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Stock Market The best online brokers for free stock trading


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Stock Market The best online brokers for free stock trading

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.Best online brokers for free stock tradingThe best online brokerages for free stock trading typically offer…

Stock Market The best online brokers for free stock trading

Stock Market

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

Stock Market Best online brokers for free stock trading

The best online brokerages for free stock trading typically offer $0 or low account minimums, commission-free trading, investment education and/or market research, and customer support. 

When compiling our top picks, we also considered fees, investment choices, account types, and trading platforms. 

Our expert panel for this guide

We consulted financial planners, investing experts, and our own wealth-building reporter to inform our picks for the best online brokers for free stock trading.

Stock Market PFI Best Stock Trading Apps Expert Panel
Insider


We’re focusing on what makes an

online brokerage
account most useful. When comparing an app, it’s best to consider fees, account types, investment choices, and investment research and education resources.

Stock Market Best overall: Fidelity

Why Fidelity made our list: Fidelity offers several investment products that cater to both active traders and passive investors. Like many of the brokerages on this list, it offers commission-free trading on stocks, ETFs, and options. But unlike the other brokerages mentioned below, Fidelity offers a considerably unique product: Zero

Expense Ratio
Index mutual funds

Like the name suggests, Fidelity’s Zero Expense Index Funds are free of account minimums and expense ratios. In other words, you’ll only have to pay for shares. Fidelity offers four primary index funds: Fidelity® ZERO Large Cap

Index Fund
(FNILX), Fidelity® ZERO Total Market Index Fund (FZROX), Fidelity® ZERO Extended Market Index Fund (FZIPX), and Fidelity® ZERO International Index Fund (FZILX).

The brokerage also offers more than 3,400 mutual funds and more than 7,000 stocks and ETFs. If you’re big on research access, Fidelity utilizes investment research from Thomson Reuters StarMine, and other sources. 

If you’re a passive or hands-off investor, Fidelity has multiple options for you. Its automated investment account, Fidelity Go, creates and manages an investment portfolio for you. The other option is Fidelity Personalized Planning and Advice. These accounts also offer automated investment management, but they give you one-on-one human advisor access as well. 

What to look out for: One thing to keep in mind is that, if you’re an automated investor, Fidelity Go charges more for higher account balances. For instance, Fidelity Go charges $0 for account balances under $10,000. You’ll pay $3 per month if you have between $10,000 and $49,999. If you’ve got over $50,000, you’ll pay an annual fee of 0.35%. 

Stock Market Best for fee-free active trading: Firstrade

Why Firstrade made our list: Firstrade is an online discount brokerage offering a variety of wealth-building products for active traders. The investment app stands out due to three key qualities: Firstrade offers US trading and international trading in more than 65 regions, it offers a Chinese language support option for Chinese-speaking investors, and most of its investment products are free.

Firstrade charges no fees for stocks, ETFs, options and mutual funds. The investment app also charges $0 for options contracts (most investment apps charge $0.50 or $0.65 for options contracts). 

Firstrade also has no shortage of investment research and trading platforms. It offers free market research from Morningstar, Benzinga, Zacks, and Briefing.com. In addition to its web and mobile platforms, Firstrade also gives you more trading flexibility with its Options Wizard and Firstrade Navigator tools. 

Firstrade currently offers more than 11,000 mutual funds and more than 2,200 commission-free ETFs

What to look out for: Firstrade is best for active traders who prefer to handle investment transactions and research on their own. The brokerage isn’t the best option for you if you’re looking for automated or advisor-assisted accounts.

Stock Market Best all around: Charles Schwab

Why Charles Schwab made our list: If you’re set on stock trading, Charles Schwab is another competitive choice. The brokerage’s combined offering of commission-free accounts, low-cost automated accounts, and IRAs make it an attractive option for all types of traders and investors.

You’ll also have access to several types of investments, including stocks, ETFs, options, mutual funds, and more. Like Fidelity, Schwab also offers several of its own index mutual funds, but these funds have slightly higher expense ratios. 

Schwab’s two automated accounts — Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium — are best for hands-off investors. Schwab Intelligent Portfolios invests your money in a diversified portfolio of ETFs. The automated account also regularly monitors your portfolio’s performance and rebalances the account when necessary.

Schwab Intelligent Portfolios Premium has a higher minimum requirement ($25,000) and annual fee, but it merges automated investing and one-on-one advice from a certified financial planner (CFP). 

This brokerage also offers several investment education and market research resources. Schwab has a knowledge center that provides informational articles on all areas of financial planning. It also offers market insights and live webcasts and programs on investing. 

What to look out for: Keep in mind that you’ll need at least $5,000 to use Schwab’s Intelligent Portfolios automated account. If you want one-on-one access to a human advisor, you’ll need at least $25,000.

Stock Market Best for low-cost trading and automated investing: Merrill Edge

Why Merrill Edge made our list: Like Fidelity, Merrill Edge caters to all types of investors. The brokerage offers commission-free trading on stocks, ETFs, and options. And due to its affiliation with Bank of America, BOA users can integrate personal bank accounts with any Merrill Edge investing accounts. 

Merrill Edge also has a couple of options for hands-off investors: Merrill Edge Guided Investing and Merrill Edge Guided Investing with an advisor. The Merill Edge Guided Investing account offers automated investment management, but you’ll be responsible for a $5,000 minimum and a 0.45% annual advisory fee.

As indicated by the name, Merrill Edge Guided investing with an advisor gives you one-on-one access to a human financial advisor. The fees are higher for this account, though. It has a $20,000 minimum requirement, and a 0.85% advisory fee.

The brokerage offers market research from Morningstar, Moody’s, CRFA, and other market analysis sources. Merrill Edge also has a Merrill Edge Market Pro platform more more advanced traders. 

What to look out for: There aren’t many downsides to Merrill Edge. The biggest thing to keep in mind is that you won’t be able to buy investments like precious metals or cryptocurrencies. 

Stock Market Best for options trading: Webull

Why Webull made our list: Webull offers low-cost trading all around. While the investment app’s account selection is limited to individual brokerage accounts and IRAs, it lets you open either account at no additional cost (with the exception of small clearing firm and regulatory agency fees).

Like Firstrade, Webull charges $0 for options contracts. Its other account features include extended hours trading (from 4 a.m. to 9:30 a.m. or 4p.m. to 8p.m.), Nasdaq-sponsored market data, and free real-time market quotes. 

If you’re interested in investing in virtual assets or borrowing money to invest, Webull also offers cryptocurrencies and margin trading. 

What to look out for: Webull’s investment selection only includes stocks, ETFS, American depositary receipts (ADRs), and cryptocurrencies. If you’re interested in other investment choices, you may need to look elsewhere. 

Stock Market Best for active trading: Robinhood

Why Robinhood made our list: Robinhood is best for active traders, options traders, and day traders looking to buy and sell investments at low costs. The app currently offers commission-free stocks, ETFs, and options (though options cost $0.65 per contract).

Robinhood and Webull share several similarities when it comes to fee-free active trading. They both offer the same investments, but they vary when it comes to account types and account features. Unlike Webull, Robinhood offers larger instant deposits (up to $50,000) for margin accounts, plus a cash management account that offers a 0.30% APY.

Robinhood also provides professional investment research, but this only applies to Robinhood Gold members. Robinhood Gold costs $5 per month, but it includes both margin trading (borrowing money to invest) and bigger deposits.

What to look out for: Robinhood’s investment research is mainly available for Robinhood Gold members. Though the investment app offers a library that contains informational blog posts on investing topics, you won’t get much guidance beyond that. Another thing to note is that Robinhood doesn’t currently allow you to name beneficiaries on investment accounts. This could be a downside for those looking to transfer their assets after death.

The investment app also faced backlash earlier in 2021 after it temporarily restricted trades of Gamestop (GME), AMC Entertainment (AMC), and other companies. The app eventually reopened trading on those stocks.

Stock Market Best for all types of investors: E*TRADE

Why E*TRADE made our list: E*TRADE is another popular brokerage that offers free trades on stocks, ETFs, and other investments. The investment app also has thousands of no-load, no-transaction-fee mutual funds (mutual funds that are free of commissions or sales charges).

Its options — which are also commission-free — cost $0.65 per contract if you make less than 30 trades per quarter. But if you make more than 30 trades per quarter, E*TRADE charges $0.50 per contract.

E*TRADE’s account selection also includes automated accounts and managed portfolios. Its Core Portfolios automated account has a $500 minimum requirement and 0.30% annual fee. Its three managed portfolios — Blend Portfolios, Dedicated Portfolios, and Fixed Income Portfolios — give you access to human advisors who help manage your investments.

E*TRADE also offers IRAs, Coverdell Education Savings Accounts (ESAs), and custodial accounts. 

What to look out for: If you’re planning on trading options, you’ll pay less if you trade more frequently, but you’ll pay more if you make less than 30 trades per quarter. 

Stock Market Best for advanced traders: Interactive Brokers

Why Interactive Brokers made our list: Interactive Brokers offers a long list of trading tools and platforms, market research resources, and investment products for experienced, active traders. In addition to its commission-free offering, the brokerage lets you place trades both in the US and in international markets. This might be appealing to retail traders interested in investing in foreign currencies. 

Interactive Brokers also provides fractional shares, automated investing, and investment education. For instance, its Traders Academy offers courses on all things investing. The brokerage’s Trader Workstation (TWS) application gives you trading access in over 100 markets worldwide.

Interactive Brokers’ automated advisor, Interactive Advisors, could be a good fit for those looking for more guidance. Minimums on its automated accounts range from $100 to $50,000, and annual fees span from 0.08% to 1.5%.

What to look out for: IBKR Pro users will pay more in monthly fees if they’ve got $2,000 or less. If you have more than $100,000 in your account, you’ll pay $10 per month. 

Stock Market Other brokers we considered:

  • Vanguard: Vanguard offers a vast collection of wealth-building products, including brokerage accounts, automated and advisor-assisted accounts, IRAs, cash management accounts, and more. It also provides commission-free trading on stocks, ETFs, and options.
  • Ally Invest: Ally Invest is best for all types of investors. The online brokerage provides active trading, automated investing, IRAs, forex trading, and more. You can also use Ally to open checking, savings, or other bank accounts. 
  • SoFi: Though SoFi is popularly known for its loan services, the company also offers competitive investment products. Its investment choices are limited to stocks, ETFs, IPOs, and cryptocurrencies, but the investing app offers complimentary certified financial planner (CFP) access.
  • M1 Finance: This money management investment app offers a wide array of account types and features. Though it only allows you to trade stocks or ETFs, M1 Finance also offers an automated investing option for hands-off investors.
  • TD Ameritrade: Now owned by Charles Schwab, TD Ameritrade offers interactive trading platforms, commission-free trading, automated investing, investment research resources, and more.

Stock Market Frequently asked questions

How did we choose the best online brokers for free stock trading?

When narrowing down our list for the best brokerages, we paid attention to a range of factors, including fees, investment selection, account types, investment research availability, and customer support.

Each brokerage listed in this review offers unique features, but what they all provide is $0 or low account minimums and commission-free trading. 

What are brokerage accounts?

Brokerage accounts are financial tools that let you shop for stocks, bonds, ETFs, options, mutual funds, and other investments. Most brokers offer individual or joint brokerage accounts, or both.

You can hold both cash and investments in brokerage accounts. And like bank accounts, you can make deposits or withdrawals.

How do brokerage accounts work?

You can generally open brokerage accounts online and use them either via web platforms, or mobile devices. You can also use these accounts to deposit or withdraw funds, buy or sell assets, rebalance your investments, and stay updated on the latest market news.

The US Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) govern all brokerages. And fortunately for you, brokerage accounts are insured by the Securities Investor Protection Corporation (SIPC). 

Who should use a brokerage account?

If you’re interested in investing on your own, or with someone else, brokerage accounts are a great option. No matter what your savings goals are — whether that’s buying a home, saving for retirement, or investing for general purposes — brokerage accounts are excellent tools for building wealth.

Experts recommend having a solid emergency savings fund before you begin investing. This is because investing — and different asset types — carries unique risks. 

How much should a brokerage account cost?

Most brokers have $0 minimum requirements and offer commission-free trading on stocks, ETFs, and options (though options usually include small contract fees).

But every brokerage isn’t the same, and some investments — like mutual funds and ETFs — may come with higher account minimum requirements. 

How do I choose an online brokerage?

As you’re comparing different apps, it’s wise to choose the one that best aligns with your risk tolerance and time horizon. It’s also a good choice to pay attention to each app’s fees, account minimums, account types, and investment types.

Stock Market The experts’ advice on choosing the best stock trading broker

We interviewed the following four investing experts to see what they had to say about investment apps:

What are the advantages and/or disadvantages of using an online broker for free stock trading?

Brian Fry, CFP:

Online brokers offering free stock trading offer greater savings for investors. There are several options to choose from which is great for DIY investors.

It’s important to consider how financial companies are making money, which may not always provide as transparent of an investing experience. Not to say this is always the case, but free trades encourage more trading instead of long-term investing.

Charlotte Geletka, CFP, CRPC:

Online brokerages are great for DIY, and they are typically very low cost. However, you will not receive the same financial advice as you would working with a financial advisor. 

Kaysian Gordon, MBA, CFP, CDFA, CPA:

There are lots of advantages. As long as [the brokerage] has the guidance you need and the research capabilities, you’re able to start investing for little to no cost.

Rickie Houston, Personal Finance Insider:

Online brokers offering free stock trading also typically provide $0 account minimum requirements. This can be great for active traders who are looking to minimize costs.

Who should consider using a broker that offers free stock trading?

Brian Fry, CFP:

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Investors that have the time and interest to manage investments along with the discipline and experience of riding out volatile markets are a good fit for using an online broker for free stock trading.

Charlotte Geletka, CFP, CRPC:

This is a great place for what I call “fun money,” so you can trade without risking your retirement or serious investment dollars.

Rickie Houston, Personal Finance Insider:

Brokerage accounts could be good for anyone interested in taking the DIY route to trading. If you can avoid commissions and high account minimums in the process, that’s even better.

Any other advice you’d offer someone who’s considering opening a commission-free brokerage account?

Brian Fry, CFP:

When considering opening a commission-free online brokerage account, proceed with caution. Free isn’t always best. Consider the importance of investing long-term over short-term trading.

Kaysian Gordon, MBA, CFP, CDFA, CPA:

Do the comparisons. There are lots of great companies out there.

Rickie Houston, Personal Finance Insider:

Make sure to do your research on the fee differences between investment products. If you’re looking to diversify your portfolio, fees could vary for different investment types.

Rickie Houston is a wealth-building reporter at Personal Finance Insider who covers investing, brokerage, and wealth-building products.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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