Best Online Brokers for Stock Trading in 2023

Investing in stocks is a great way to build long-term wealth, and buying stocks online has become incredibly accessible. To purchase shares of companies like Apple (AAPL), Nvidia (NVDA), or Tesla (TSLA), you can simply create an investing account with an online broker.

These platforms not only facilitate online stock trading but also offer tools, market research, and educational resources to assist you in making informed investment decisions.

The choice of the best online broker for stock trading depends on your investor type and preferred features. Each stock trading platform has its own unique features, and most online brokers now offering $0 stock and ETF trades. 

Below, we highlight our top picks for online stock trading platforms.

What is an Online Brokerage Account and How Does it Work?

An online brokerage account is an investment account that lets you buy and sell different things like stocks, bonds, and funds. You can use it to save up for the future or for specific goals, and you can access your money whenever you need.

With a brokerage account:

1. You can invest in stocks, funds, and more.
2. It’s a way to grow your money over time.
3. You can save for retirement, college, or big purchases.
4. You get tools and info to help make smart investment choices.

Your account shows what you own (like stocks) and how much cash you have to spend. If something you own goes up in value, you can sell it and the profit goes into your account. You can use that profit for more investments or move it back to your bank. Some accounts even give you interest on the money you haven’t invested yet.

What Should You Consider When Choosing a Broker?

Before picking online brokers, consider your investment goals. Do you want to invest in individual stocks, plan for retirement, explore day trading, or try advanced strategies like options?

Once you’ve clarified your investment preferences, evaluate brokers based on key factors such as:

1. Investment Goals: Figure out what you want to invest in—individual stocks, long-term funds, day trading, or advanced strategies like options.

2. Commissions: Check the fees linked to your preferred investments. It affects your costs and satisfaction with the broker.

3. Reliability: Consider the broker’s history. New ones might be legit but untested during market fluctuations.

4. Account Minimum: Some brokers ask for a minimum investment, which could be $500 or more, impacting your ability to invest small amounts.

5. Account Fees: Look for brokers with minimal fees for transfers, account closure, or maintenance. Some might reimburse transfer fees if you move to them.

6. Pricing and Execution: While many brokers offer free trades, active traders should check practices like payment for order flow and how it impacts trade execution.

7. Tools and Education: If you’re new, seek brokers offering free educational resources—webinars, guides, videos—to learn. For advanced strategies, ensure the broker supports clients in understanding risks.

8. Promotions: Brokers often offer bonuses or deals. Don’t choose solely based on these, but a good deal could be a tiebreaker between two otherwise similar options.

Best Online Brokers for Stock Trading

Here’s our selection of the best online stock brokers that cater to various needs and preferences:

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

1. Charles Schwab

Charles Schwab has a strong history of assisting individual investors and has consistently ranked as the “Highest in Investor Satisfaction with Full Service Brokerage Firms” by J.D. Power from 2016-18. Although it dropped to second place in the 2021 and 2022 rankings, the company maintains a tradition of serving a diverse range of investors.

Why choose it?

1. Well-rounded offering: Charles Schwab caters to investors of all levels. Beginners benefit from the $0 account minimum, while active traders appreciate the $0 commission for stocks and exchange-traded funds.

2. Extensive research: Schwab stands out for its high-quality research offerings, including its own equity ratings and analyses from top research firms in the industry.

3. Fund selection: Schwab provides a large selection of funds with low expense ratios and options that do not charge transaction fees.

Why NOT choose it?

1. Smaller selection of fractional shares: While Schwab offers access to fractional shares of S&P 500 stocks, other brokers providing fractional share trading may offer a more extensive selection.

2. Default sweep interest rate: Schwab’s default interest rate on uninvested cash is low. When interest rates rise, some brokers offer higher rates, but Schwab’s default rate may not be as competitive without opting into additional products.

Who is it for?

• Beginner investors
• Advanced traders
• Investors seeking no-minimum index funds
• Investors who rely on premium research

How much does it cost?

Schwab follows the industry standard of zero commissions on stock and ETF trades. However, options trades incur a fee of $0.65 per contract. 

2. Fidelity Investments

Fidelity Investments has established itself as a top-tier online stock broker, excelling in various aspects such as trading platform functionality, low commissions, and customer support.

Whether you are a beginner seeking simplicity or an advanced investor looking for sophisticated tools, Fidelity caters to diverse needs, making it a dependable choice for many.

Why choose it?

Here are some of the standout features:

1. Well-rounded offering: Fidelity Investments provides a comprehensive package, featuring $0 trading commissions, no account fees, a wide range of research options, and a user-friendly platform that can be customized for advanced traders.

2. Mutual funds: Fidelity is highly regarded for its mutual funds, scoring well across various categories. The broker offers a large selection of no-transaction-fee funds, including the Fidelity Zero index funds, known for having no expense ratio and no minimum investment requirement. These investor-friendly practices can result in significant cost savings.

3. Educational resources: Fidelity offers robust educational resources suitable for investors at all levels. Whether you’re a beginner in retirement investing or an active stock trader, Fidelity provides strong resources and research options.

Why NOT choose it?

1. No futures trading: Fidelity lacks support for futures trading, which might be a drawback for investors interested in this particular market.

2. Broker-assisted trade fees: Fidelity’s broker-assisted trade fee is relatively high at $32.95, exceeding what is considered ideal.

Who is it for?

• Frequent traders
• Beginner investors
• Research and data
• Retirement planning assistance

How much does it cost?

Fidelity, like many other industry players, has eliminated commissions on stock and ETF trades. This move is particularly advantageous for long-term buy-and-hold investors but benefits all traders seeking cost-effective solutions.

3. E-Trade

E-Trade stands as a reliable choice for investors across the board, accommodating both passive and active traders, beginners and experts. The platform’s educational section is a standout feature, providing a vast library of educational tools, webinars, news clips, and videos tailored to investors of all levels.

Why choose it?

1. IRAs with 1% match: Robinhood introduced individual retirement accounts (IRAs) in December 2022, standing out with a unique 1% match on contributions, a first among non-employer-sponsored retirement accounts.

2. Costs: Robinhood is a true discount broker, offering some of the industry’s lowest costs. This includes options trades without a contract fee, although options are not currently available in Robinhood’s IRAs.

3. Free cryptocurrency trading: Robinhood remains one of the few brokers allowing free cryptocurrency trading, making it a standout feature among stock brokerages. However, compared to pure-play crypto brokerages, this advantage may diminish. Cryptocurrency is also not available in Robinhood’s IRAs.

4. 24/5 stock trading: Robinhood’s 24 Hour Market feature, rolled out in late May 2023, enables customers to place limit orders anytime between 8:00 p.m. Sunday and 8:00 p.m. Friday.

5. IPO access: Robinhood allows users to participate in a company’s initial public offering (IPO), a feature typically reserved for financial institutions. Note that IPO access is not available in IRAs.

Why NOT choose it?

1. No mutual funds or bonds: The absence of mutual funds and bonds may pose challenges in building a fully diversified portfolio. Customers can only access bonds through bond ETFs.

2. Limited customer support: Although Robinhood has made noticeable improvements in customer service, it still falls short of other brokerages.

3. Reliability: Robinhood has faced criticism for untimely outages and trade restrictions during market volatility. Regulatory charges for misleading customers have led to significant fines, raising concerns about the platform’s reliability.

Who is it for?

E-Trade’s discounts on volume options trading make it an attractive choice for traders who engage in frequent trading activities. 

The broker’s pricing structure provides significant benefits for active traders, allowing them to optimize their trading strategies and reduce costs.

How much does it cost?

Similar to other major brokers, E-Trade charges zero commissions on stock and ETF trades. Options trades incur a fee of $0.65 per contract. Traders who make 30 or more trades each quarter can benefit from a discounted commission of $0.50 per contract. 

4. TD Ameritrade

TD Ameritrade presents a compelling choice for investors at all skill levels. Whether you’re a beginner who requires guidance and education or an experienced trader who seeks the advanced features of the thinkorswim trading platform, TD Ameritrade has you covered.

It’s worth noting that TD Ameritrade has been acquired by Charles Schwab, and the two brokers are gradually integrating their services.

Why choose it?

1. Free research: TD Ameritrade provides a diverse range of third-party research from reputable sources such as the Federal Reserve Economic Database, Center for Financial Research and Analysis, and Morningstar. All this research is freely accessible to users.

2. High-quality trading platforms: Alongside its web and mobile platforms, TD Ameritrade offers the highly rated thinkorswim platform, delivering professional-level trading capabilities on both desktop and mobile devices.

3. Customer support: TD Ameritrade’s customer support is exceptional, offering 24/7 assistance through phone, text, fax, live chat, email, or social media. Additionally, there are in-person meetings available at over 250 branches, enhancing customer accessibility.

4. Large investment selection: TD Ameritrade caters to a wide audience, offering a substantial selection of low-cost mutual funds and advanced products like futures and forex trading.

Why Not choose it?

1. Fractional shares: Unlike some competitors like Fidelity and Schwab, TD Ameritrade does not currently offer fractional trading. This may be a drawback for investors with limited capital who prefer the flexibility of investing by the dollar amount rather than by the share.

2. Crypto and OTC stocks: TD Ameritrade lacks direct access to cryptocurrencies, but it does provide access to exchange-traded cryptocurrency trusts and bitcoin futures for some users. Additionally, the platform charges a substantial commission on over-the-counter (OTC) stock trades.

Who is it for?

• Beginner investors
• Advanced traders
• Investor education/advice
• Fund investors

How much does it cost?

TD Ameritrade charges zero commissions on stock and ETF trades, aligning with the industry trend. Options trades incur a fee of $0.65 per contract. 

5. Robinhood

Robinhood, a relatively new player in the online brokerage industry, has quickly gained a dedicated following due to its commission-free trading and user-friendly mobile app. Over the years, the company has expanded its offerings to include various financial products and services, such as options and cryptocurrencies.

This platform appeals to investors who value simplicity and quick trading capabilities. 

Why choose it?

1. IBKR Lite: Interactive Brokers introduced IBKR Lite in 2019, offering unlimited free trades of U.S.-listed stocks and exchange-traded funds for more casual investors, complementing its traditional advanced trader services.

2. Investment selection: Interactive Brokers provides a diverse range of investment options, including stocks, options, futures, mutual funds, cryptocurrencies, fixed income, and more. These can be traded on hundreds of exchanges across numerous countries.

3. Advanced platform: Geared towards advanced traders, IBKR Pro features per-share pricing of $0.005, an advanced trading platform, and an extensive range of tradable securities, including foreign stocks.

4. $0 account minimum and fractional shares: Both IBKR Lite and IBKR Pro have no account minimums and offer fractional shares of stock. Additionally, there are no account maintenance or inactivity fees for either service.

Why NOT choose it?

1. Website ease-of-use: While Interactive Brokers provides a wealth of information on its website, navigating and interpreting the information may be challenging. For IBKR Pro customers, the various commission and fee structures can be confusing. The website’s sections dedicated to institutional, broker, and proprietary trading accounts may add to the complexity.

2. Lack of IPO and OTC access: Despite excelling in investment selection, Interactive Brokers does not offer users a way to invest in initial public offerings (IPOs). IBKR Lite accounts also lack access to over-the-counter (OTC) stocks.

Who is it for?

• Mobile users.
• Individual taxable accounts and IRAs.
• Margin accounts.

How much does it cost?

Robinhood offers zero commissions on stock and ETF trading. The platform’s premium tier, Robinhood Gold, available for $5 per month, grants access to research and discounted margin trading.

6. Interactive Brokers

Interactive Brokers has long been recognized as a brokerage for professionals and active investors, providing a powerful trading platform and efficient trade execution. In recent years, the company has made efforts to appeal to newer investors by introducing a “lite” version of its service, offering no-fee trading.

Why choose it?

1. IBKR Lite: Interactive Brokers, known for catering to advanced traders, introduced IBKR Lite in 2019, specifically designed for more casual investors. IBKR Lite offers unlimited free trades of U.S.-listed stocks and exchange-traded funds.

2. Investment selection: Interactive Brokers provides a broad range of investment options, allowing users to trade various assets, including options, futures, mutual funds, cryptocurrencies, fixed income, and more. This can be done on numerous exchanges across dozens of countries.

3. Advanced platform: Geared towards advanced traders, IBKR Pro offers per-share pricing of $0.005, an advanced trading platform, and an extensive range of tradable securities, including foreign stocks.

4. $0 account minimum and fractional shares: Both IBKR Lite and IBKR Pro have no account minimums and offer fractional shares of stock. Additionally, there are no account maintenance or inactivity fees for either service.

Why NOT choose it?

1. Website ease-of-use: While Interactive Brokers provides a wealth of information on its website, the navigation and interpretation of desired information may not be straightforward. IBKR Pro customers may find it challenging to quickly identify their costs due to various commission and fee structures. Sections of the website dedicated to institutional, broker, and proprietary trading accounts may add to the confusion.

2. Lack of IPO and OTC access: Despite excelling in investment selection, Interactive Brokers does not provide users with a means to invest in initial public offerings (IPOs). IBKR Lite accounts also do not have access to over-the-counter (OTC) stocks.

Who is it for?

• Casual and advanced traders
• Day traders
• Margin accounts
• Options trading
• Research and data
• International investors

How much does it cost?

Interactive Brokers was one of the pioneers in the industry’s shift towards no-fee stock trading. The company’s Lite service charges no commissions on stocks and ETFs. For its Pro service, Interactive Brokers charges $1 per trade for up to 200 shares, with subsequent shares costing a half-penny each. Options trades incur a fee of $0.65 per contract, with volume-based pricing available for active traders.

7. Merrill Edge

Merrill Edge stands out as a full-service broker that caters to both traders and investors, providing high-quality tools and resources. With over 2,000 locations within parent company Bank of America’s branches, Merrill Edge offers easy access to human advisors, making it a valuable feature for newer investors seeking guidance.

Why choose it?

1. Integration with Bank of America: Merrill Edge benefits from Bank of America’s acquisition of Merrill Lynch, providing clients with a seamless experience. Users can access both Bank of America and Merrill Edge accounts with a single login.

2. Educational resources: Merrill Edge offers a comprehensive range of educational materials, including articles, courses, videos, webinars, virtual events, free tools, and calculators. The Idea Builder tool aids newer investors in discovering investments that align with their preferences, such as ESG products.

Why NOT choose it?

1. Investment selection: Advanced traders might find a limited offering of securities on Merrill Edge.

2. Fractional shares: Merrill Edge lacks the capability to trade fractional shares. This feature allows investors to buy by the dollar amount, enhancing diversification in a more affordable manner. Unfortunately, Merrill Edge does not currently support this functionality.

Who is it for?

• Bank of America customers.
• High-balance customers.
• Environmental, social and governance investors.

How much does it cost?

Merrill Edge charges no fees for stock and ETF trades. Options trades incur a fee of $0.65 per contract, which is consistent with the prevailing rates in the industry.

8. Ally Invest

Ally Invest offers a range of features that investors will appreciate, including commission-free stock and ETF trades, 24/7 customer service, and a user-friendly trading platform. The platform caters to both active traders and investors seeking convenience.

Why choose it?

1. Costs: Ally Invest caters to both novice and experienced investors by offering $0 trading costs on eligible U.S. securities, no account minimum, and affordable options trading. In February 2023, Ally Invest eliminated its $9.95 fee for mutual fund trades, providing transaction-free access to around 5,500 mutual funds.

2. Advanced features: Beyond competitive costs, Ally stands out by providing advanced features such as forex trading, automated portfolio management options, and a suite of free tools tailored for technical investors.

3. Cash management: While uninvested cash in an Ally Invest brokerage account doesn’t earn interest, Ally Invest allows instant money movement between Ally savings and brokerage accounts. This feature enables investors to leverage interest rates several times higher than the typical default sweep interest rates offered by most brokerages. Note that opening a separate Ally savings account is required for this.

Why NOT choose it?

1. No branches: Ally Invest lacks physical branches, meaning those seeking in-person meetings will need to explore alternative options.

Who is it for?

• Active traders.
• Beginner investors.
• Options traders.
• Forex traders.

How much does it cost?

Ally Invest charges no fees for stock and ETF trades. Options trades incur a fee of $0.50 per contract, which is lower than the industry average.

How to Start Trading Stocks Quickly and Easily?

While it might take you some time to pick an online broker, it’s easy to get started trading stocks once you’re set up with an account. However, before investing in the stock market, take some time to educate yourself. Understand basic concepts, market terminology, and different investment strategies. 

Here’re some tips to help you get started:

1. Do Your Research: Research potential investments in advance to be well-prepared when your account is funded. Identify stocks or companies you are interested in. Analyze their financial health, performance, and any recent news or developments that might impact their stock prices. 

2. Gather Personal Information: To open an account, provide basic personal information for yourself and any other account holders. Have details like your Social Security number readily available.

3. Explore the Trading Platform: Familiarize yourself with the trading platform. Understand how to place orders, review your portfolio, and access research tools. Many platforms offer demo accounts, allowing you to practice trading with virtual money before using real funds.

4. Link Your Bank Account: Connect your bank account to your online broker for faster fund deposits compared to mailing physical checks. Electronic transfers should enable you to start trading within a few days of opening your account. 

Once your account is funded and you feel comfortable with the platform, you can start trading. Begin with a small investment and gradually increase as you gain experience. Monitor your investments regularly and stay informed about market trends.

Frequently Asked Questions

Which brokerage account is best?

It depends on your goals. For long-term savings, prioritize brokers with good financial planning tools or those offering retirement accounts. If you’re into day trading, consider order execution quality, as some brokers may execute trades slower or at worse prices. For an all-around choice, compare basics like trading costs and investment selection.

How much money do you need to start investing?

You don’t need a specific amount to start investing nowadays. Many brokers allow you to open accounts with no minimums and offer fractional shares. Even with a small budget, consider smart approaches. Instead of investing $1 in a single stock, use ETFs for better diversification. They track various companies, providing more value for your money.

Consistency is key when investing small amounts. Regularly investing even a modest sum, like $10 weekly, can lead to surprising growth. This steady approach helps smooth out market ups and downs.

Can you invest with a small amount of money?

Yes, many online brokers allow small deposits. 

Do brokers offer mobile platforms?

Yes, many online brokers have great mobile apps with features similar to their desktop versions. For options traders, the tastytrade app is a streamlined version of the desktop platform.

TD Ameritrade offers a robust thinkorswim mobile app for active traders and a standard app for less active investors, each tailored to the user’s needs.

Can you lose money in a brokerage account?

Certainly, you can lose money in a brokerage account. The market involves risk, and no reward comes without it. Losses can happen with a bad investment or even with a good one at the wrong time.

In financial markets, opportunities for gains and losses are endless. If your funds aren’t all in uninvested cash (protected up to $250,000 by Securities Investor Protection Corporation insurance), there’s a risk of losing money. However, a fully uninvested account won’t gain either. 

Can I buy stocks without a broker?

Yes, you can buy stocks without a broker, but it’s not common now. Some companies have direct stock purchase plans, letting you buy shares directly from them. These plans have internal rules and may be limited to company employees.

Contact companies to check if they offer such plans and learn the terms. While these plans once avoided brokerage fees, the rise of zero-fee online brokers has made them less common.

Should I just choose the cheapest broker?

While trading costs matter, other factors like access to investments and educational tools can be more valuable. Many brokers offer commission-free trades, so consider your overall needs.

How can I diversify with little money?

To diversify with little money, consider investing in exchange-traded funds (ETFs). ETFs are like mutual funds but trade on stock exchanges. Each ETF holds a basket of stocks, often hundreds, meeting specific criteria (e.g., part of a stock market index). Unlike mutual funds with high minimums, you can buy as little as one share of an ETF at a time.

Is my money insured at brokerage firms?

Yes, your money is insured, but only against the unlikely event of a brokerage firm going under. SIPC coverage doesn’t protect against investment losses, only the loss of cash if the firm fails.