Best Online Stock Brokers for 2021
If you want to build your savings, manage your investments, or engage in the daily activities of huge companies like Apple, Google, and Tesla, you need the best online stock brokers. But how do you know which these are?
That’s where we step in. After testing hundreds of online stock brokers using their own funds, our experts created this list of the very best. These online brokers offer excellent investment and trading opportunities, solid licenses, fair fees, outstanding trading platforms, and valuable research tools. Check them out below.
Summary of Best Online Brokers for Stock Trading for May 2021
Best Online Stock Brokers – Our Expert Picks
This year, we tested over 100 of the best online stock brokers using our precise methodology. We opened live accounts with each broker and made a series of investments and trades. Whilst doing so, we analyzed the experience against 200 criteria points in 10 key categories.
We’ve completed hours of research, so you don’t have to. Register with one of our best online stock brokers below.Learn more about our best online stock brokers and compare them here.
Why Use an Online Stock Broker in 2021?
The best online stock brokers allow you to join the ranks of professional traders, straight from the comfort of your own home. Over 14 million US households are now members of an online trading service. Why is it so popular? Check out the benefits you could gain:
- Lower Fees – Traditional brokers or financial advisors cost a lot of money. They charge management fees, take a percentage of your portfolio, or expect an hourly wage. In contrast, online stock brokers only usually charge you when you trade, and some don’t even do that.
- More Control – With an online stock broker, you can trade whatever you want in seconds. There’s no need to meet your broker in person, nor must you ever wait for them to be available to place your orders. You also won’t feel any pressure to trade more or less frequently than you’d like to.
- Learn How to Trade – Thanks to the range of tools provided by online stock brokers, you can use them to learn how to trade for yourself. Plus, by eliminating the middleman, you’ll soon become skilled at identifying profitable trading opportunities.
- Monitor Your Positions from Home – The best online stock brokers offer advanced trading platforms that allow you to see how your money is performing in real-time. You can log in to your account whenever you like, from your phone or computer, to see if your trades are making gains or losses.
- Avoid Biased Decisions – Once you’re in control of your own trading activity, you can avoid brokerage bias. Bias is when a traditional broker gives you financial advice that benefits them more than it does, such as investing more or investing in specific stocks.
How We Choose Our Best Online Stock Brokers
When we recommend online stock brokers, we do so by using a tried and tested method that considers over 200 different criteria. We update both our methodology and our list of the best online stock brokers regularly, to ensure that we always hold them to the highest standards. We also emphasize the things we know are most important to traders like you, such as:
- Safety and Regulation – All of our best online stock brokers offer regulation from top-tier authorities such as the SEC, CFTC, FINRA, and SIPC. They should also have a clean reputation and provide you with fund protection measures such as segregated accounts and investor compensation. We also look for a banking background or a stock exchange listing.
- Advantageous Trading Conditions – Any online stock broker featured on this page must offer trading conditions that are beneficial, no matter how much or how often you wish to trade. We search for those with accessible minimum deposit amounts and transparent execution policies.
- High-Quality Trading Platforms – A broker must offer you an easy-to-use and efficient trading platform, or else you may as well opt for a traditional stockbroker. All of our top online brokers offer excellent proprietary platforms or industry-leading third-party software, such as Thinkorswim or MetaTrader 5.
- Easy Deposits and Withdrawals – As one of the main benefits of online stock brokers is that you needn’t worry about transaction delays, we only look for firms that offer efficient payments. This includes processing wire transfers quickly, accepting e-wallets, and keeping transaction costs low.
- Low Commissions – To make sure you’re getting a fair deal, we analyze each online stock broker’s fees. We consider the minimum commission charged per US and European stock traded, and the mutual fund and bond trading fees too. We also ensure that the broker has competitive account and inactivity fees.
- Diverse Markets and Products – Whilst you may only want to trade or invest in stocks for now, the very best online stock brokers will provide you with extra ways to diversify your portfolio. Our expert picks offer products such as stocks, penny stocks, mutual funds, ETFs, and even retirement advice. They may also allow you to trade forex and options.
- Industry-Leading Resources – We consider the research tools and kinds of advice an online stock broker will give you, so you don’t have to. We also test the broker’s mobile app and educational materials.
We Help You Keep Your Trading Fees Low
At BrokersOnline, we understand that your money is important. You don’t want to pay expensive fees to trade or invest, nor should you have to. Unlike other broker recommendation sites, our methodology ensures that only online stock brokers with competitive fees make it to this page.
Besides checking that all of our best online stock brokers offer fair fees, we also arm you with the knowledge you need to compare these charges yourself. Whether you’re concerned about commissions, margin rates, annual maintenance fees, or non-trading charges, we’ll show you what you should expect.
Which is the Best Online Stock Broker for Beginners?
While every trader should be particular when choosing the best stock broker for them, it’s even more important if you are new to trading or investing in stocks. If you don’t have the right tools, you’ll find it difficult to learn how to trade stocks online.
The best online stock brokers for beginners boast accessible minimum deposit limits, intuitive trading platforms, educational resources, and a plethora of market research tools. They’ll also offer a transparent pricing structure that’s easy to understand.
Luckily for you, our experts consider traders of all skill levels when making their list of the best online stock brokers. Besides testing all the broker’s learning materials, they also award extra points to those that offer interactive content, webinars, and videos. Our recommendations always help you take your trading to the next level.
What Do You Need to Trade Stocks Online?
Before you embark on your stock trading journey, there are a few things you need to arm yourself with. These include:
- Knowledge of what a stock broker is, and what they can do for you
- A stock trading plan that considers what, and how often, you want to trade
- The right brokerage account for your needs
- A firm understanding of what fees you will need to pay
Luckily, our experts are here to help you. In the following sections, you can learn more about each of our top three prerequisites for stock trading.
What Is an Online Stock Broker?
If you want to buy shares in Apple, you cannot simply call up Tim Cook and ask for a slice of the action. Similarly, in the US, individuals cannot buy stocks via stock market exchanges. To do so, you need a stock broker.
Stock brokers are licensed companies that can make trades for you. Depending on what you want from your broker, they either allow you to buy company shares directly or connect you with a liquidity provider. A liquidity provider is a large financial firm that owns a pool of shares or securities.
Online stock brokers, as the name suggests, are firms that allow you to complete this process via the internet. They provide you with trading platforms to request purchases and an array of tools to help you make educated decisions about when to buy and sell.
How Do Brokerage Accounts Work?
When you visit one of our best online stock brokers, you’ll soon realize there are plenty of different brokerage accounts to choose from. Don’t let this overwhelm you. Each suits a different trader, and we’re here to help you decide which is best for you.
Traditional Brokerage Accounts
A traditional brokerage account allows you to buy and sell stocks, invest long term, and set aside and grow savings. At the best online stock brokers, you may also expand into other assets, such as ETFs, gold, and indices. Traditional banks and big Wall Street names provide these types of accounts, such as Fidelity, E-Trade, and TD Ameritrade.
Share/Stock Trading Accounts
An online stock trading account may be right for you if you’re an active investor, wanting to own the underlying assets. If you’d rather trade frequently, and don’t want to hold your stocks for a long time, these accounts are beneficial as they offer low commission rates and low maintenance fees. The likes of IG and eToro provide trading accounts.
CFD Stock Trading Accounts
Some of the best online stock brokers allow you to trade Contracts for Difference (CFDs). With these accounts, you never own the underlying stocks. Instead, you profit from the difference in price of the stock from when the contract opens to when it is closed. Stock CFD accounts provide you with leveraged trading opportunities and small fees.
IRA accounts are perfect if you’re already thinking about your retirement plans. Like brokerage accounts, IRAs allow you to invest in stocks, ETFs, and funds. The main difference, however, is that these accounts allow you to build tax-free or tax-deferred funds. It’s important to note that, as IRA accounts are meant for long-term investments, they may come with high withdrawal fees. In addition, you may need to pay income tax on any money you cash out early.
What Broker Fees Will I Pay?
Our experts evaluate commission levels to find the most beneficial stock trading brokerage firms. Whilst most of our best online brokers have low fees, it’s important to know which fees you should expect to pay as, unfortunately, you can’t avoid them all.
You can divide online stock broker fees can into two categories: trading and non-trading fees.
- Trading commissions – You need to pay these each time you place a trade, whether it’s stocks, ETFs, or options. Whilst most of the best online brokerages do offer commission-free trading opportunities, it usually depends on the assets you’re trading. For instance, US stock commissions are often cheaper than European ones.
- Broker assisted trade fees – If you cannot place a trade online, you can phone the broker to place your order for you. For this, you will pay an assisted trade fee. These fees are uncommon and only occur when you don’t have access to the internet, or if you want to buy or sell a rare stock.
- Mutual fund fees – Although most mutual fund trades don’t carry commissions, an online broker may charge you a transaction fee. These fees can range from around $10 to $70. To avoid mutual funds fees, you can trade with an NTF (No Transaction Fee) broker. Do note, however, that these brokers can charge early redemption fees if you sell the fund quickly after buying it.
- Overnight financing fees – You will incur this fee if you trade stock CFDs and keep your positions open overnight. The fee represents the cost of borrowing or lending the stock. Brokers will debit your account if you take a long position, or credit your account for a short position, based on the interbank rate.
- Brokerage account fees – These fees encompass account maintenance and inactivity fees. Put simply, sometimes you must pay the broker to keep your account in check. Additional brokerage fees may include subscriptions to premium tools or advice. Fortunately, you can avoid most of these by choosing one of our best online stock brokers.
- Deposit and withdrawal fees – Whilst many online stock brokers do not charge for deposits, they do sometimes charge for withdrawals. The fee can depend on your selected payment method, and the broker will usually charge it as a percentage.
We created BrokersOnline to give expert recommendations to prospective stock traders. We believe that stock trading should be accessible, easy to understand, and fair. That’s why our advice is objective, data-driven, and unrestricted.
So we can keep providing you with free content, our partners compensate us. Whilst this may influence which products we review and feature, our partners cannot pay to change our opinions, ratings, or advice. We ground all of this in research and facts, so we never guarantee our partners a favorable review. Moreover, our reviewers do not have access to our advertising data or campaign planning.