I hunted for reputable stock brokers with great pricing and the lowest fees. Here are some of the more popular brokerages I’ve looked into.
I’ve always been quite interested in adding to my investment holdings and have been on the lookout for good online brokers. If you’re someone who’s been keeping the faith about the long term prospects of the stock market (typically 10 years or more), then this could very well be a good time to add to your equity positions.
To go cheap, I house my investments in a mix of both no load mutual fund companies and discount brokers. As a stock investor, you could go the mutual fund route with great names like Vanguard, Fidelity, Charles Schwab, and T. Rowe Price, but to add some flexibility to your portfolio at really affordable transaction rates, you may also be interested in signing up with an online discount broker. I did some research and compiled this list of low cost brokerages:
Best Online Stock Brokerages With The Lowest Fees & Commissions
1. TradeKing offers $4.95 per stock trade regardless of the size of your account balance. They have some helpful tools and calculators to help customers out with determining their target prices for trades. In addition, they’ve got good support for options trading such as seminars and tools, for those among you who dabble in options. TradeKing is also tops in customer service, with a live representative at the ready via phone, email or IM through their web site! They’re quite easy to reach. Some other extras they offer: a refund of your transfer charges up to $150 if you switch your account to them, and $50 for each friend or referral you send their way.
Also, TradeKing has won some great accolades from the personal finance community, having received the following awards and honors: Smart Money ranks TK as #1 in customer service in 2008, the best discount broker in its annual Broker Survey of US Brokers (twice in a row!) and the highest ranking of 4 stars in Barron’s 12th Annual Survey of Best Browser-Based Online Brokers. For those interested in opening an account, Here’s where to sign up.
2. OptionsHouse has very affordable commissions, only $3.95 per stock trade. Mutual fund trades are $9.95 (same as Zecco and Firstrade), they’re easy to reach over the phone, and they offer Live Chat via their site. They’ve also got a broker comparison table, which all online brokers like to show to put themselves in the best possible light. Their table shows that their trading commissions are better than many brokers’ (for regular trades) but they’re missing that nice community feature that’s available on sites like Zecco or TradeKing. But open an account with them and you could get your transfer fees reimbursed up to $100. They also have an ongoing promotion right now that’s good for a limited time: 100 free stock trades for new accounts. Here’s where to sign up.
3. Zecco is one of those online brokerages which used to offer free trades for those who open an account with a balance minimum or who would trade fairly actively. However, they’ve since changed their rates and pricing structure, and these days, their trades have been set at $4.95 per transaction. For commissions on mutual funds that are not on the no-load list, Zecco charges $10 per trade.
Also, Zecco has since revamped their site and services, and while they provide extra services (such as getting the information you need for tax purposes) for a charge, they’ve also beefed up their suite of free trader tools and applications. They’ve also raised their site’s user-friendliness quotient. It’s great to see them make ongoing improvements to address their weak points. For more active traders who are looking for an investment platform with rich features, they may be worth a look. Here’s where to sign up.
4. Scottrade charges $7 per stock trade online, but will charge more for phone and broker assisted trades. These are great prices, but I actually appreciate their mutual fund fees even more! For mutual funds with an NTF designation (no load and no transaction fee), your transactions are completely free. However, no load funds that aren’t in the NTF program have a fee of $17 for each trade, whether you buy, sell or exchange. Similar charges are applied to loaded funds and broker assisted transactions with mutual funds, so you’ll get the best deal by sticking to managing your portfolio online. From the feedback I’ve heard about Scottrade, they’re a well-established, highly popular broker that’s a great fit for the retail investor. You’ll also be eligible for free trades if you refer your friends and family to Scottrade. Here’s where to sign up.
5. Firstrade commission rates run $6.95 a trade for stocks and $6.95 plus $0.75 per contract for options. Being a fan of mutual funds, I like that Firstrade.com has a large product roster of mutual fund offerings and will charge you nothing for load funds beyond the load fees. No loads will run you a relatively lower $9.95 a trade. Broker assisted trades do run a bit higher, at $26.95 though. I also like the fact that you can also buy fixed income securities here, including treasury bills, notes, bonds, various other bond instruments and CDs. They’ve got some special deals going with free trades, transfer rebates and cash back bonuses for new accounts as well as wire transfer reimbursements and a cool $50 referral fee offer for each friend you refer to them. Here’s where to sign up.
6. E*Trade isn’t the cheapest broker, relative to the others we’ve listed here, with rates ranging from $7.99 to $9.99 per trade (depending on your trading frequency), but they’re still pretty affordable. Some things to watch out for: if you need broker assistance, they’ll hit you with $45 a trade and an online commission. There are also a few account activity fees and special request fees that you should take note of (e.g. returned check fee, stop payment requests, outgoing wire transfers, etc).
The positives? They offer some support for those who need financial advice potentially rivaling what you’d expect from full-service brokerages, and they’ve got a wide range of investment selections in their product roster. They also rate well for solid tools and seminars for those folks who are interested in options trading. In fact, they may have the most diverse set of tools available of any online broker (check out their ETrade Pro platform). Their customer has also been beefed up with the introduction of a Live Chat option and faster phone response. I’d put them at par with Charles Schwab.
As far as honors go, Smart Money chose them as the #1 online broker for 2007 and 2008. Recently, they’ve received 5 stars for their trading tools in Smart Money’s 2011 survey. They also earned 5 stars for customer service (from Kiplinger’s) and 4.5 stars for excellent research amenities (from Barron’s) in 2011. So clearly, they’re doing a lot of things right! Here’s where to sign up.
7. tradeMonster has entered the trading market as one of the newer online brokerages in this list, with roots in the options world. They offer a simple pricing structure for stocks — a flat $7.50 per trade. Mutual funds and bonds are $15.00 per trade (only upon purchase) with no fees upon sale. For options, the commissions are tiered, but appear to be relatively cheaper than the fees of other brokers, especially when more contracts are involved. Overall, they’re a much cheaper options broker than TradeKing or OptionsXpress if you intend to be a high volume options trader. Plus, they’ve already been honored by Barron’s with a 4 star rating despite being the new kid on the block. Here’s where to sign up.
Overall, these brokers are a good list to work with. I’ve done business with a few of them and have experienced good customer service with great commission rates.
Copyright © 2009 The Digerati Life. All Rights Reserved.
{ 65 comments… read them below or add one }
Where do you get that Firstrade has had more fines than other firms? Firstrade’s site says they are Kiplinger’s Top Clean Hands firm. Doesn’t that mean they have had less fines than other firms?
Anon,
You are absolutely right. I stand totally corrected and made the appropriate change. I misinterpreted the information I garnered from Kiplinger and I am glad you pointed this out. Kiplinger rates Firstrade quite highly for its reputation. My bad, and my apologies for the error.
Great resource here for new investors. Interestingly I think the relatively cheap stock markets will bring a lot of investors back into the market towards the end of 2009 when markets stabalize. I use Zecco and Tradeking – because of their low rates and some promtional offers they have running. If you don’t want indepth research options and transaction costs are your main focus, then these are the brokers to go for.
Any specific reason you dropped out Sharebuilder? They charge about 10 dollars per stock trade.
Manshu,
Yes, there are a few other discount sites like Scottrade and Sharebuilder that offer cheap stock trades, and I should take a closer look at them. For the purposes of this article, I wanted to keep to those online brokers that were “cheapest” or were recognized or honored for some qualities. The ones here either offered free stock trades (even under certain conditions) or had very low commissions on regular stock trades. The only one that may not exactly qualify, based on those considerations, is E*Trade. But they have received some honors and I also wanted to include those brokers I carry an account with.
I also culled my information and based my coverage on some research, where I found that many resources (Kiplinger, Smart Money, Barron’s) were favoring these sites. Subsequently, I then included those online stock brokers which I’m already pretty familiar with as I already use them (or had used them) or because I’m considering signing up with them and funding them with my own money.
Thanks for asking! I’d love to hear more about what others have to say about their online brokers. I’d love to learn more about others’ experiences with those cheap ones in particular 😉 .
Update: I had planned to update my list to include Sharebuilder, but unfortunately, I found their web site to be excruciatingly slow. Because of this issue, I feel that I will be unable to review their site sufficiently for inclusion in the list above.
I can’t imagine paying to buy mutual funds when there are so many free options out there, for years I’ve used T Rowe Price’s asset builder to invest small amounts for no load. I used Sharebuilder to buy some Vanguard ETFs, they often have promotions running if you’re a costco member. The $50+ bonus offsets a few trades, if you’re not planning to actively trade. I hadn’t heard of Firstrade before, I’ll have to check them out.
I just wanted to say that I just found your blog and I really like your writing. I will be coming back often to get more advice for sure.
I also need to re-evaluate my portfolio and adjust my investments accordingly. You mention some online resources I’ve never heard.
Thanks
Just thought I would throw my two cents worth in!–I have used THINK OR SWIM for over 2 years and find that around about $5 per trade, they are about the best out there! They often give me better fills on price and there speed is unmatched anywhere! There option trades also are the easiest and fastest direct access that I have found!–I can trade an option without looking up the symbol within about 2 seconds start to finish!–I understand that they were aquired by TDA so hope they wont change!–They are the best in my opinion!
zecco has been awsome but they are making their limit for 10 free trades a month to having a minimum of $25,000 – I will switch over to interactive brokers – only $1 a trade once zecco makes the switch march 1st 2009
I have been using Scottrade in the past 3 years and have not been happier with them . At $7 per trade is very cheap and love their customer service.
$7 per trade is cheap but I’d prefer it even cheaper if I can get away with it and still have great customer service. In that regard, I remain a TradeKing fan. 🙂 But yes, I have heard really awesome things about Scottrade — they’re recognized for being one of the top 100 best companies to work for in 2009 (they don’t do job layoffs)! Still, they’re 28% more costly per trade than TradeKing or Zecco.
I use Firstrade. $6.95 per trade is cheap. They gave me the $50 for referring to a friend even though I did not have the promotion code.
What’s the minimum fundng req for interactive broker, anyone know? Or link me, thxs!
It’s a good review. You missed ChoiceTrade @ $5. Also, why so much money in mutual funds?
Nice reviews – very helpful. Over at FiLife we offered some general advice on how to choose a broker. Check us out for these reviews.
Thanks for the nice collection. This is really good information. Some online stock brokers are known for their award winning customer service while others are known for inexpensive or even free stock trades. This review highlights some of the best stock brokers available based on trading fees. I like how this list is focused on cheap online stock trading for active traders, and it is sorted from the lowest commission cost to the highest. In addition, special offers and features for these discount brokers are listed to help.
Awesome post! Woohoo glad I found it. Will definitely be using these and bookmarking your page. Thank you! You are a life saver 🙂
Good reviews. I’m just learning to trade myself. I am can’t decide whether to go for zecco or trade king. I’ve read your reviews on them both and I think i’ll opt for zecco. The free trades are a deal maker for me.
I just opened an account with eztrader. It looks easy. but the stock market is unpredictable. Anyone have tips or pointers? Or can anyone refer me to a website with good info. Thank you.
This is a very helpful post. I go with Scottrade because I like the customer service. I agree that $7 is becoming too expensive. There is a lot of competition for the online stock broker business.
Good luck to all finding the lowest commissions.
I also need to re-evaluate my portfolio and adjust my investments accordingly. You mention some online resources I’ve never heard.
Thanks!
I like Scottrade as well, although TradeKing is a hot choice too, IMO.
Any specific reason you dropped out Sharebuilder? They charge about 10 dollars per stock trade.
@TMT,
I had Sharebuilder on my list but their site is so slow (and many people have complained about this, including myself)! I’ve even contacted Sharebuilder about their site performance, and they’ve been very helpful. Still I find the site slow and the tools are not as advanced as those you’ll find on E*Trade (top tools), TradeKing and Scottrade. Of course, Sharebuilder’s stock trades are fairly affordable at around $10 a trade. They’re a decent choice if you want an automated investment program using a broker.
I think they’re okay, but I prefer the tools and support of the other sites I have on the list above.
But if you’d like more info on Sharebuilder, you can check out my comprehensive review of Sharebuilder here.
I think Scottrade is a good broker for beginners, and you may be able to use special codes to get free trades with them.
If anyone is ready to jump into currency exchange trading, then online is the best way to go. With up to the minute real time quotes and data that the internet is able to provide, you’re able to make timely decisions regarding foreign currency markets. Most online currency stock trading systems also offer a host of other valuable features. Traders and businessmen typically have to convert currencies when they conduct business outside their home country. Take for example, when they export goods from one country to another…
Very good review! With fair point of view. Since I am in Canada I cannot use them and here the fees are way higher at $29.95 unless you makes like 30 transactions each month. Then the brokers give you $9.95.
I have linked to these reviews. 🙂
if I’m going to lose my money I’d rather do it myself. nothing against stock brokers but in today’s market you can only trust yourself.
I have been using TDAmeriTrade for about 2 years now and I can say that their customer service is good. However, for beginners i would recommend using Scottrade or eztading. Trademonster looks quite serious too, I am going to try it now.
Good think TDAmeritrade is not on your list. I had some iffy experiences with their customer service. They also charge higher than some other reputable brokers out there.
Thanks for the nice collection. This is really good information. Some online stock brokers are known for their award winning customer service while others are known for inexpensive or even free stock trades. This review highlights some of the best stock brokers available based on trading fees.
I used Scottrade before, and while their customer service is okay, their prices for a price conscious customer is no longer competitive. It is expensive. I think for research, one can use google finance, aol finance, or yahoo finance. Actually sometimes the NYT.com too because whether serendipitously or not, a lot of articles that talked about citigroup and AIG last year, and even the 10% drop this year were released before the events actually happened.
jason
I have gone once with Scottrade — they are a great broker. I also tried TradeMonster. Anyway, thanks for the list!
Who do you think is the best broker for a person just starting out?
Which brokers have a low minimum balance to open an account? I’d like to start with just a couple thousand for some penny-stock trading.
Hey Geoff, I currently use Scottrade, and I know their minimum balance to start Is $500. They also have a referral program, where you can get 3 free trades when you open an account and say you were referred. So it’s a good program to sign up with.
Really good information. I have been trading with Charles Schwab and now I realize I have been paying way too much. I can’t believe I haven’t shopped around. Thanks!
I have tried E’Trade and Stocktrade, but they were both too expensive for me. I want a minimum investment that allows me room to breath and nothing to worry about. I do not want to have to watch the stock market everyday to worry whether I will lose money or not. For this reason I started going with penny stocks instead. The risk is smaller and the investment is smaller, but you can still make a considerable amount of money from it. I do not even do anything really… I have signed up for free newsletters from various sites about penny stocks, and I get free advice from them on what to invest in. The newsletter from stockegg.com even gives me advice on when to sell and trade. It is so easy.
Why are people so interested in penny stock trading? I think that’s the riskiest way to go. Best way is to have a diversified portfolio of stocks/mutual funds in order to control your risks. You’ll need to “watch your money everyday” if you own penny stocks. Whereas you can do a great asset allocation with a diversified fund or portfolio to limit risks and prevent the need for monitoring your investments daily.
Penny stocks are not a good move unless you know what you’re doing. I’d encourage average investors to start with a diversified core portfolio and build their investments from there.
Question: Is their an account like day-trading (A non day trading account)where one can trade in and out of a stock in one day without waiting 3 days to clear the transfer agent’s OK? I don’t go for the margin expense risk when a stock dips. And you get a margin call… I trade w/ TDAMERITRADE, but must wait 3 days to place another trade. Thanks, Jake
We’ve been using E-Trade for our trading for the past few years now however we have been inactive for a little bit and are now being charged $40 a month. E-Trade calls it an “inactivity fee”.
if you have one to choose from, which one would you use?
I have been considering online trading, so it’s nice to read a thorough review of several from which to choose. I deal with Vanguard now, but I want to add to my portfolio – thanks for the info.
Hi Silicon Valley Blogger, I’m from Indonesia, you have a nice review for this topic and I like this post.
I’ve been looking into getting into stock trading, thank you for these reviews.
This post is very informative. Me and some of my stock investor friends were looking into investing in the US. Most of us are currently investing in the Philippine Stock Exchange and we would like to have a chance at the NYSE. I have referred your blog for possible consideration on one of the online stockbrokers. Many thanks!
Just2Trade was rated the best discount broker for Commissions and Fees by Smart Money for two consecutive years, in 2009 and 2010. We offer unlimited $2.50 trades and $0.50 option contracts. Check us out at just2trade.com.
WHAT ABOUT SOGOTRADE.COM ? HOW DO THEY COMPARE?
From what I’ve heard, Sogotrade sucks. Customer service issues beset them. I use TradeKing and Schwab.
Unfortunately, Scottrade- whom I’ve had a great relationship with for years, has released a new platform, just this morning. It’s like a square wheel, changed for the sake of change and totally screwed up. I’m looking at research info for a low-end retailer, and I see the average book value for it’s peers is $144,000.00…. and much of the data was equally garbage, assuming you could even find it. The new platform is much, much harder to use- for anything. Talked with them by phone (hard to do today; I suspect I’m not the only one screaming four) to find out if I could select the original platform by option. Nope. So… much as I hate it, I’m looking for a new broker, and I will be moving a very large amount of money elsewhere. Can’t recommend them anymore.
What is the date of this blog? The date is now 20 Jan 2011.
Try trade station or interactive brokers. they are the best from all aspects and you can not only trade stocks, mutual funds, etf but also futures and foreign exchange. The best platform for foreign exchange is Oanda at fxtrade.oanda.com
Great article… Vanguard has $2 trades with $200,000 with them approx. I am with Scottrade but after reading this want the $4 fees. Scottrade has a great website and streaming site but not sure if it helps much as I work full time and research IBD and Navellier. Anyone buy Navelliers recommendations?
This is really nice information. I have been looking for a cheap stock broker as I have been kicked out from TOS for a stupid reason (my country has been banned due to certain reasons). It’s really a stupid reason as I have been their customer for 3 years, but there’s nothing I can do about it.
Has anyone had any experience with “Amp” discount stock broker, and if so, do you have any comments?
Great list of resources for beginner and advanced traders, thanks for sharing your research.
Hi All,
Does anyone know of any on line brokers that i can use to deposit cash via my credit card so that i can get started in trading American and British Stocks. i am based in Dubai, so can’t send a cheque to the US.
Any suggestions?
Thanks,
How does Sharebuilder stack up against these other brokers?
@Augustin,
Do check out our investment tools & brokers section here. We cover a myriad of investment resources in this area. We also cover Sharebuilder here in some detail. Just fyi — we are working to carve out a more comprehensive investment section on our site, so stay tuned!
I started trading penny stocks in 2002 looking to make what I had lost in the market after the dot.com bubble burst in 2001. ChoiceTrade has been really good at excuting my trades in a timely manner for a reasonable price per trade.
What if I’m not looking to be really an active trader… but rather a long term investor, would those sites be of any benefit to me or should I go for a more established brokerage firm?
@JR,
Scottrade and Etrade are good brokerages for long term investors. They are geared towards all kinds of investors (as well as traders) and provide a lot of product selections and tools that support any type of customer. They’ve also been cited for outstanding customer support.
This is a helpful post for people who want to invest in the stock market. Banc De Binary may not typically be considered in the top list of online brokers, but they are definitely doing well as a trading platform and will soon be part of the top list. Client satisfaction is the core objective of Banc De Binary. I am also happy with the free trade offers from Zecco.
Long live online trading!
Regards,
Lee
Thanks for great info on those brokers. For online and stock option trading I use Optionxpress and ThinkOrSwim including cheap stock (but ThinkOrSwim is more to option trading).
It appears that Just2Trade is now the best low price flat-fee discount broker as of May 2012. They still charge just $2.50 per trade for stocks and mutual funds and $2.50+$.50 per contract for options. They charge $35 per year for IRA accounts but normal accounts have no annual fee. They absorb up to $100 of transfer fees to transfer an account from another broker.
They require a minimum balance of $2500.00 which is much less restrictive than Interactive Brokers, but many discount brokers don’t require any minimum at all.
Their website is full-featured and includes free Morningstar and Nasdaq Level II info. I’m not signed up yet, the signup process is overly cumbersome with printed/signed/scanned pdfs involved.