Kiplinger Online Brokerage Ratings
Locating a broker that meets all of your needs can be tough, especially if you are new to the trading game and you simply don’t know where to start. The good news is that there are publications out there that have done all the research for you and have made it easy to compare brokers side by side. Kiplinger’s is one of the more prominent names in the field of consumer financial magazines and personal finance services ratings. So, let’s see how some of the more popular brokers measure up.
1
OptionsXpress
- Kiplinger’s places OptionsXpress as number one on its list of online brokers, rating it the best among its peers overall in both the $50,000 to $500,000 account category and the $500,000 and above account category.
- OptionsXpress picks up the number eight spot for lowest commissions and fees for both the under $500,000 and over $500,000 account categories.
- OptionsXpress captures the number five spot on the top ten lists for best trade execution.
- OptionsXpress takes the number three spot on the top ten lists for lowest margin rates.
- OptionsXpress makes the Kiplinger's top ten lists for highest interest paid on cash at number six for accounts trading under $500,000 and number seven for accounts trading above $500,000.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $9.95 | $0.00 | $1.50 | $0.00 | $9.95 | $9.95 + LOAD FEE |
2
TradeKing
- TradeKing nets a coveted position on Kiplinger’s top ten list of overall best online brokers for $50,000 to $500,000 accounts. It did slip one notch to number eight in the $500,000 and above account category.
- TradeKing tops Kiplinger’s top ten list for lowest commissions and fees for accounts from $50,000 to $500,000, but slips to spot number two for accounts $500,000 and above.
- TradeKing captures the number three slot on the top ten list for overall best trade executions.
- TradeKing grabs the number two slot on the Kiplinger's top ten list for lowest margin rates.
- TradeKing comes in at number four for accounts trading under $500,000 and number five for accounts trading over $500,000 for the category on interest paid on cash.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $4.95 | $4.95 | $0.65 | $0.00 | $4.95 | $14.95 (no load) |
3
Scottrade
- Scottrade rounds out Kiplinger’s top ten lists for overall best brokers in the $50,000 to $500,000 account category, coming in at number ten. This broker actually slipped to number 11 in the $500,000 and above account category.
- Scottrade scores well with Kiplinger’s when it comes to trade commissions, coming in at the number two spot for accounts $50,000 to $500,000, but slips to number five for accounts trading $500,000 and above.
- Scottrade takes the number eight spot on the top ten list for best trade execution.
- Scottrade hits the number ten spot, rounding out Kiplinger’s top ten list for lowest margin rates.
- Scottrade captures the number nine spot on Kiplinger’s top ten list for highest interest paid on cash.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $7.00 | $7.00 | $1.25 | $500.00 | $27.00 | $0.00 - $17.00 |
4
Firstrade
- FirstTrade receives high marks from Kiplinger’s for its overall product and service offerings, placing number four on the top ten list of brokers, for accounts containing $50,000 to $500,000.
- FirstTrade picks up the number three position on Kiplinger’s top ten list for lowest commissions and fees for accounts trading $50,000 to $500,000. However, they're at spot number four for accounts trading $500,000 and over.
- FirstTrade grabs the number six spot on the top ten list for best trade execution.
- This broker gets the number six spot on Kiplinger’s top ten list for lowest margin rates.
- FirstTrade hits the top ten list for highest interest paid on cash at the number seven and number eight spots for accounts trading under $500,000 and trading at over $500,000 respectively.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $6.95 | $6.95 | $0.75 | $0.00 | $26.95 | $0.00 - $9.95 |
5
E*Trade
- E*Trade makes it into the illustrious Kiplinger’s top ten list of overall best online brokers in position number nine for accounts with $50,000 to $500,000 and over.
- E*Trade takes the number five and number six spots for lowest commissions and fees in accounts trading at under $500,000 and over $500,000 respectively.
- E*Trade takes the number nine spot in the top ten list for best trade execution.
- E*Trade lands in the number seven position for lowest margin rates.
- E*Trade captures the number ten spot on Kiplinger’s top ten list for highest interest paid on cash.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $7.99 - $9.99 | $7.99 - $9.99 | $0.75 | $500.00 | $45.00 | $0.00 - $19.99 |
6
TDAmeritrade
- TD Ameritrade almost made the top ten lists for Kiplinger's overall best brokers, coming in at number eleven for accounts valued at $50,000 to $500,000. It was rated slightly better; at position number nine for accounts valued at $500,000 and above.
- TD Ameritrade captures the number five and the number three spots for lowest commissions and fees for the under $500,000 in trading and the over $500,000 in trading respectively.
- TDAmeritrade captures the number two spot for best trade executions in Kiplinger's list.
- TD Ameritrade barely misses the top ten list for lowest margin rates, coming in at number eleven.
- TD Ameritrade again misses the top ten list for highest interest paid on cash, coming in at number eleven.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $9.99 | $9.99 | $0.75 | $2,500 | $44.99 | $0.00 - $49.99 |
Kiplinger Online Brokerage Ratings & Ranking Factors
Kiplinger’s is one of the top names in the financial world when it comes to advice and information on investing and retirement planning, taxes, insurance, real estate, and every other aspect of personal finance. Kiplinger’s takes pride in providing sound financial advice, among many other things. Their dedication to excellence affords them the kind of credibility that's required to properly rate online stock brokers.
Kiplinger’s has a long standing history of ranking brokers, which is based on a number of factors including:
- Cost: Kiplinger’s knows that one of the first things that investors look at when deciding which broker to use is cost. Analysts look at each broker’s commission for stock trades as well as account maintenance fees such as inactivity fees or annual fees. Kiplinger’s uses a standard measure of a broker’s costs based on making a stock trade of less than 1,000 shares.
- Best Trade Executions: Kiplinger’s knows that your broker doesn’t execute your sales orders alone. As a matter of fact, each market order you make actually passes through several hands. Kiplinger’s measures how efficiently a broker passes orders around and whether or not they are getting you the best price for your trade. Analysts are also on the lookout for brokers that routinely route orders to companies that they have a vested interest in and penalize that type of behavior.
- Lowest Margin Rates: Many brokers will let you borrow money against your account for a fee. Those rates are measured against the fees of other brokers in the same category in order to determine who charges the least for this service.
- Highest Interest Paid on Cash: The money in your account that is not actively invested in stocks, bonds, or other investment vehicles should be earning you interest, just like it would if it were sitting in a good high interest savings account. However, the truth is that many brokers pay a pittance, if anything at all, as interest on that cash. Kiplinger's analysts rate each broker based on the percentage of interest that is paid on cash balances.
- Best No-Load Fund Offerings: Many investors know that the ability to aggregate your mutual fund investments is one of the many motivators in opening an online broker account. Kiplinger’s takes a look at how many no-load funds that a broker offers, how many of those funds can be traded with $0 commission, and lastly, what the commission is on those that do have fees. All of these variables are combined to give a broker a ranking in this category.
- Responsiveness and Broker Knowledge: Being able to contact your broker if you have questions concerning your account, a trade you have made, or the use of the brokerage site is an important part of any broker/investor relationship. Brokers are rated on the number of avenues that can be used by investors to contact them (by phone, e-mail or instant messaging). Kiplinger’s also measures the accurate responses and average hold times of brokers for this particular category.
- Best Research: Kiplinger's not only takes into account the quantity of available research, but also the quality and the value that the research adds to the overall investment experience.
- Best Website: Trading platforms, overall site navigation and information flow are all things that analysts review when determining which broker has the best website. Analysts count the number of clicks it takes to execute a wide variety of tasks on each broker’s site.
- Data for Tax Time: Does your brokerage provide you everything you need for April 15th? Kiplinger’s evaluates brokers based on the information they provide for your schedule D, and whether or not they charge a fee for this service.
- Best Conduct: This category measures a broker’s commitment to ethical business practices. The brokerage with the cleanest record appears at the top of this ranking. Kiplinger’s analysts look at a broker to determine how many fines were levied against them over the past three years and how many judgments they have lost to customers in arbitration, and weigh this against the number of trades executed by the firm.
In the end, the brokers that have the best scores in each of these categories will find themselves at the top of the overall best brokerage category, a highly coveted title by all online brokers.
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