Picking the best online brokerage platform isn’t always intuitive. With so many competitors vying for your business, research is important.
To determine the best online brokerage platforms in 2024, we assessed 19 brokerage firms based on their offerings from advisory services, education/research tools, insurance coverage, features, portfolio analytic capabilities, trading costs and margin rates to customer service and security.
Our best online brokers and trading platforms
- E-Trade.
- Fidelity.
- Interactive Brokers.
- Charles Schwab.
- Merrill Edge.
- Ally Invest.
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Why trust our investing experts
Our team of experts evaluates a multitude of investing products and analyzes a host of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 19 brokerages reviewed.
- 74 data points analyzed.
- 3-step editorial review.
- 5-step fact-checking process.
E-Trade
Blueprint Rating
Account minimum
$0
Commission-free stock, ETF and options trading
Yes
What you should know
The earliest online brokerage platform still reigns supreme as a good option for long-haul investors and stock and options traders. E-Trade’s zero-commission stock, ETF, and options trades are major draws for many retail investors.
If you’re a budding investor, you can browse E-Trade’s large compendium of educational articles, videos, webinars, and research on all aspects of investing.
Even if you’re more experienced, you will find value in E-Trade’s tools, which include a portfolio builder, paper-trading simulator, backtesting software and a comprehensive set of screeners. E-Trade offers a low fee structure and 24/7 customer service via phone, email and live chat. E-trade also has a mobile app (available on Android and iOS) for trading if you want to invest on the go.
Prospective customers should note that Morgan Stanley acquired the broker in October 2020.
Pros and cons
Pros
- No minimum account requirements.
- No account inactivity or closure fees.
- Free domestic wire fees and ACH deposits.
Cons
- No fractional shares.
- No international stock trading.
- No forex trading.
Fidelity
Blueprint Rating
Account minimum
$0
Commission-free stock, ETF and options trading
Yes
What you should know
Beyond its suite of low-cost mutual funds and ETFs, Fidelity offers a renowned and popular brokerage service, available via its web-based platform or mobile app.
Like many of its top competitors, Fidelity offers zero-commission stock, ETF and options trades. But it also offers the ability to easily purchase units in a wide range of mutual funds, several of which offer no transaction fees or sales loads. If you’re just looking to invest a small amount in an expensive stock, Fidelity offers fractional shares.
Overall, Fidelity stands out for its commitment to investor education, with a wide range of resources, notably courses, webinars, coaching services, and research for beginner and advanced investors alike looking to increase their knowledge.
Pros and cons
Pros
- Offers fractional shares and cryptocurrency trading.
- Comprehensive educational resources are available.
- No account minimums, inactivity fees, account transfer or wire fees.
Cons
- Doesn’t offer forex or futures trading.
- Doesn’t have customer support via email.
- High broker-assisted trade commission fee, charging $32.95 per trade.
Interactive Brokers
Blueprint Rating
Via InteractiveBrokers' Secure Website
Account minimum
$0
Commission-free stock, ETF and options trading
Yes
What you should know
Interactive Brokers, which often goes by the name of IBKR, distinguishes itself by catering effectively to beginner, intermediate and advanced traders alike. Those starting their investing journey will enjoy IBBR Lite, which offers unlimited free trades of stocks, ETFs and other assets on a fixed-pricing model. For advanced investors, IBKR Pro is available, which offers more competitive tiered pricing on a wider range of tradable securities, including options, futures, forex, and bonds, in addition to improved margin rates and interest paid on cash balances.
If you’re a pro trader, IBKR offers a highly advanced and technical IB Trader Workstation, known as its TWS platform. The brokerage recently improved its offerings on the mobile end by launching GlobalTrader, a visually intuitive and simple-to-use mobile app.
If you’re looking to beef up your investing knowledge or tweak your stock portfolio, IBKR offers comprehensive educational resources like its Traders Academy online courses and paper trading simulators.
Pros and cons
Pros
- Low margin interest rates of 6.58% for up to $100,000.
- No account minimums, ACH deposit/withdrawal, account transfer, or domestic wire fees.
- The widest range of offerings from bonds, mutual funds, forex, futures, fractional shares and crypto to international stocks.
Cons
- Lacks 24/7 customer service support.
- No in-house research.
- No advisory services.
Charles Schwab
Blueprint Rating
Account minimum
$0
Commission-free stock, ETF and options trading
Yes
What you should know
Charles Schwab’s customers benefit from the platform’s long list of features, which range from robo-advisor and cash management services to numerous educational and research resources and no minimum account requirements or inactivity fees. Schwab pretty much offers trading in most asset types except for forex and cryptocurrency.
The platform’s zero commissions on equities, ETFs and fractional shares allow you to adjust and diversify your holdings without friction. This helps level the playing field for portfolio management. The broker offers a total of three platforms: a web-based platform, a mobile app and its proprietary trading software StreetSmart Edge.
Pros and cons
Pros
- No minimum account requirement, account transfer, maintenance or inactivity fees.
- Offers robo-advisory, cash management, and professional advisory services.
- Offers mutual funds, bonds, futures, international stocks and fractional shares.
Cons
- No forex or cryptocurrency trading.
- No email-based customer support.
- Doesn’t offer a “paper trading” simulator.
Merrill Edge
Blueprint Rating
Account minimum
$0
Commission-free stock, ETF and options trading
Yes
What you should know
Launched in 2010 after Bank of America acquired Merrill Lynch, Merill Edge offers the usual gamut of commission-free stock, ETF, and options trades, along with no account minimum requirements.
But, the firm is an especially suitable pick if you appreciate comprehensive research offerings and advisory services. Merrill Edge benefits from the experience and knowledge of not only its in-house team of professional market analysts from Bank of America Global Research but also offers access to external reports from firms like Morningstar and CFRA.
If you’re looking for a hands-off portfolio, the platform offers both robo-advisor and professional financial advisor services. Merrill also excels in terms of its customer service, with 24/7 support available via phone, email, and live chat.
Pros and cons
Pros
- Offers robo-advisory, cash management, and professional advisory services.
- A wide range of educational and research resources.
- No account minimum requirements, inactivity fees, and free ACH deposits/withdrawals.
Cons
- It does not offer forex, futures, international stocks, fractional shares, or cryptocurrency.
- The platform charges $25 on domestic/international wire fees.
- Idle cash balances won’t earn much at 0.01%.
Ally Invest
Blueprint Rating
Account minimum
$0
Commission-free stock, ETF and options trading
Yes
What you should know
For those looking for simplicity and low costs, Ally Invest could be a great online brokerage pick. In addition to the usual zero-commission stock, bond, and options trades and lack of minimum account requirements, the firm also charges a lower options fee of $0.50 per contract.
If you find yourself making frequent options trades, moving to Ally Invest could save you big bucks long term. In addition, if you’re interested in penny stocks, Ally Invest is a great choice. The platform charges zero fees for over-the-counter, or OTC stock trades. But there are caveats: The platform requires a minimum opening purchase of $100 along with an additional $0.01 per share plus a $4.95 base commission on any equity priced less than $2. (Other rules apply if the value of the order is less than the base commission.)
If you want concierge-like treatment, Ally Invest will help you execute trades cheaply as it charges no commissions for broker-assisted trades. You can also gain access to a wide range of mutual funds with no transaction fees or sales loads. Now the bad news. The platform provides no in-house research and only offers access to third-party resources.
Pros and cons
Pros
- Lower options fee per contract of $0.50.
- No OTC stock fee (subject to restrictions) or broker-assisted trade commission.
- No account minimum requirements, inactivity fees, and free ACH deposits/withdrawals.
Cons
- Does not offer international stock, futures, cryptocurrency, or fractional share trading.
- Does not offer in-house research services and reports.
- Charges $50 account transfer and $30 domestic/international wire transfer fees.
Compare the best online brokers
| BROKER | COMMISSION-FREE STOCK, ETF AND OPTIONS TRADING | PER CONTRACT OPTIONS (FEE) | FRACTIONAL SHARE TRADING |
|---|---|---|---|
E-Trade | Yes | $0.65 | No |
Interactive Brokers | Yes | $0.65 | Yes |
Fidelity | Yes | $0.65 | Yes |
Charles Schwab | Yes | $0.65 | Yes |
Merrill Edge | Yes | $0.65 | No |
Ally Invest | Yes | $0.50 | No |
Methodology
We have reviewed and researched some of the largest online brokerages available in the U.S. to rank the best ones available on the market today.
For our rankings, we sent a digital survey, consisting of 74 queries, to each company we reviewed. Our researchers verified the survey data and confirmed any missing data points by contacting each company directly and via online research.
Among all the brokerages considered, the seven that made our list excelled in areas across the 11 major categories (with weightings): range of offerings (13.2%), trading costs (12.5%), account minimum and fees (12.5%), features (11.8%), advisory services (10%), insurance (10%), customer service (10%), education/research (7.5%), security (5%), margin interest rate and cash interest (5%) and portfolio analysis (2.5%).
Within each major category, we considered several subcategories, combining them to give an overall score for that category, which we then weighted to calculate an overall ranking of the exchanges.
Data points were scored on a 0.00 – 1.00 scale. The top raw score was 0.82 and was curved to a 5-star rating as the highest possible score.
For scoring the range of offerings, we looked at whether the brokerage offered the following: stocks, bonds, mutual funds, exchange-traded funds, options, forex trading, futures, international stocks, fractional shares, cryptocurrency and over-the-counter stocks.
Trading costs, such as commissions, were scored on a comparative scale. The following variables were scored for trading costs:
- Stock commission.
- ETF commission.
- Options commission (discounts for options trading).
- Futures commissions (fee to open/close).
- Over-the-counter stock fees (minimum balance required).
- Broker-assisted commission.
For the account minimum and fee category, we assessed:
- New account bonuses.
- Free ACH deposits/withdrawals.
- Inactivity fee.
- Account closure fee.
- Transfer account fee.
- Domestic wire fee.
- International wire fee.
- Deposit with a bank card.
The insurance category reviewed whether the brokerage has Federal Deposit Insurance Corporation (FDIC) and Securities Investor Protection Corporation (SIPC) protections, additional asset protections as well as additional insurance.
Why other online brokers didn’t make the cut
The online brokerage platforms that failed to rank high enough usually lacked services and offerings as comprehensive as those that made the list. For instance, some did not offer bonds, mutual funds, options, futures, forex, international stock, crypto, or fractional shares trading.
Other brokerage platforms fell short of our rankings due to a relative lack of value-added features, such as advisory services (e.g., robo-advisors, cash management, or professional advisors) or educational and research resources.
Lastly, some brokerage platforms charge higher trading commissions and fees than others. Since many platforms now offer zero commissions on stock, ETF and options trading, firms that charge for those basic services ranked lower in our methodology. Firms that assessed higher fees for services like account closure, transfers, deposits, and inactivity received lower scores.
Final verdict
The best overall online brokerage platform of 2024 is E-Trade, topping the rankings as the No. 1 online brokerage, according to our methodology.
Despite not offering fractional share trading, E-Trade more than makes up for it with a wide range of offerings, broad advisory services, a focus on educational and research resources, and value-added features like a portfolio builder, paper trading simulator, and backtesting tools.
Most of all, E-Trade boasts no commissions for stocks, ETFs, or options, and assesses no fees for account minimums, ACH deposits and withdrawals, inactivity, domestic wire transfers, deposits with a bank card, or account closure.
Stock market outlook for 2024
The S&P 500 entered bull market territory in June 2023 after gaining more than 20% from its October 2022 lows. Since World War II, the average S&P 500 bull market has lasted more than five years, according to LPL Research.
Jeffrey Buchbinder, chief equity strategist for LPL Financial, said history suggests 2024 could be a good year for stocks.
“The average gain in the second year of a bull market at 12.9% suggests stocks may be poised to add to this year’s solid gains in 2024,” Buchbinder said.“We think this bull market still has a way to go and won’t be derailed by a (potentially) mild, short recession over the next year.
Analysts project 12.2% earnings growth and 5.6% revenue growth for S&P 500 companies in 2024. Fortunately, analysts see positive earnings and revenue growth for every market sector this year.
How does an online broker work?
An online broker is a digital platform that allows individual investors to buy and sell various securities like stocks, bonds, mutual funds, ETFs, derivatives and more.
Unlike traditional brokerages, which typically involve advisors, online brokerages are self-service platforms where the individual is responsible for making their own investment decisions.
In addition to trade execution, online brokerages often offer portfolio management tools, research reports and educational resources to help you make informed decisions.
Although they’re designed for self-service, most platforms also provide some level of customer support through chat, email or phone. They may charge fees for trading, account maintenance, or other services, although some platforms now offer commission-free trades.
Online brokerages are regulated by financial authorities, providing a layer of investor protection. However, the responsibility for investment decisions lies solely with the individual, making it essential to be well-informed and cautious when picking the right one.
How to buy and trade stocks online
To buy and trade stocks online, you first need to open an account with an online brokerage, which typically requires identification and financial documents for verification. Once logged in, you can then browse or search for the stock you wish to buy using its ticker symbol or company name.
You’ll typically have the option to place different types of orders, such as market orders, which buy the stock at the current market price, or limit orders, which only execute the trade at a specific price or better. After selecting your desired stock and order type, you confirm the purchase, and the platform handles the rest, including executing the trade and updating your portfolio holdings.
When trading, it’s crucial to be aware of possible fees, although some platforms offer commission-free trading options. Keep in mind that not all brokerages will offer the same access to all asset classes, so be aware of possible trade restrictions.
While online brokerages are regulated by financial authorities, the onus for making wise investment decisions falls solely on you. So, it’s essential to do your due diligence and consider consulting financial advisors or conduct thorough research before making any trades.
Frequently asked questions (FAQs)
In theory, you can buy shares without a broker-dealer through transfer agents like Computershare via the Direct Registration System. But this approach tends to be less intuitive, responsive, and cost-effective than purchasing shares via a broker.
For ease of trading, an online brokerage platform remains the best option for the average retail investor looking to buy and sell stocks with minimal fuss.
If an online brokerage platform fails, the stocks you hold still belong to you. In this case, the SIPC will step in and guarantee your investment up to a certain threshold.
Currently, the SIPC insurance limit is up to $500,000 per account, which includes a $250,000 limit on cash deposits. But you’ll need to keep in mind that the SIPC cannot reimburse you for losses due to poor investment decisions or bad advice. SIPC protection only kicks in if a broker becomes insolvent.
When choosing the best online broker for your needs, it’s essential to weigh various factors tailored to your objectives, financial circ*mstances, and degree of knowledge and familiarity with the markets.
Factors to assess include the fees charged, the types of assets you can trade, the user interface, the availability of educational resources and the accessibility of customer support.
There are also some universal factors to consider. For example, a good broker should offer a transparent fee structure, a wide range of trading options and a user-friendly interface. If you’re new to investing, you might also appreciate a platform that offers robust educational materials.
Finally, ensure that the broker is regulated by a reputable financial authority to provide a layer of protection for your investments and has not suffered a history of regulatory failures or cybersecurity incidents.
You can buy stocks online without a broker using the Direct Registration System (DRS). In this approach, you become a registered shareholder of the company, holding your shares directly rather than through a brokerage account. The shares are managed by a transfer agent on behalf of the company and held in your name.
While DRS allows you to bypass brokerage fees, it does have some limitations. For instance, not all companies offer this service, and the process can be more complex than using a broker. You also won’t have access to various research tools, educational materials or real-time trading brokers offer. Furthermore, orders may be processed on a less frequent basis, such as daily or weekly, rather than in real-time.
Several online brokers offer trades with no commissions. These platforms typically generate revenue through other means like payment for order flow, margin lending or offering premium services. While the absence of trading fees can be attractive, it’s important to understand any other associated costs or limitations.
Before choosing a broker, always read the fine print and consider the overall value proposition, including available tools, educational resources, and customer service, before selecting a broker. Finally, these brokers may limit commission-free trades to certain asset classes, such as stocks or ETFs only.
