Investors can pocket a few hundred bucks just by opening an account with an online broker these days. Low commissions to trade stocks or exchange-traded funds can save you more money in the long run. What makes for a first-rate broker? It depends on what you value.
Low fees may be critical for active traders, but buy-and-hold types may want an array of no-transaction-fee mutual funds.
Brokers with unbeatable prices may lack the retirement-planning tools or advisory services you need. We weighted the categories based on what our readers consider vital: Take a look at our reviews of seven of the biggest brokers in the industry to see which is the best fit for you.
To be included, firms had to offer online trading of stocks, ETFs, funds and individual bonds. We also excluded some brokers that focus primarily on active traders and lack a full suite of investment choices and services. Fidelity offers the best overall mix of investment products, retirement-planning tools and services. But its prices are close enough in other areas to be competitive with lower-cost brokers. Furthermore, Fidelity wins points for its full range of retirement and advisory services, along with top-notch investing tools and customer service.
Fidelity also shines for helping clients manage their cash. Customers can pay bills and track spending on all of their external accounts. If you like to trade stocks, Merrill is your best bet. Merrill is also a standout for research on which stocks to buy. We gave both Merrill Edge and Charles Schwab four stars, but in the underlying scoring, Merrill ranked ahead by a whisker.
Where Schwab stands out — both against Merrill and all other contenders — is its wide range of commission—free exchange-traded funds offerings. Investors on the go. All brokers we surveyed let customers trade and conduct other business on a mobile device. All except Vanguard let you log in with a fingerprint. And the apps can be handy for banking: Investors can pay bills, transfer funds and more. And investors can scan a product barcode to pull up stock information a feature TD provides, too.
None shows a detailed analysis of your portfolio or lets you trade bonds. TD Ameritrade offers a healthy range of no-fee mutual funds 3, and commission-free ETFs to choose from. Another cutting-edge feature that it shares with Fidelity — you can use the site to see how a stock is trending on Twitter and similar social-media sites.
If being able to visit a bricks-and-mortar location and interacting with a real, live human matters to you, consider Scottrade. With offices, it scores well for availability, second only to Merrill which gets to piggyback on the 2, Bank of America branches its corporate parent has nationwide.
However, retirees are a group who can do right by Vanguard. Which one is best? Customers pay only the low fees of the underlying ETFs. Held at Schwab Bank, that cash earns just 0.
But all-in annual costs are 0. Conversely, Betterment one of the first robo advisers charges a management fee of 0. Fidelity was slated to launch its robo service, Fidelity Go, in July. The firm says all-in fees will be 0. And Fidelity says Go portfolios will hold 0. That could give Fidelity portfolios a performance edge over the long term.
Ultimately, though, your results will depend on whether the robots do a better job of managing your money than a human. Firstrade Kiplinger updates many of its best rankings regularly.
Above is our ranking of best online brokers. Keep in mind that ranking methodologies can change from year to year based on what data was available at the time of publishing, changes to how the data was gathered, switches to new data providers and tweaks to the formulas used to narrow the pool of candidates.
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