Best Online Brokers for Stock Trading In 2021

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A broker is a person or firm that connects investors looking to buy or sell securities (such as stocks or bonds) with the other side of the transaction.

With a good number of brokerage companies in the U.S., choosing the best online brokers for stock trading might be befuddling. To that end, this article discusses the best online brokers for stock trading in 2021 and what makes them the best pick.

Take a quick look at the table of contents below.

What Is An Online Stock Broker?

An online broker is a financial institution that grants you access to buy securities, such as stocks, via an online platform. Online brokers are sometimes called discount brokers because their fees are significantly lower than those charged by a typical full-service brokerage firm.

You won’t get the same financial advice or investment recommendations from an online broker as you would from a full-service broker, but you will get commission-free trading and access to a good number of other services and products depending on which broker you choose. For most investors, using an online broker makes sense.

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How To Spot The Best Online Stock Brokers

The best online stock brokerage account for you solely depends on your needs. Here are a few things you might want to consider:

  • You probably don’t need a full-featured trading platform if you just want to buy and hold stocks.
  • If your primary goal is to purchase mutual funds, look for a broker who has a large selection of no-transaction-fee mutual funds.
  • For first-time investors who only wants to invest a few hundred dollars, you have to look for a broker who has no minimum investment requirement.
  • If you intend to trade bonds or stock options, or if you prefer to trade over the phone rather than online, compare the fees charged by each broker.

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What To Consider When Choosing A Broker

The best online brokers for stock trading offer investor-friendly features and fees traders can easily justify. To come up with the list of best online brokers for stock trading, we considered the following factors:

  • Price: When it comes to fees, you’re in luck because most online brokers have lessened their trading commissions on stocks and ETFs to $0. Fees and trading costs were taken into account when compiling this list of the best online trading sites.
  • Broker resources: It is important you consider factors like the kind of advice and research tools from the broker, the quality of the digital trading app, and the ability to place trades quickly and reliably, among other details.
  • Strategy: The account you really want will be determined by your personal investment strategy, which includes how frequently you plan to trade and whether you are a beginner or an experienced trader. We looked at how each investing platform tailored its offerings to a specific type of customer.
  • Trading platform: Some online stock brokers have full-featured and complex online stock trading platforms and software available to frequent traders, as well as managed portfolio services such as Robo-advisors. While other stockbrokers take a more simplistic, user-friendly approach. Our choice of the best online brokers for stock trading was made based on the usability, ease of access, and friendliness of the trading platform.

READ ALSO: 15 Best Stocks To Day Trade In 2021 [Updated]

Best Online Brokers for Stock Trading In 2021

Here’s a list of the best online brokers for stock trading in 2021:

1. Fidelity Investments

Fidelity has a solid reputation for providing some of the best research and tools for retirement investors. The information available on its platform, which includes sophisticated screening tools, makes the account a good option for investors looking to delve deeper.

Whether you’re looking for an excellent trading platform, low commissions, or helpful customer support, Fidelity is just the right pick. This online broker does it all well, and it’s a great investor-friendly pick, especially if you’re just starting out, but works well for advanced investors, too.

Pricing: Fidelity dropped its trading commissions to zero, a benefit to all traders, but especially long-term buy-and-hold investors. Fidelity also has zero fees on many other services that other brokers routinely charge for.

READ ALSO: Fidelity Vs Vanguard Investment 2021: Why You Must Choose Any of These Brokerages

2. TD Ameritrade

TD Ameritrade is an amazing online stock broker for investors of all abilities, whether you need guidance and education as you’re starting out or when you’re ready to turn to the broker’s high-powered thinkorswim trading platform. Either way, you’ll likely find what you need at TD Ameritrade.

This online broker for stock trading grants you access to a library of educational content that includes videos, webcasts, and thousands of articles. Yes, that may sound a bit overwhelming, but you can select exactly the information you need, whether you’re a novice or an expert looking for a little extra edge.

On TD Ameritrade, you can buy and sell a range of securities beyond stocks. Bonds, options, and futures are available, and you can also trade cryptocurrency via futures. You can do it all via the broker’s mobile app, too.

Pricing: TD Ameritrade charges no commissions for its stock and ETF trades, and trading options now cost $0.65 per contract, With no account minimums, TD Ameritrade’s an attractive option for beginners.

SEE ALSO: 15 Best Online Stock Trading Platforms In 2021

3. Charles Schwab

Ranked by J.D. Power from 2016-18 as “Highest in Investor Satisfaction with Full-Service Brokerage Firms, Three Years in a Row.”Charles Schwab has a history of helping individual investors.

Overall, the online broker remains a good choice, providing unique trading tools, excellent customer support, and a wide range of research and educational materials, all without charging a commission.

Charles Schwab also has an innovative customer service policy that says clients can get returns on related commissions, a transaction fee, or an advisory program if they feel dissatisfied.

Pricing: Schwab meets the industry standard on stock and ETF commissions – zero – which it helped usher in. Options trades, though, still ring up a $0.65 per-contract fee.

4. Robinhood

Robinhood is a newbie, in the world of online stockbroking. Nonetheless, it has made a quick spray, developing millions of devoted followers for its commission-free trading and user-friendly mobile app.

On Robinhood, you will be able to trade stocks and ETFs for free, as well as options and cryptocurrencies. It also includes a cash management account, allowing you to make a quick transfer whenever you want to trade.

Robinhood’s research tools are less robust (nearly non-existent) than those of other brokers, but you can join their premium tier, Robinhood Gold, for $5 per month and gain access to some research and margin trading. One disadvantage is that, for the time being, Robinhood only offers individual taxable accounts, though it hopes to expand to joint accounts and IRAs in the future.

Pricing: Robinhood offers zero-fee stock and ETF trading, but it is also striving to obstruct the industry and become a platform that offers all kinds of financial products and services. For example, it also offers free trading for options and cryptocurrency.

5. E-Trade

E-Trade is one of the best online stock brokers, offering a solid option regardless of whether you are a passive or active investor, a novice, or an expert. It has an excellent educational section, which includes not only access to educational tools but also a whirlwind of webinars, news clips, and educational videos geared toward investors of all levels. E-Trade also allows users to communicate with E-Trade analysts for up-to-date analysis and commentary that can assist you in developing your trading strategy.

It also offers non-stop phone support and an online chat option. Active traders may appreciate the broker’s flagship trading platform, Power E-Trade, which offers tons of tools and comes in a mobile version, too.

Pricing: Like other significant online stock brokers, E-Trade charges zero commissions for stock and ETF trades and $0.65 per options contract. Traders can receive a discounted commission of $0.50 per contract if they make 30 or more trades each quarter.

6. Interactive Brokers

Interactive Brokers has long been regarded as a brokerage for professionals and active investors, with a strong trading platform and excellent trade execution. However, it has made strides in recent years to become more appealing to newer investors, particularly with a “lite” version of its service that includes no-fee trading. It has also improved its customer service and basic research.

This shift has smoothed out the rough edges of a previously no-frills service that even pros thought had been pared down in favor of low costs and trade execution. A newly designed customer support page is easier to navigate while maintaining the high level of functionality of the old page.

Pricing: Interactive Brokers was a driving force behind the industry’s shift to no-fee stock trading. Its Lite service is free, while its Pro service costs $1 per trade for up to 200 shares, with subsequent shares costing a half-penny each, though volume pricing is also available. Option contracts cost $0.65 per contract, and volume-based pricing is also available for truly active traders.

Read more in Bankrate’s full review of Interactive Brokers.

7. Merrill Edge

Merrill Edge is a full-service online stock broker that provides high-quality tools for traders while also catering to new investors. This is especially evident when you consider that the broker has over 2,000 locations inside parent Bank of America’s branches, making human advisors easily accessible, which is a particularly valuable feature for newer investors in need of guidance. 

You can get detailed research reports on individual stocks if you become a preferred client of the broker, but you can also get research from Morningstar and Lipper. Merrill also excels at educational resources that assist you in planning your financial future. Customer service is available 24 hours a day, seven days a week, so someone is always available to assist you.

Pricing: Merrill Edge charges zero fees for stock and ETF trades, while options trades come in at $0.65 per contract, right in line with most of the industry.

FAQs On Best Online Brokers for Stock Trading

What type of brokerage account should I choose?

Your account choices boil down to a taxable brokerage account versus a tax-favored retirement account, such as an IRA.

Should I just choose the cheapest broker?

Trading costs are certainly important for active and high-volume traders, but many brokers now offer commission-free trades in stocks, ETFs, and options. Other factors, such as access to a diverse range of investments or training tools, may be more valuable than saving a few dollars when purchasing shares.

How quickly can I start trading?

After you’ve opened the account, you’ll need to make a deposit or transfer funds to the brokerage firm, which can take a few days to a week. Once that is completed, it is time to start investing! And by that, we mean taking a deliberate and disciplined approach to long-term investing.

What is the cheapest online stock trader?

When you’re looking for a cheap online stock trader, dig deeper than just stock and ETF trades since all online trading platforms offer these for $0.

Can I buy stocks without a broker?

It is sometimes possible (but usually extremely complicated) to buy stocks without a broker. You will usually need substantial wealth to take advantage of other methods.

Conclusion

Want to trade stocks? You’re going to need an online broker, and that broker should offer a fair investment minimum, high-quality trading tools, robust access to customer service, and no hidden account fees.

References

  • bankrate.com – Best online brokers for stocks in September 2021
  • nerdwallet.com – 11 Best Online Brokers for Stock Trading of October 2021
  • fool.com– Best Online Stock Brokers for October 2021

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