers
For those beginning to invest or seeking a new brokerage account, exploring the top online brokers is an excellent starting point. These brokers typically provide low commissions, robust trading platforms, extensive research and educational resources, and reliable customer support, all geared toward enhancing investors’ success.
Best online brokers in 2024
We’ve analyzed the top brokers according to criteria important to individual investors, such as trading fees, account minimums, and available research. Each broker has been assessed for its advantages and disadvantages, providing a comprehensive comparison of their key features.
Interactive Brokers
With its minimalist trading interface, Interactive Brokers may seem like a basic broker at first glance. However, this platform, often dubbed the “broker to the pros,” prioritizes providing an exceptional experience for active traders. It’s no wonder it’s highly favored among seasoned traders and those who appreciate precision, particularly in terms of rapid trade execution. Volume-based discounts and access to a professional-grade trading platform are especially appealing to this demographic.
Interactive Brokers caters well to investors keen on minimizing expenses. Active traders utilizing the Pro platform can expect a minimum commission of $1 per trade (or half a cent per share for trades exceeding 200 shares), while Lite-tier users enjoy commission-free trading on stocks and ETFs. Furthermore, with access to approximately 19,000 mutual funds without fees — a figure that leads the industry — users are spared from bothersome account or transfer fees.
- Ideal for: Active trading, diverse tradable securities, margin trading
- Commission: $0 (Lite service) or minimum $1 per trade (Pro service), with available volume discounts; $0.65 per options contract
- Minimum: $0
Charles Schwab
For decades, Schwab has maintained a reputation for prioritizing its customers. Charles Schwab excels across the board, boasting low fees, robust research resources, and no minimum account requirements, all while offering reasonable trading commissions. Beginners will appreciate the absence of commissions and access to thousands of no-transaction-fee funds, while seasoned traders will find value in the highly adaptable StreetSmart Edge trading platform and thinkorswim platform inherited from the TD Ameritrade acquisition.
Additionally, Schwab provides exceptional customer support, offering educational resources to guide investors and ensuring prompt responses to inquiries. Those who favor long-term investment strategies will find Schwab appealing for its cost-effective trading, diverse selection of low-fee funds, and extensive range of retirement account options.
- Ideal for: Comprehensive user experience, research tools, responsive customer service
- Commission: $0 per stock or ETF trade; $0.65 per options contract
- Minimum: $0
Ally Invest
Ally Invest serves as a valuable extension for Ally Bank customers seeking a comprehensive brokerage service capable of facilitating various types of trades, including stocks, ETFs, bonds, mutual funds, and even forex transactions for interested clients. Offering industry-standard commissions on stock and ETF trades, as well as competitively low rates on options contracts at just $0.50, Ally Invest is a cost-effective option for traders.
Moreover, the broker provides fee-free access to over 17,000 mutual funds, although additional fund expenses may apply depending on the specific fund.
- Ideal for: Affordable trading commissions, Ally Bank clientele
- Commission: $0 per stock or ETF trade; $0.50 per options contract
- Minimum deposit: $0
E-Trade
For comprehensive investment options, E-Trade offers access to a wide array of assets including stocks, bonds, options, ETFs, mutual funds, and futures. With over 6,000 mutual funds available for purchase without transaction fees, investors have ample choices.
E-Trade provides extensive customer support, including 24/7 access via email, phone, and online chat. Their Power E-Trade mobile app offers a high-quality trading experience, complemented by robust research tools and market commentary for those who seek it.
- Ideal for: Active traders, feature-rich trading platforms, no-transaction-fee mutual funds
- Commission: $0 per stock or ETF trade; $0.65 per options contract, with a discount to $0.50 for 30 or more trades per quarter
- Minimum: $0
Fidelity Investments
Fidelity stands out as an investor-friendly choice, offering a comprehensive brokerage service. Renowned for its extensive research and responsive customer support, Fidelity provides commission-free trading on stocks and ETFs, along with access to thousands of mutual funds without transaction fees.
Based in Boston, Fidelity prioritizes eliminating unnecessary account fees while delivering top-tier services. Its wealth of research and educational resources caters well to beginner investors. Moreover, Fidelity offers a wide range of retirement accounts, making it an ideal platform for long-term investment planning.
- Ideal for: Overall user experience, novice investors, responsive customer support
- Commission: $0 per stock or ETF trade; $0.65 per options contract
- Minimum: $0
Firstrade
Firstrade stands out by offering commission-free trading for stocks, ETFs, and options—a rare offering among brokers. It provides various account types, including IRAs and education savings accounts, along with robust research tools. Firstrade’s highly rated mobile app offers advanced features for traders.
Moreover, Firstrade provides access to a wide range of over 11,000 no-transaction-fee mutual funds, although these funds may still have sales commissions. The addition of the ability to purchase fractional shares of stock in December 2023 makes it attractive to newer investors.
- Ideal for: Options traders, research tools, mobile app functionality
- Commission: $0 per stock or ETF trade; $0 per options contract
- Minimum: $0
Merrill Edge
Merrill Edge shines in its provision of comprehensive research, drawn from its extensive team of in-house analysts. Clients benefit from detailed analyst reports on covered companies, accompanied by valuable educational resources tailored for novice investors.
A standout feature is the seamless integration with Bank of America, enabling swift fund transfers between bank and brokerage accounts. Moreover, these services come at no cost to the client.
- Ideal for: Research tools, Bank of America clientele, customer support
- Commission: $0 per stock or ETF trade; $0.65 per options contract
- Minimum: $0
Webull
Webull, while not as widely recognized as Robinhood, provides a similar platform for commission-free trading across stocks, ETFs, options, and cryptocurrencies. Despite offering 24/7 phone support, the app lacks robust educational resources, particularly for novice investors.
The platform boasts appealing charting features, albeit just a part of its mobile interface. Each stock is accompanied by a detailed page featuring news links and third-party content, along with insights from fellow traders. Instant funding and fractional share purchasing further enhance the user experience.
- Ideal for: Commission-free trading, cryptocurrency transactions, mobile accessibility
- Commission: $0 per stock or ETF trade; $0 per options contract
- Minimum: $0
Honorable mention
The brokers listed below have also achieved high scores according to Bankrate’s methodology and excel in various features that may attract specific investors.
Tastytrade
Although Tastytrade may have an unconventional name for a brokerage, its dedication to offering a favorable environment for traders, particularly options traders, is unquestionable. It charges a commission solely on the buy side of an options trade and limits the total commission to $10 on any options leg, which translates to appealing pricing for those conducting higher-volume trades. Additionally, clients can trade cryptocurrency, stocks, ETFs, and futures, although mutual funds are not available.
Robinhood
Robinhood introduces a sleek and user-friendly mobile app to the trading arena, enabling users to purchase stocks, ETFs, options, and cryptocurrency without incurring any commission fees. Additionally, investors have the option to acquire fractional shares and can earn competitive interest rates on their cash balances. Furthermore, Robinhood has expanded its services to include the option to open an IRA, with a matching contribution feature for investors.
TradeStation
At TradeStation, users have access to a wide range of securities for trading, including traditional assets such as stocks and ETFs, along with less conventional options like futures. Whether through the broker’s advanced mobile app or desktop trading platforms, investors can seamlessly engage in trading activities.
Vanguard
Vanguard, renowned for its cost-effective solutions in the fund industry, extends commission-free trading for stocks and ETFs. With over 3,000 no-transaction-fee mutual funds, investors have a wide array of choices. However, the mobile app lacks advanced features compared to competitors, and customer service is only available via phone on weekdays.
SoFi Active Investing
SoFi Active Investing caters well to novice investors, offering commission-free trading for stocks, ETFs, and options. However, mutual funds are not available. The platform’s fractional share feature enables investors to buy partial shares and reinvest dividends, maximizing investment potential. For existing SoFi customers, such as those with loans or bank accounts, the brokerage account serves as a valuable supplementary option.
What is an online brokerage account?
An online brokerage account is a dedicated financial account designed for investing in various assets such as stocks, exchange-traded funds (ETFs), mutual funds, bonds, options, and beyond. With its online nature, this account empowers users to access the market directly through their computer or mobile device, eliminating the need for assistance from a human advisor associated with full-service brokerages.
What to consider when choosing an online broker
For newcomers to the investing realm, the initial steps might feel overwhelming. It’s advisable to approach it gradually, easing into the process. The encouraging news for aspiring investors is that trading through online brokers has never been more accessible or cost-effective. When considering a broker, it’s crucial to assess your specific requirements:
- Are you inclined towards short-term trading or long-term investment?
- Do you seek a comprehensive broker offering access to retirement accounts like a Roth IRA or business accounts such as a SEP IRA?
- Are you aiming for regular investment without closely monitoring the market?
- Do you prefer investing in individual stocks or opting for funds?
- How much customer support do you anticipate requiring?
Certain brokers may be immediately ruled out if they don’t align with your needs, such as the absence of a Roth IRA if it’s a crucial requirement for you.
What kind of brokerage account is right for you?
Once you’ve identified your requirements, you can assess how each broker addresses them. For instance, Interactive Brokers targets advanced traders, whereas Charles Schwab and Fidelity Investments provide user-friendly platforms suitable for beginners and long-term investors.
Alternatively, if you prioritize mobile trading without extra features, Robinhood or Webull might be suitable options.
Choosing the appropriate broker begins with understanding your needs and selecting a broker that aligns closely with them.
Are online brokers safe?
The Securities Investor Protection Corporation (SIPC) functions akin to the FDIC for brokers, safeguarding clients’ assets in the event of broker failure. Covered brokers, including those mentioned earlier, are protected up to $500,000 in total, with a cash limit of $250,000. Some brokers like Interactive Brokers offer additional insurance for added reassurance.
However, SIPC coverage does not shield against investment losses. While bank products backed by the FDIC are fully insured, market-based investments carry the risk of decline in value. It’s important to note that while individual stocks may depreciate, a long-term investment in a diversified portfolio can yield favorable returns.
What is the best online stock broker for beginners?
New investors should prioritize brokers that prioritize education, research, and robust customer service. These elements are crucial for beginners to grasp the fundamentals of long-term investing and navigate the complexities of the market and brokerage platforms.
In the 2024 Bankrate Awards, Fidelity emerged as the top choice for beginners, closely followed by Schwab, Interactive Brokers, E-Trade, and Merrill Edge. Fidelity’s competitive pricing, extensive research tools, educational resources, and attentive customer service make it a standout option for novice investors.
Brokers with robust customer support channels enable investors to seek guidance and assistance, often round the clock via phone or chat. They also provide educational resources on their platforms, guiding users through trading processes and investment strategies.
Comprehensive research capabilities are invaluable, especially for those considering stock funds like ETFs or mutual funds. For investors interested in individual stocks, access to company research and analysis is essential for informed decision-making. However, it’s crucial for investors to conduct their own research and make independent investment choices.
Bankrate’s thorough assessment of brokers for beginners offers insights into the top recommendations for new investors.
In Conclusion
Choosing the right broker involves considering your specific requirements, as the best choice may not solely revolve around cost. Your investment style and preferences play a significant role in determining the most suitable broker for you. For instance, the needs of a long-term ETF investor differ from those of an active trader.
While the process of selecting a broker may seem intimidating for new investors, rest assured that any of the brokers listed above are reputable options. The crucial step is taking the initiative to begin your investment journey, so don’t hesitate to start. Once you’ve identified a suitable broker, you can embark on charting a path towards a more financially secure future.