The 5 Best Online Brokers for Stock Trading in 2020

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Investing in stocks is a great way to diversify your portfolio and work toward a bright financial future.

But the world of stocks can be complex. The stock market, with all of its intricacies, is always changing. What works well today may be overshadowed by the next big thing tomorrow. This is especially true with online brokerages.

Shopping for an online stock brokerage can be a daunting task. Your assets are important and you can’t afford to put your faith in an online broker if you don’t really know what you’re getting. Research is crucial in order to find the right broker for you.

The 5 best online stock brokers for trading

Ally Invest

4
4/5

DollarFlow rating

FEES

Commission-free trading on eligible U.S. stock, ETF, and Options trades.

MINIMUM BALANCE

No minimum deposit for account opening.

Today’s investors are getting younger, meaning brokers now must appeal to a demographic that values ease of use above all else. Overwhelmed beginners will find comfort in Ally Invest. Its user-friendly platform makes it easier than ever to trade, and ease of use is just the tip of the iceberg. Like many other online brokers, Ally Invest lets users invest with zero commissions on most trades, and doesn’t require a minimum deposit. But these are far from the only perks you’ll get with Ally Invest. Also like other top-notch brokerages, Ally Invest is chocked full of features and functionalities to help you succeed on your investments path. This valuable resource suite contains many of the same old functions used by TradeKing, which was purchased by Ally Invest’s parent company, Ally Financial. This acquisition birthed Ally Invest. Another benefit of trading with Ally Invest is its partnership with Ally Bank, which allows users to connect their Ally Invest and Ally Bank accounts seamlessly.

And when it comes to customer service, Ally Invest has users covered. Its sibling company, Ally Bank, is online only. This means Ally Invest has gone to great lengths to make its customer service representatives available and always accessible to help users with their financial needs. Ally Invests’ customer service ranks high for its class, making it a safe bet for apprehensive traders looking for a broker to hold hands with at the start.

TD Ameritrade

5
5/5

DollarFlow rating

FEES

No commission on ETFs, U.S. equity trades, and Options (+ $ 0.65 per contract fee)

MINIMUM BALANCE

No minimum deposit to get started

If you’re looking for the total package in terms of brokers, you likely won’t be disappointed with TD Ameritrade. In addition to $0 trades, TD Ameritrade customers also gain access to a strong trading platform that allows for top-of-the-line market research and comprehensive education.

Education is of huge importance when entering the world of stocks. TD Ameritrade is among the top online brokers in the industry in terms of education, employing over 200 instructional videos to help users get into the swing of things. It even has its own media network chock full of interviews, market commentary, and other educational content to help customers. Its use of gamification and quizzes manages to make stocks fun.

Also, TD Ameritrade is heavy on technology. It’s just about the only broker that allows its customers to access their trading accounts through Facebook, Twitter, Alexa, and Apple Chat. Given our collective reliance on these platforms, it’s a convenience users shouldn’t take for granted. Plus, TD Ameritrade’s thinkorswim platform is also as advanced as they come. With this, users gain access to dozens of real-time data charts. They can even customize these studies with thinkscript, which is another big benefit to be found in trading with TD Ameritrade.

Fidelity

4
4/5

DollarFlow rating

FEES

$0.00 commission applies to online U.S. equity trades, ETFs and Options (+ $ 0.65 per contract fee)

MINIMUM BALANCE

No minimum initial deposit

There is a reason for Fidelity’s popularity among online brokers. This platform offers zero fees on trading commissions, a suite of excellent research tools, and customer service that stands toe-to-toe against the rest.

One of Fidelity’s biggest advantages is its stance on fees. It’s long been known for this, even before the company did away with commissions for stocks, ETFs, and options in October of 2019. Since then, Fidelity has only improved. It offers a solid selection of funds carrying low or no minimum and holds a wide range of education options for users. In this regard, Fidelity is best in its class. Users can research through upwards of 20 third-party providers like Thomson Reuters, Ned Davis, and Recognia, to name just a few. Investors are also invited to take a quiz to narrow down providers to those that most closely match their own unique investment style.

Good customer service is crucial for beginner investors. Fidelity delivers on this front. From its in-person guidance to its free investor seminars, available at branch locations around the U.S., Fidelity walks investors through the entirety of the process, giving them the tools they need to thrive.

E*TRADE

4
4/5

DollarFlow rating

FEES

$0 commissions for online US-listed stock, ETFs, and Options

MINIMUM BALANCE

No minimum initial deposit

It makes sense that a company with a name like E*TRADE would place special emphasis on the online experience. E*TRADE’s web platform makes trading easy. Not only does it employ a user-friendly interface, but E*TRADE allows for trading in 77 international markets, and requires no transaction fees on over 1,300 no-load mutual funds.

One of the biggest perks of doing business with E*TRADE is E*TRADE Pro. This function is ideal for more active traders, with an easy-to-use app that makes playing the stock market a breeze. It’s offered to any customer who has executed a minimum of 30 stock or options trades throughout the calendar quarter. Another way to gain access is to maintain a minimum account balance of $250,000. With E*TRADE Pro, users will enjoy advanced analytics, an options screener, a strategy optimizer and so much more. Better yet – users can track the markets via live streaming watch lists and even use a probability calculator to help map out investments.

Merrill Edge

4
4/5

DollarFlow rating

FEES

Unlimited free stock and ETF trades

MINIMUM BALANCE

$0

Merrill Lynch has long been a trusted name in the realm of finance. Merrill Edge is the result of Bank of America’s acquisition of Merrill Lynch, and it’s got its own base of loyal followers. Bank of America users will be particularly thrilled with Merrill Edge, as the platform makes the use of both services seamless. For instance, users can view their Merrill Edge and BOA accounts with just one login, and even make real-time transfers between the two instantly.

When it comes to fees, Merrill Edge offers no commission on stock or ETFs, and a per-contract fee of just $0.65 for options trades. To take it a step further, Merrill Edge employs the Preferred Rewards program, giving customers access to a variety of promotions and discounts. Some of these include reduced loan rates, discounts on mortgage fees, and higher interest rates for savings accounts.

Where research is concerned, Merrill Edge doesn’t skimp. In addition to research from the BofA Merrill Lynch Global Research division, users will also find assistance from plenty of third-party organizations, such as Recognia, CFRA, and Trefis. The Merrill Edge website offers videos, webinars, courses a wide range of articles to help customers gain a better understanding of investing. There is also MarketPro, an active trader platform available to all Merrill Edge customers. It’s use of interactive charts, a customizable dashboard, and alerts make for a robust research platform that doesn’t leave much to be desired.

Making the most of your online broker

Whether you are hoping to save for retirement or just looking to have a little fun with your money, stocks are a great way to go. But deciding to invest in stocks is just the beginning. Without a good broker on your side, it will be difficult to make the moves you want. With a broker, you will also gain access to resources you may find difficult to come by otherwise. This is just one of the many reasons beginners choose online brokers to jump in the game.

Not sure how to invest? No problem. With today’s online brokers, help is never too far away. Once you narrow down the reasons for investing and playing the market, you can begin finding the broker that’s just right for you and your goals for your future.

But, where do you begin? How do you even know what to look for when shopping for an online broker? How can you be sure the broker you choose will be able to deliver the things you need in order to make your trading experience what you want it to be?

Let’s dive into trading and why a growing number of investors are playing the market.

Why trade in the first place?

There are a few reasons why investors prefer stocks over other methods of investing. Stocks often yield the highest returns, far more and much more quickly than investing in a CD, for example.

Most financial advisors will suggest that maintaining a diversified portfolio is the best way to build wealth. This is because spreading your money across a variety of investments means you won’t lose everything just because one investment fails. This is the equivalent of not putting all your eggs in one basket. This is especially true when it comes to your financial future.

While many people think there’s no harm in letting your extra money sit in your checking account forever, there’s still the small matter of inflation.

What is inflation? Say you have $10,000 and hold onto it for 30 years. In 30 years, your money won’t be worth as much. This is because of inflation. To combat inflation, invest your money in things like stocks to preserve its worth now.

Another reason people invest in stocks is to save for retirement. Putting an amount like $5 per year into stocks will compound into large savings in the long run. For some people, these profits are enough to live comfortably during retirement.

Maybe you’ve got several reasons for your interest in stocks. No matter your “why”, there are plenty of ways to get started. While traditional methods of investing meant visiting your local bank or financial advisor for guidance, now the process can be done in the comfort of your own home.

What to look for in a trading broker

Playing the stock market can be stressful enough. Choosing a bad broker can easily add to that stress. That’s why it’s important that you do your research before choosing a broker. Failing to do this one step can lead to frustration later down the line. Don’t put yourself in this situation.

There are a variety of factors to take into account when shopping for a broker. You have dozens of options to select from. The best pick for you will depend on several things, including:

Your financial goals

What are you hoping to get out of the stock market? People invest for different reasons. Figuring out your “why” will help make the process of finding a broker much easier. Start by considering whether you are investing to set money aside for the future, or whether you are making moves for the “now”. This will help determine how serious you are about investing.

Fees

Fees are important when deciding on an online broker. Luckily, in the day and age of the internet, you’ll come across plenty of free options that will let you trade with maintenance costs. But keep in mind that free doesn’t always mean better. You’ll want to consider how much you can afford to spend on fees and whether you can justify these costs. Better customer service may cost more, for instance. But if you’re new to stocks and need additional guidance, it may be worth the cost. 

Platform compatibility

Considering you’ll be online for your interactions with an online broker, you’ve got to make sure the process is hassle-free. Some online brokers prioritize ease-of-use better than others. You don’t want to commit to a broker and then find out that its platform requires too much effort to use well. Make sure you are comfortable with your chosen broker’s platform before signing up.

Education

You may be new to investing. Maybe you’re a seasoned investor who wants to learn a bit more about the tricks of the trade. If you are and aren’t quite sure how to improve your trading skills, it helps to have assistance through your broker. Some online brokerages make education easy to access for customers. By learning more about trading directly through your brokerage, you’ll have a cohesive form of learning that may provide an advantage and help you understand trading more clearly.

Ease of moving funds

Having access to your funds seems like a no-brainer, but you’d be surprised how many brokers can make this part difficult. When choosing an online broker, pay close attention to policies regarding the withdrawal of funds. You don’t want to sign up with a broker who is going to hold your funds hostage when you need them. Definitely do not overlook this part.

Customer service

Don’t underestimate the importance of customer service when it comes to investing. The financial industry is filled with jargon and you may not know everything there is to know about stocks to begin with. And that’s OK. What’s crucial, though, is finding a broker that can walk you through the different situations you may find yourself in throughout your investment journey. Things like 24/7 customer service go a long way when your hard-earned money is involved.

Weighing the pros and cons of each online broker can help you make the right decision. Here are some well-rated brokers to consider as you determine which online broker can provide what’s best for you.

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