Online brokerages compared
Want to trade stocks? On these measures, the brokerage firms below earned their place on our list of the best online brokers for stock trading. We evaluated brokerage firms and investment companies on the services that matter most to different types of investors. For example, for active traders, we've noted online brokers with low or no commissions and robust mobile trading platforms. 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.
Best Online Brokers
There are lots of brokerage firms out there. Each of them will likely tell you that they can offer more for your investing dollar than any of their competitors can. But when you get right down to it and you're ready to start investing, what should you look for in a broker and what do you need to do to get set up?
One of the first questions you'll want to ask yourself when you start your search for a broker is, "Which brokers will let me open an account? These restrictions usually boil down to age and money. If you're young and interested in investing, keep in mind that in order to open your own brokerage account, you'll need to be a legal adult usually 18 years old. If you're not considered a legal adult yet, you can still invest, but your parents will need to set up a custodial account with your broker.
A custodial account is essentially an account set up for a minor where the parents bear the legal responsibilities on behalf of the minor. With a custodial account, you'll still be able to trade stocks just as you would with your own account, except that Mom's and Dad's names will be on the account as well. Another thing you'll have to think about is the minimum account balance required by your broker.
Most brokers require a minimum account balance for the same reason that banks do: They make money by lending your cash out to other customers in exchange for interest. Because it's expensive for a broker to maintain your account, they have to be sure that you're bringing in enough incremental revenue to cover the expenses of having you as a customer.
Deciding whether or not a broker meets your needs is just as important as figuring out if you meet the broker's criteria for doing business. Important things you'll want to know about a broker:. These days, online discount brokers have become pretty universal in their acceptance -- they're convenient, their fees are lower, and you can get your information instantly. But for some people, being able to walk into a real office and talk to a real person is a big deal.
If that's the case for you, then a traditional "brick-and-mortar" or full-service broker might be worth looking at. Remember, though, fees are usually much higher with full-service brokers, and unless your account has a pretty impressive balance, you probably won't be getting a whole lot of face time with your broker. Never fear, even discount brokers are now touting their hundreds of office locations and approachable brokers -- a sign of the ever-shrinking customer service gap between the full-service brokers and the discount ones.
However, even with a discount broker, expect to be charged considerably more for taking advantage of those broker-assisted trades. Make sure to look into professional affiliations. You'll likely need a checking account to get money into your brokerage account.
While cutting a check has been the method of choice for quite some time, paperless methods like electronic funds transfer are becoming an industry standard for getting cash into your account. For your opening deposit, they'll likely still need a check.
Sorry, folks, no credit cards accepted here. Now, you've likely heard of a margin account. It's essentially a way for you to borrow money or securities from your broker to invest. Buying on margin is not something that you'll want to do until you're pretty familiar with investing and understand the additional account restrictions related to margin like a higher minimum balance.
The services brokers provide to their clients can vary quite a bit from firm to firm; chief among them is the ability to buy and sell stocks. When novice investors think about investing, buying and selling stocks is usually what comes to mind, but there are other securities a.
Other investment products, like mutual funds, bonds, options, and CDs can also be purchased through your broker. While these types of investments might not be something you're interested in right off the bat, the way they are handled by your broker should be something that you consider when you're looking into opening a brokerage account.
Of special interest are mutual funds. Many larger brokers have their own mutual fund offerings or special relationships with firms that do, and you can bet that they're going to push those funds a lot harder than they will the competition's funds.
If you're considering putting some money in mutual funds, check to see how many mutual funds your broker offers with no transaction fees. However, don't let these fees be a deal-breaker; with the rise of exchange-traded funds, the mutual fund arena is changing. If you decide to open an account with an online discount broker, a big factor to consider is the trading platform you'll use to access your account.
In the past several years, firms that offer online trading have been working to redesign their trading platforms in a way that makes information more readily available to their clients.
These days, most well known firms have very impressive trading platforms that provide investors with account information, research, and, of course, the ability to buy and sell investments. If you head over to the Web site of a broker you're looking at, you can find a breakdown of what's offered in the trading platform. Additionally, many brokers offer more advanced platforms that appeal to investors who have high volumes of trades like day traders.
While these premium platforms may offer more features, they typically come at an additional cost to you, the client. When it comes down to it, if you're not going to use the additional features and most won't , don't bother with them. You're pretty much guaranteed to incur these.
Your broker will charge you a fee for every trade you make. If want to have your broker make trades for you, then you will usually need to pay for that extra face or phone time -- substantially more than you would for a regular self-directed trade.
Some brokers charge monthly maintenance fees or inactivity fees when their clients don't meet certain conditions. Become familiar with your broker's policies on this. The interest on the money you borrow from your broker can be pretty hefty in some cases. Usually, low trading and maintenance fees are offset by higher margin interest rates. Some brokers will charge you for taking money out of your account. Make sure that you understand the limitations placed on your ability to touch your own cash.
Remember, not all of these fees will apply to you, so before you select a broker, make sure you're not paying for services that you won't find yourself using.
Once you've made your way through the labyrinth of brokers and found that "special one" for you, it's time to take the plunge and set up your account with them. If your broker has a retail location nearby, you should be able to set up an account in person. Otherwise, you'll be able to fill out your brokerage application online. In terms of the information you'll be asked to submit on your application, opening a brokerage account isn't far off from opening a checking account.
Still, national security legislation has impacted the policies many financial institutions have for opening new accounts. Brokerage firms are now held to a higher standard of verifying the identities of their clients. If you decide to open your account in person, it's a good idea to ask the broker what you'll need to bring before you show up at their office. Provided that you have all the required documents, your account will usually be set up the same day. However, if you open an account online, you'll probably get a follow-up telephone call, where you'll be asked to mail or fax copies of your IDs and W Opening a brokerage account isn't much more complicated than opening a bank account, but it can take its due share of research.
By taking the time to ensure that a particular broker is right for you, you'll be doing your future portfolio a big favor. How to Open a Brokerage Account There are lots of brokerage firms out there. Know Yourself One of the first questions you'll want to ask yourself when you start your search for a broker is, "Which brokers will let me open an account? Know Your Broker Deciding whether or not a broker meets your needs is just as important as figuring out if you meet the broker's criteria for doing business.
Important things you'll want to know about a broker: Can you walk into the broker's office and get one-on-one help? Does the broker even know what they're doing?
How can you get money into your account? One-On-One Help. Broker Competence. Funding Your Account. Services: Stocks and Beyond The services brokers provide to their clients can vary quite a bit from firm to firm; chief among them is the ability to buy and sell stocks.
Platform: Your Trading Dashboard If you decide to open an account with an online discount broker, a big factor to consider is the trading platform you'll use to access your account. Fees: Investor Beware There are five major types of fees associated with having a brokerage account: 1. Trading Fees. Broker-Assisted Orders. Account Maintenance. Withdrawal or Transfer Fees. The Big Step: Applying For Your Account Once you've made your way through the labyrinth of brokers and found that "special one" for you, it's time to take the plunge and set up your account with them.
Here are some of the things you'll be expected to provide when you open your account: Basic personal Information name, address, employer Your Social Security number Signature card W-9 form Two forms of identification including one photo ID Check to make your opening deposit If you decide to open your account in person, it's a good idea to ask the broker what you'll need to bring before you show up at their office.
Start Smart Opening a brokerage account isn't much more complicated than opening a bank account, but it can take its due share of research.
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11 Best Online Brokers for Stock Trading of May 2020
There are lots of brokerage firms out there. Each of them will likely tell you that they can offer more for your investing dollar than any of their competitors can. But when you get right down to it and you're ready to start investing, what should you look for in a broker and what do you need to do to get set up? One of the first questions you'll want to ask yourself when you start your search for a broker is, "Which brokers will let me open an account? These restrictions usually boil down to age and money.
Online Brokerage Comparison Tool
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence. Our articles, interactive tools, and hypothetical examples contain information to help you conduct research but are not intended to serve as investment advice, and we cannot guarantee that this information is applicable or accurate to your personal circumstances. Any estimates based on past performance do not a guarantee future performance, and prior to making any investment you should discuss your specific investment needs or seek advice from a qualified professional. The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. All reviews are prepared by our staff. Opinions expressed are solely those of the reviewer and have not been reviewed or approved by any advertiser.
This online broker comparison is designed to bring more clarity into your broker selection.
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Compare Online Brokers
With so many different types of online stock brokers available to investors, it can be tough to choose one that works best for you. When we started our online broker reviews in the fall of , no one knew how the world would change. We recognize that we all are living through a particularly volatile time as we deal with this global crisis, and financial markets have also seen unprecedented change, impacting all investors. Our analysis of the online brokerage industry is, " Commission Cuts, Consolidation, and a Coronavirus Crash. Our mission has always been to help people make the most informed decisions about how, when and where to invest. Given recent market volatility, and the changes in the online brokerage industry, we are more committed than ever to providing our readers with unbiased and expert reviews of the top investing platforms for investors of all levels, for every kind of market. Fidelity earned our top spot for the second year running by offering clients a well-rounded package of investing tools and excellent order executions. It has continued to quietly enhance key pieces of its mobile-responsive website while committing itself to lowering the cost of investing for its clients. Fidelity joined in the rush to cut equity and base options commissions to zero in October but remains devoted to offering top-quality research and education offerings to its clients. The firm also makes it easy for clients to earn interest by sweeping uninvested cash into a money market fund. Fidelity also shares the revenue it generates from its stock loan program, and allows clients to choose which stocks in their portfolios can be loaned out. Fidelity provides excellent trade executions for investors. Your uninvested cash is automatically swept into a money market fund to help contribute to overall portfolio returns.
Online Broker Comparison
Disclosure: We are committed to recommending the best products for our readers. We may receive compensation when you click on links to products, but this never affects our reviews or recommendations. If you want to manage your investments, the best way to do so today is with an online stock broker. There are a handful of excellent stock brokers to choose from, so knowing which is the best for your needs may be a challenge. To help you quickly hone in on the best option for your unique needs, we reviewed some of the best online stock brokers on the market today. Here are our picks for the best online stock brokers. Fidelity is our top choice for online stock brokers. This brokerage combines just about everything the typical investor would want in a brokerage. That includes accounts with no fees for regular activity, a wide range of account types and available investments, and excellent research and education resources.
