FinTech

11 Best Online Brokers for Stock Trading of October 2023

október 10, 2023

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. Fidelity offers $0 trading commissions, a selection of more than 3,300 no-transaction-fee mutual funds and top-notch research tools and trading platform. Its zero-fee index funds and strong customer service reputation are just icing on the cake. Full-service brokers charge more fees than a discount brokerage, which will typically only charge you when you make a trade. Over time, this will end up costing significantly more than discount brokerages, but the attention to your account will also be much higher.

The amount you pay a broker depends on the level of service you receive, how personalized the services are, and whether they involve direct contact with human beings rather than computer algorithms. Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master’s in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses.

Functions of a Brokerage

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.

When it comes to retirement and education savings accounts (IRAs and 529 plans), those are tax-deferred, which means you are not taxed on earnings in your account, but you could owe taxes when you withdraw the money. Our advisors start by looking at your financial big picture, giving you expert guidance and recommending investments to help you reach your goals. They’ll help you access investments that can align to your goals, but they do not offer ongoing monitoring of your investments. You’ll have full control over your account and make all decisions about when to purchase, hold, or sell any of your investments.

How Does a Brokerage Account Work?

A brokerage account is a financial account similar in function to the accounts you have with a bank. With a brokerage account, you deposit funds with an investment firm (the brokerage). This is usually done by a transfer from your existing bank account. Once funds are added to your brokerage account, you can put the money to work using the brokerage’s trading platform to invest those funds in the market. The assets you buy with your cash can be anything offered by that brokerage, including stocks, bonds, ETFs, and even cryptocurrency. If you prefer to actively manage your own investment portfolio, an online brokerage account is essential.

Many full-service brokers seek out affluent clients and establish minimum account balances that are required to obtain their services, often starting at six figures or more. The use of the term “advisor(s)” throughout this site shall refer to both investment advisors and broker-dealers as a collective term. Many top brokers offer account bonuses based on the size of your initial deposit.

Individual Retirement Account (IRA)

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. System availability and response times may be subject to market conditions. Fractional share quantities can be entered out to 3 decimal places (.001) as long as the value of the order is at least $1.00. Dollar-based trades can be entered out to 2 decimal places (e.g. $250.00).

True to form, the company continues to roll out new product enhancements, like updates to its already impressive charting functionality and a portfolio digest feature announced in 2022. SIPC protects $500,000 per customer, including only up to $250,000 in cash. SIPC does not protect you from bad investment decisions or a loss in value of your investments, either due to your own choices or poor investment advice.

Retirement guides

Fidelity also distinguishes itself in the area of international stock trading, offering access to the markets of 25 countries. 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. 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. Robinhood provides free stock, options, ETF and cryptocurrency trades, and its account minimum is $0, too.

• This means that any recommendations they make to you will be tailored to your specific needs, preferences, and financial circumstances.
• For people venturing into investing for the first time, we’ve included the best online brokers for educational resources (including webinars, video tutorials and in-person seminars) and on-call chat or phone support.
• We publish unbiased product reviews; our opinions are our own and are not influenced by payment we receive from our advertising partners.
• Once your account is set up, you can deposit funds and place investment orders through the brokerage account, and the transactions will be carried out on your behalf.
• Webull will appeal to the mobile-first generation of casual investors with its slick interface for desktop and mobile apps, but the brokerage also delivers an impressive array of tools for active traders.
• Generally, if you’ve held the investment for more than a year, you’ll pay the long-term capital gains tax rate on the proceeds and if you’ve owned it for less than a year, you’ll pay the short-term capital gains tax rate.

Unlike traditional brokers, online brokers facilitate transactions through user-friendly trading platforms, eliminating the need for face-to-face interactions. These platforms provide a range of features, including easy-to-use trading tools, comprehensive research and analysis capabilities, and reliable customer support. In our analysis, 11 online brokers stood out as the best brokerage accounts to trade stocks, due to their low fees, strong trading platforms and quality customer support. You deposit cash in a brokerage account and use the funds to purchase investment assets like stocks, bonds, mutual funds and exchange-traded funds (ETFs).

Expert insights for our wealth management services

You need to contact companies to find out whether they offer a direct stock purchase plan and what the terms and conditions are. These plans initially helped investors avoid brokerage fees, but the rise of online discount brokers with zero fees has removed this barrier, making the direct stock purchase plan somewhat of a relic. Your online brokerage account will display your holdings (the assets you’ve purchased) as well as your cash balance (your buying power). If you invest in something that gains in value, you can sell it and the profits will be deposited in your online brokerage account.