Choosing the right stock broker is one of the most important decisions you’ll make as an investor. The broker you choose can have a major impact on your investment returns through factors like trading commissions, investment choices, research and guidance. With so many stock brokers to choose from, how do you decide which one is best for your needs?
In this comprehensive guide, we’ll compare the leading stock brokers available and examine the key factors that make one broker preferable over another. We’ll look at commissions and fees, investment choices, research and tools, customer service and more. By the end, you’ll have the information you need to confidently choose the best stock broker for your investing style and goals.
Key Factors in Choosing a Stock Broker
When comparing stock brokers, here are the most important factors to consider:
- Commissions and Fees – Stock trades will involve commissions and various other fees. The commission structure and overall costs of trading can vary widely across brokers.
- Investment Choices – The range of available investments is key. You want to ensure the broker offers all the securities you’re interested in trading.
- Platforms and Tools – The usability and performance of trading platforms, research capabilities, charting and screening tools can differ across brokers.
- Customer Service – If you need advice or support, the availability and quality of customer service is vital.
- Account Minimums – Some brokers require minimum balances to open an account, which can make them inaccessible for newer investors.
- Educational Resources – The research reports, market analysis, webinars and guides that brokers provide can supplement your own research.
We’ll explore each of these key factors in detail as we compare the leading stock brokers.
Stock Brokers Compared
Here is an overview comparing the most popular stock brokers across the key factors:
Fidelity
Commissions and Fees – $0 trades for online U.S. stock, ETF, and options trades. $0.65 per options contract. Industry average mutual fund transaction fee of $75.
Investment Choices – Offers trading in stocks, ETFs, options, mutual funds, bonds, CDs, and IPOs. Over 11,500 mutual funds from 350 fund companies available with no transaction fees.
Platforms and Tools – Robust desktop platform Active Trader Pro and easy-to-use Fidelity mobile app. Advanced trading tools and excellent research and charting.
Customer Service – 24/7 phone support and over 200 local investor centers for in-person help.
Account Minimum – $0 minimum to open a brokerage account.
Educational Resources – Wide range of webcasts, videos, research papers, and other educational content.
Charles Schwab
Commissions and Fees – $0 trades for online U.S. stock, ETF, and options trades. Low margin rates starting at 8.325%.
Investment Choices – Stocks, ETFs, options, mutual funds, bonds, futures trading. Over 4,000 mutual funds available with no transaction fee.
Platforms and Tools – User-friendly StreetSmart Edge and StreetSmart Central platforms. Excellent trading tools, charting and screening capabilities.
Customer Service – 24/7 phone brokerage support. Over 330 local Schwab branches for in-person assistance.
Account Minimum – $0 minimum deposit to open an account.
Educational Resources – Large library of videos, articles, webcasts, live events and courses for investors.
E*TRADE
Commissions and Fees – $0 stock, ETF and options trades. $0.65 per options contract. Minimum $500 balance to avoid quarterly service fee.
Investment Choices – Stocks, ETFs, options, mutual funds, bonds, CDs. Over 9,000 mutual funds available.
Platforms and Tools – User-friendly Power E*TRADE platform and mobile app. Advanced charting, screening and trading tools.
Customer Service – 24/7 phone and chat support.
Account Minimum – $0 minimum to open an account.
Educational Resources – Large knowledge base of videos, articles, webcasts, virtual workshops and guides.
TD Ameritrade
Commissions and Fees – $0 commissions for online stock, ETF and options trades. Options contracts $0.65 each. Extensive selection of commission-free ETFs.
Investment Choices – Stocks, ETFs, options, mutual funds, bonds, CDs, and more. Over 13,000 mutual funds available with no transaction fee.
Platforms and Tools – Thinkorswim desktop platform provides advanced tools and analytics. Easy-to-use web and mobile platforms.
Customer Service – 24/7 phone support and chat. Over 200 local TD Ameritrade branches.
Account Minimum – $0 minimum deposit to open an account.
Educational Resources – Wide array of free webcasts, videos, courses and in-depth articles.
Vanguard
Commissions and Fees – $0 stock and ETF trades. $1 per options contract. Low expense ratio mutual funds.
Investment Choices – Stocks, ETFs, options, mutual funds, bonds, CDs. Over 200 commission-free Vanguard ETFs.
Platforms and Tools – Streamlined web and mobile platforms. More limited charting and research capabilities compared to rivals.
Customer Service – 24/7 phone brokerage support. Access to financial advisors for guidance.
Account Minimum – $3,000 minimum to open a brokerage account.
Educational Resources – Large library of articles, videos and guides tailored for Vanguard clients.
Commissions and Fees
For frequent traders, the commissions and fees charged by a broker can really add up over time and eat into returns. Many leading brokers now offer $0 stock, ETF and options trades to stay competitive.
Fidelity, Charles Schwab, E*TRADE, TD Ameritrade and Vanguard all offer $0 commissions on online U.S. stock and ETF trades. This makes them attractive options for active stock and ETF investors who buy and sell frequently. For options trading, commissions are typically around $0.65 per contract across these brokers after any discounts.
Mutual fund costs are another consideration. Vanguard stands out for its ownership structure, which allows it to offer lower expense mutual funds than most competitors. Fidelity and Charles Schwab also offer a large selection of funds with no transaction fee. For frequent mutual fund traders, transaction costs can add up at brokers like TD Ameritrade and E*TRADE.
Account fees and minimums are another cost factor. Brokers like Fidelity, Schwab and TD Ameritrade have no minimum deposit requirement to open a brokerage account. Vanguard requires a higher $3,000 minimum investment. E*TRADE requires a $500 account balance to avoid quarterly service fees.
For low costs overall, Fidelity and Charles Schwab stand out. Both offer extensive $0 commissions for stock, ETF and options trades, plus affordable mutual fund costs. For buy-and-hold investors making just occasional trades, Vanguard is also a strong choice thanks to its low expense ratio mutual funds.
Investment Choices
The range of investment products available at a broker is key. You want access to all the securities types that are part of your investing strategy.
The major brokers we reviewed generally offer trading in stocks, ETFs, options, mutual funds, bonds and CDs. Most also offer IRA retirement accounts, joint accounts and trusts/guardian accounts. Key differences:
- Fidelity provides among the widest range of mutual funds from over 350 fund companies.
- Vanguard mainly focuses on Vanguard investments – stocks, ETFs and its large suite of proprietary mutual funds.
- TD Ameritrade offers the ability to trade forex and futures in addition to traditional securities.
For trading individual stocks and major ETFs, any of the major brokers have you covered with a wide selection of securities. If you want access to bonds, CDs or IPOs, most large brokers can accommodate this too. Mutual fund investors should look for a strong open architecture platform that provides access to funds from many companies, like those at Fidelity and Schwab.
Platforms and Tools
The trading platforms, research capabilities and tools available through a broker are key considerations for active investors. You want platforms that are easy to use yet powerful. The availability of screening tools, advanced charting, real-time data and news, and even third-party integrations can significantly enhance your trading experience.
Fidelity and Charles Schwab stand out for their trading platforms. Fidelity’s Active Trader Pro desktop platform and Schwab’s StreetSmart Edge are both equipped with advanced tools, charting and analytics for active investors. Mobile apps from both brokers are top-notch, with robust capabilities tightly integrated with their desktop platforms.
E*TRADE also offers an excellent trading experience through its Power E*TRADE platform and mobile apps tailored for traders. TD Ameritrade’s thinkorswim desktop platform is another favorite among active traders with its extensive tools and customization options. Vanguard has more basic trading platforms that may leave power users wanting more.
For investing research, Fidelity and Schwab again excel thanks to their extensive proprietary content, from technical and fundamental analysis to retirement planning and trading ideas. E*TRADE and TD Ameritrade also stand out for robust research capabilities. Vanguard has solid fundamental analysis but less breadth across investing topics compared to rivals.
Customer Service
If you need assistance choosing investments, trading questions or help with your account, the quality of a broker’s customer support makes a big difference. Convenience factors like telephone support hours and local branches are important to consider.
Fidelity and Charles Schwab offer some of the most extensive customer service. Both brokers provide 24/7 telephone brokerage support you can call for help any time. Branch networks are another major perk – Fidelity has over 200 local investor centers and Schwab has more than 330 brick-and-mortar locations. This makes it easy to get face-to-face investing help in many areas.
E*TRADE, TD Ameritrade and Vanguard also offer quality customer service. All provide 24/7 phone support for brokerage accounts. For in-person help, E*TRADE has over 30 local branches while TD Ameritrade has more than 200 locations. Vanguard lacks local branches but offers appointment-based advisory services through its financial advisors.
Account Minimums
Some brokers require you to deposit a minimum amount to open a new brokerage account. This can make them inaccessible for newer investors with lower balances.
Fidelity, Charles Schwab, E*TRADE and TD Ameritrade all have $0 minimums for opening a standard brokerage account. This makes them ideal for investors who don’t have thousands to commit upfront.
Vanguard stands out with a significantly higher $3,000 minimum balance required. You’ll need at least this amount upfront to open a Vanguard brokerage account. However, Vanguard does offer IRA accounts with only $1,000 required to open.
Educational Resources
The research, tools and educational materials a broker provides can be invaluable for developing your investing skills. Things like webinars, videos, courses and expert content allow you to keep sharpening your knowledge.
Fidelity and Charles Schwab offer unmatched educational resources. Both brokers provide extensive libraries of webcasts, videos, research papers and courses investors can use. Major topics covered range from technical analysis to retirement planning to developing trading strategies.
ETrade and TD Ameritrade also stand out for robust educational offerings. Both brokers provide a wealth of videos, articles, webcasts and courses to expand your investing knowledge. Topics span investing basics, options trading, chart reading, managing risk and more.
Vanguard provides solid fundamental analysis but fewer technical resources. The education centers mainly on using Vanguard tools and implementing Vanguard fund strategies rather than broader investing skills.
Conclusions
Here are some key takeaways on choosing the best stock broker:
- Fidelity and Charles Schwab are top choices for active traders thanks to $0 stock and ETF trades, powerful platforms and robust research.
- Vanguard is ideal for buy-and-hold mutual fund investors who want low-cost funds and don’t need robust trading tools.
- E*TRADE and TD Ameritrade also offer strong trading platforms, investment choices and education for active investors.
- Consider costs like commissions, account fees and minimums which can vary across brokers.
- Compare investment product range since some brokers are better for stock trading, others for mutual funds.
- Choose a broker whose platforms, tools and services best fit your investing style.
Ultimately there is no one-size-fits-all best online stock broker. It depends on your priorities like costs, investment choices, trading activity and personal preference. By outlining the key considerations for choosing a broker, this guide provides the information you need to select your best fit.