The Ultimate Guide to Choosing the Best Online Brokerages

If you’re thinking about starting to invest, choosing the right brokerage is the first step to ensuring a safe and efficient experience. With so many options available, it’s essential to know what to consider when selecting the ideal platform for your profile.

This article will guide you through different types of brokerages, highlighting those with the lowest fees, best for beginners, day traders, and even options for those concerned with sustainability (ESG).

Let’s dive into the world of brokerages and discover which one is the most suitable for you!

Best Brokerages for Investments

When it comes to investing, choosing the right brokerage can directly impact the return on your assets.

The best brokerages for investments are those that offer a wide range of financial products, from stocks and bonds to real estate funds and ETFs, as well as robust tools for analysis and portfolio management.

Some of the best brokerages include:

• Charles Schwab: Offers a comprehensive platform with a wide range of products and advanced analysis tools.
• Fidelity: Known for its low fees, wide investment offerings, and excellent customer service.
• Vanguard: Ideal for those who want to invest in low-cost funds and ETFs.

Besides checking the products offered, ensure the brokerage provides quality customer support and an easy-to-navigate platform, especially if you’re a beginner.

Brokerages with the Lowest Fees

Fees can eat away at your returns, so brokerages with the lowest fees are an excellent choice for those who want to maximize their gains. Many brokerages now offer zero-commission trading for stocks and ETFs, which has become a strong attraction for investors.

Here are some brokerages known for their low fees:

• Robinhood: Pioneer of zero-commission trading, it’s one of the best options for avoiding fees.
• Webull: In addition to zero commissions, it offers great charting tools for technical analysis.
• Interactive Brokers: Although it has a slightly more complex fee structure, its low commissions and global market access make it an excellent option.

When choosing brokerages with the lowest fees, it’s important to check if the commission waivers also apply to other assets you may want to trade in the future, such as options or mutual funds.

Best Brokerages in the United States

For investors residing in the United States or those looking to access the U.S. market, several well-known brokerages stand out for the security and robustness of their platforms. Some of the best U.S. brokerages include:

Charles Schwab

Discover Charles Schwab, a trusted brokerage known for its comprehensive platform that caters to both novice and experienced investors, offering a wide range of financial products and services.

Coverage: Schwab provides access to stocks, ETFs, options, mutual funds, and more. Its platform is suitable for all types of investors, with educational resources and financial planning tools.

Network: Nationwide access with support for international investing.

Price: $0 commissions on stocks and ETFs; options trading costs $0.65 per contract.

Additional Benefits:

• No account minimums
• Extensive research and educational tools
• 24/7 customer support

Fidelity

Fidelity is a powerhouse brokerage offering low-cost investment options, exceptional customer service, and a variety of financial products for investors of all levels.

Coverage: Fidelity covers stocks, ETFs, mutual funds, bonds, and retirement accounts with a focus on long-term investing.

Network: Available nationwide with broad access to markets and investment resources.

Price: $0 commissions on stocks and ETFs; options trading costs $0.65 per contract.

Additional Benefits:

• Wide selection of commission-free ETFs
• Advanced research tools
• Industry-leading customer service

TD Ameritrade

TD Ameritrade is known for its powerful trading platforms, making it ideal for both beginners and advanced traders looking for extensive market analysis tools.

Coverage: Offers access to stocks, options, futures, forex, and ETFs. Also provides a variety of educational resources for new investors.

Network: Available across all 50 states with global market access.

Price: $0 commissions on stocks and ETFs; $0.65 per options contract.

Additional Benefits:

• Thinkorswim platform for advanced trading
• No account minimums
• 24/7 customer support

E*TRADE

E*TRADE offers an intuitive platform for both casual and active investors, known for its user-friendly tools and extensive investment options.

Coverage: E*TRADE supports stocks, options, futures, ETFs, and bonds. It also offers specialized accounts like retirement and managed portfolios.

Network: Available nationwide with robust mobile and desktop platforms.

Price: $0 commissions on stocks and ETFs; options trades at $0.65 per contract.

Additional Benefits:

• No account minimums
• Extensive range of mutual funds
• Excellent mobile trading experience

Robinhood

Robinhood is famous for revolutionizing commission-free trading, offering a simple, easy-to-use platform for new investors to trade stocks and cryptocurrencies.

Coverage: Focuses on stocks, ETFs, options, and cryptocurrencies, all with zero commissions.

Network: Nationwide access with mobile-first trading experience.

Price: $0 commissions on trades; no hidden fees or account minimums.

Additional Benefits:

• Fractional shares trading
• Cryptocurrency trading
• Streamlined mobile app

Interactive Brokers

Known for its advanced trading tools and access to global markets, Interactive Brokers is a favorite among professional and international investors.

Coverage: Offers access to stocks, options, futures, forex, and more, across international markets. It’s a go-to for advanced traders.

Network: Global coverage, offering access to over 135 markets worldwide.

Price: Low trading fees with options at $0.65 per contract; tiered pricing available.

Additional Benefits:

• Advanced trading platforms (IBKR Pro and Lite)
• Access to global investments
• Low margin rates

Merrill Edge

Merrill Edge, a division of Bank of America, is ideal for investors seeking seamless integration between banking and investing, with strong research tools.

Coverage: Provides access to stocks, ETFs, options, mutual funds, and retirement accounts.

Network: Nationwide, with exclusive benefits for Bank of America clients.

Price: $0 commissions on stocks and ETFs; options trading at $0.65 per contract.

Additional Benefits:

• Integration with Bank of America
• Preferred Rewards program with benefits for customers
• Excellent research and analytics tools

Webull

Webull is an app-based brokerage that offers commission-free trading with an emphasis on charting tools and advanced analytics, suitable for active traders.

Coverage: Focuses on stocks, ETFs, options, and cryptocurrencies with zero commissions.

Network: Nationwide access with a sleek mobile and desktop trading experience.

Price: $0 commissions on stocks and ETFs; options trading at $0.65 per contract.

Additional Benefits:

• In-depth charting and technical analysis tools
• Paper trading feature
• No account minimums

SoFi Invest

SoFi Invest is a beginner-friendly platform offering commission-free trading, automated investing, and the ability to buy fractional shares.

Coverage: Supports stocks, ETFs, and cryptocurrency trading, as well as access to automated investing and retirement accounts.

Network: Nationwide, with a focus on financial education and personalized advice.

Price: $0 commissions on trades with no account minimums.

Additional Benefits:

• Automated investing options
• Fractional shares available
• Access to financial advisors

Vanguard

Vanguard is renowned for its low-cost index funds and ETFs, making it a popular choice for long-term investors focused on building a diversified portfolio.

Coverage: Specializes in low-cost ETFs, mutual funds, and index funds, with a focus on retirement planning.

Network: Available nationwide, with a strong emphasis on passive investing strategies.

Price: $0 commissions on stocks and ETFs; very low expense ratios for mutual funds and ETFs.

Additional Benefits:

• Industry-leading low-cost funds
• Strong focus on retirement accounts
• Comprehensive portfolio management tools

These brokerages are excellent choices for those looking for security, a diverse range of products, and a good user experience.

Cryptocurrency Brokerages

The cryptocurrency market is growing rapidly, and finding the right brokerage to trade these digital assets is essential to ensure security and competitive fees. The most popular cryptocurrency brokerages include:

• Coinbase: One of the most popular platforms, known for its ease of use and the large number of cryptocurrencies available.
• Binance US: Offers a wide range of cryptocurrencies along with competitive fees.
• Kraken: Respected for its robust security and advanced trading tools.

When choosing a cryptocurrency brokerage, ensure it has a strong security track record, offering measures like two-factor authentication and cold wallets (offline storage) to protect assets.

Brokerages for Day Trading

If your interest lies in making multiple trades per day, brokerages for day trading need to offer fast execution, technical analysis tools, and low fees to avoid affecting your profitability. Some of the best brokerages for day traders include:

• Interactive Brokers: Offers fast execution and robust tools for active traders.
• Lightspeed: Specifically designed for high-frequency traders, with competitive commissions.
• TradeStation: Known for its advanced trading platform and support for professional traders.

Choosing a brokerage for day trading should consider both execution speed and the quality of technical analysis tools.

Brokerages for Beginners

Beginners in the world of investing need simple platforms with educational resources and accessible support. Brokerages with these features help investors understand the market and build confidence. Some recommended options are:

• Fidelity: Offers a great combination of customer support and educational materials.
• Robinhood: Simple and intuitive, ideal for those taking their first steps.
• Acorns: Perfect for those who want to start small, investing spare change through micro-investments.

Brokerages for beginners should offer simplicity without compromising access to information and tools that help investors grow in the market.

International Brokerages

If your goal is to diversify investments globally, you’ll need brokerages that offer access to international markets. Some of the best international brokerages are:

• Interactive Brokers: Offers access to dozens of global markets with competitive commissions.
• Saxo Bank: Perfect for high-net-worth investors looking to diversify globally.
• eToro: In addition to stocks, it allows investing in cryptocurrencies and other global assets.

For international investing, it’s essential to check exchange fees, regulations in each country, and the brokerage’s product offerings.

Brokerages with Fractional Shares

Investing in fractional shares is a great way to start with small amounts of money, allowing you to buy parts of shares in large companies. Some brokerages that offer this service include:

• Robinhood: Pioneer in fractional share investing in the U.S.
• Fidelity: Allows you to invest in fractions of shares as easily as whole shares.
• SoFi Invest: Offers the ability to invest in fractions of shares from large companies with zero commissions.

This type of investment is ideal for those who want to start small but still gain exposure to large, reputable companies.

Security in Online Brokerages

Security is one of the most important factors when choosing a brokerage. With the increase in cyber threats, brokerages must ensure their clients are protected through robust measures. When evaluating a brokerage’s security, look for:

• Two-factor authentication (2FA).
• Insurance against losses due to hacks.
• Encryption of sensitive data.

Brokerages like Charles Schwab, Fidelity, and TD Ameritrade have a solid track record in online security, offering multiple layers of protection for their clients.

Brokerages with ESG Products

Investing with purpose is becoming increasingly important, and brokerages that offer ESG (environmental, social, and governance) focused products are attracting conscious investors. Some brokerages that offer these products include:

• Vanguard: Offers a wide range of ETFs and funds focused on sustainable practices.
• Betterment: Provides personalized portfolios with an emphasis on sustainable investments.
• Fidelity: Also offers a growing selection of ESG investment products.

These products allow you to invest in companies committed to ethical and sustainable practices, helping promote a better future while building your portfolio.

Choosing the right brokerage can make a big difference in the success of your investments. Consider your needs, the type of investments you plan to make, and, of course, the costs involved.

With the right information, you’ll be on your way to a safer and more profitable investing experience.