Investing

Best Online Brokers in 2022

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If you’re interested in self-directed trading and investing, you’ll need to find a broker so you can participate in the stock market and other asset exchanges. Different brokers have different strengths, and finding the right place to open an account is an important first step. We selected Charles Schwab as our best overall online stock broker, although other brokers are better for specific needs. Brokers on our list require no cost to get started.

Why trust us: MagnifyMoney is an independent, advertising-supported service that compares financial services and companies that perform those services. Our editorial independence allows us to make objective selections when comparing brokerages. Review our methodology for more details on our picks.

Best online stock brokers in 2022

Best forBrokerAccount minimumTrading fees
Overall online stock tradingCharles Schwab$0$0 stock and exchange-traded fund (ETF) trades, $0.65 per options contract
BeginnersTD Ameritrade$0$0 stock and ETF trades, $0.65 per options contract
High-volume tradingtastyworks$0$0 stock trades, $1.00 per options contract, $1.25 per futures contract
Robo-advisor servicesCharles Schwab$0 for brokerage account, $5,000 for robo-advisor services$0 stock and ETF trades, $0.65 per options contract; $0 for automated robo-advisor trades
Retirement investingVanguard$0 $0 stock, ETF and Vanguard mutual fund trades, $1.00 per options contract
Low costsFirstrade$0$0 stock, ETF, option and mutual fund trades
CryptocurrencyWebull$0$0 for stock, option, ETF and cryptocurrency trades

Best for overall online stock trading: Charles Schwab

Account minimum$0
Trading fees $0 stock and ETF trades, $0.65 per options contract
See Details

on Charles Schwab’s secure website

Pros Cons
  • Strong suite of resources for education and analysis
  • Existing brokerage accounts can be enrolled into Intelligent Portfolios, an automated investing service
  • Wide range of available securities 
  • Offers socially responsible investing options 
  • Futures trading costs are higher than some competitors
  • Partner financial advisors have high minimums

Why we chose it:

Charles Schwab was chosen as our best overall brokerage because of the full range of its offerings. There are plenty of asset classes available to trade through Schwab, costs tend to be lower than average and there’s access to automated investing and financial professionals through the broker. As one of the largest brokers, Schwab provides detailed market research and analysis available to those with brokerage accounts.

Simply put, Schwab offers the best experience to the widest range of potential investors. Some investors may not find their active trading capabilities to be as robust as those offered by other brokers, and others may find that Schwab is missing an asset class or two that other brokers have (like cryptocurrency). But most investors will find their needs well met by Schwab.

Crucially, Schwab recently acquired TD Ameritrade and began the process of transitioning some of the standout services from that brokerage — including the vaunted thinkorswim trading platform. TD Ameritrade has extensive educational resources for investors, and Schwab has begun using some of that information through their brokerage as well. Now that the two brokers have joined forces, either would be a solid choice for best overall, but Schwab seems better positioned moving forward given that they’ve acquired TD Ameritrade and not the other way around.

Best for beginners: TD Ameritrade

Account minimum$0
Trading fees $0 stock and ETF trades, $0.65 per options contract
See Details

on TD Ameritrade’s secure website

Pros Cons
  • Intuitive trading platform (called thinkorswim) 
  • Unparalleled depth of educational resources and tools 
  • Extensive securities selection, including IPOs 
  • Retirement accounts are available
  • Cannot trade fractional shares 
  • $75 fee for transferring all funds out of TD Ameritrade 

Why we chose it:

TD Ameritrade is known for its depth of educational resources, making it a great option for beginners who are looking to invest through a broker for the first time. There are guided lessons, explainer articles, multimedia such as podcasts, webcasts and other videos, as well as guidance for retirement planning. As mentioned earlier, TD Ameritrade has been recently acquired by Charles Schwab and they are in the process of transitioning into one company. But for the time being, clients can expect business as usual services.

The award-winning thinkorswim trading platform has robust features for seasoned investors, but TD Ameritrade provides a comprehensive manual and other training tools to help beginners get up to speed quickly. There are also web-based and mobile app platforms that offer a simpler, more streamlined look at your portfolio and assets. TD Ameritrade also can facilitate relationships with partner financial advisors and offers options for automated investing.

Other brokerages offer educational resources and paper trading platforms as well, but TD Ameritrade has the most resources for those who are just getting started on their investment journey. As you grow more comfortable with the investing world, you’ll have the option to trade securities like foreign currencies, futures contracts, annuities and IPO offerings, which aren’t available through all brokers.

Best for high-volume trading: tastyworks

Account minimum$0
Trading fees$0 stock trades, $1.00 per options contract, $1.25 per futures contract
Pros Cons
  • Extensive educational resources, commentary and analysis through tastytrade
  • Cryptocurrency access
  • Poorly rated mobile applications 
  • Limited selection of other securities 
  • Some trades have higher-than-average fees 

Why we chose it:

Some investors are active day traders who rapidly buy and sell securities to turn a quick profit. Several platforms, including tastyworks, were designed with those investors in mind and tailor their services accordingly. tastyworks is a broker affiliated with tastytrade, a media network for retail options traders, and was built for active traders. You won’t find bond funds or fixed-income securities on tastyworks, but you will be able to swap more esoteric derivatives.

Between its solid online trading platform and the ability to trade plenty of options, active traders will have their needs met with tastytrade. Granted, there are some weaknesses (notably the poor ratings on their mobile applications, which could be a big deal to some traders) and costs for options contracts and futures contracts that are higher than other brokers (but have lower fee caps at higher volume).

What truly sets tastyworks apart is the educational resources, news and analysis that’s specifically designed for active traders through tastytrade. There’s an active community of investors, a full media channel’s worth of content, educational courses and plenty of market analysis. TradeStation, another platform for active traders, doesn’t have those kinds of resources.

Best for robo-advisor services: Charles Schwab

Account minimum$0
Trading fees $0 stock and ETF trades, $0.65 per options contract; $0 for automated robo-advisor trades
See Details

on Robo-advisor Services Charles Schwab’s secure website

Pros Cons
  • Strong suite of resources for education and analysis
  • Brokerage accounts can be enrolled Intelligent Portfolios, an automated investing service
  • Wide range of available securities 
  • Offers socially responsible investing options 
  • Futures trading costs are higher than some competitors
  • Partner financial advisors have high minimums

Why we chose it:

Charles Schwab is a longtime standout among brokerages, and its robo-advisor — called Schwab Intelligent Portfolios — is a strong choice for those who wish to place some or all of their funds in an automated investing service. There’s a reasonable minimum opening deposit ($5,000) and Schwab professionals select the ETFs that comprise Intelligent Portfolios. You’ll take a questionnaire to establish your investment goals, risk tolerance and retirement timeline and the robo-advisor will take care of your portfolio.

There’s plenty to like about Charles Schwab beyond its robo-advisor platform, which is why it was selected as the best overall broker — and many investors who use its brokerage services may never use Intelligent Portfolios. There are starter kits for newer investors and deep third-party research for more experienced traders. Some financial planning services are accessible, but other Schwab investment advisory services — like Schwab Private Client and Schwab Advisor Network — have high minimums.

MagnifyMoney compiled a list of the best robo-advisors and chose Betterment as the best overall robo-advisor. Charles Schwab was selected as the best robo-advisor for low fees. Betterment isn’t a true brokerage account, as you’re not able to place self-directed trades on the platform, so it wasn’t eligible for this list of best online brokers.

Best for retirement investing: Vanguard

Account minimum$1,000 for Vanguard Target Retirement Funds and Vanguard STAR® Funds; $3,000 for most other Vanguard funds
Trading fees $0 stock, ETF and Vanguard mutual fund trades, $1.00 per options contract
See Details

on Vanguard’s secure website

Pros Cons
  • Offers plenty of long-term accounts
  • Low costs on Vanguard mutual funds
  • Access to a robo-advisor and personal advisors
  • No access to futures trading 
  • $20 annual maintenance fee (though it can be waived) 
  • No cryptocurrency 

Why we chose it:

Vanguard is a broker that works with personal investors, retirement plan participants and institutional investors. The latter two tend to have safer, more stable investing strategies, and Vanguard’s built that way for personal investors and retail traders too. There are a lot of proprietary, broad index mutual funds with low expense ratios designed for buy-and-hold, long-term investing through the broker.

In addition to their brokerage services, Vanguard offers individual retirement accounts (IRAs) and other tax-advantaged accounts like 529 plans. You can also choose from a solid selection of bond funds and open certificates of deposit (CDs) through Vanguard. Their robo-advisor service, Vanguard Digital Advisor, integrates with brokerage accounts, and there’s access to fiduciary Vanguard financial advisors if you meet the $50,000 minimum.

If you intend to actively trade stocks or place volume trades, other brokers might be a better option. Vanguard is a strong choice if you intend to buy into the market, hold your assets for a while and maximize your long-term returns.

Best for low costs: Firstrade

Account minimum$0
Trading fees $0 stock, ETF, option and mutual fund trades
See Details

on Firstrade’s secure website

Pros Cons
  • Low trading fees, including $0 options contracts 
  • Strong mobile application ratings 

  • Access to plenty of mutual funds 
  • $55 fee for partial transfer out, $75 for full transfer 
  • No advisory services through the broker 
  • No cryptocurrency 

Why we chose it:

Firstrade launched as a discount broker back in 1985 and has been an online broker since 1997. Unlike most brokerages, Firstrade doesn’t charge a fee on options contracts, and all mutual funds are free through the brokerage. There’s no account minimum requirements or maintenance fees, but beware of the automated customer account transfer (ACAT) fees — they’re pretty typical for brokers, but they can be an unpleasant surprise when you transfer money out of your account.

There are some areas where Firstrade falls short relative to other brokers. Larger brokers tend to offer more educational resources and market analysis, though there’s some through Firstrade. Not all asset classes are available, including forex and cryptocurrency. There’s no robo-advisor service on Firstrade, and they’re not partnered with any financial advisors. But if you’re looking for a discount broker who allows you to place trades at the lowest possible cost, Firstrade is a strong choice.

Best for cryptocurrency: Webull brokerage account

Account minimum$0
Trading fees $0 commissions for stock, option, ETF and cryptocurrency trades
See Details

on Webull Brokerage Account’s secure website

Pros Cons
  • Offers access to over 25 coins 
  • No fees for various trades including cryptocurrency 

  • Strong mobile application 
  • Practice platform for no-risk trading
  • Limited selection of available securities 
  • No educational resources for beginners 

Why we chose it:

Among brokerages that offer comprehensive cryptocurrency trading services, Webull brokerage account has the best combination of available coins and low costs. In addition to common cryptocurrencies like Bitcoin and Etherium, Webull brokerage account allows you to trade a few dozen other coins. There are no fees or commissions for cryptocurrency trading, but there is a 100-point basis spread on either side of a trade (meaning there’s a 1% difference between the buy and sell price). Notably, Webull brokerage account does not permit you to transfer coins in or out of your Webull brokerage account account.

Beyond cryptocurrency trading, Webull brokerage account has a relatively limited selection of available securities on its platform. Investors can trade stocks, ETFs and options, but there’s not much beyond that: they can’t trade mutual funds, bonds, foreign currencies or derivatives like futures. There also isn’t much educational support for newer investors on Webull brokerage account, although there is a paper trading platform for practicing trading strategies.

Ultimately Webull brokerage account is a strong choice for dedicated cryptocurrency traders — there are more available coins than Robinhood and a better user experience than tastyworks. There are some drawbacks though, and you might want to choose a different broker if you are interested in buying mutual funds or other securities that aren’t available on Webull brokerage account.

Other brokers considered by MagnifyMoney

  • Interactive Brokers: A full-service online broker with features for high net worth individuals, Interactive Brokers (IBKR) is a solid all-around platform with deep research and analysis capabilities.
  • Fidelity: Fidelity is a large brokerage firm with plenty of securities available to trade, including proprietary mutual funds and a low-cost robo-advisor. They also have a partner registered investment advisor (RIA) firm.
  • E*TRADE: Because of its emphasis on low fees (including $0 stock, ETF and options contracts) E*TRADE is a solid choice for investors looking to keep costs low while still using a broker with extensive resources.
  • SoFi : A lender first and foremost, SoFi also offers online brokerage services, although they don’t provide access to mutual funds and some other securities. They do offer a range of deposit accounts for those who’d like to keep their financial services with one company.
  • Merrill Edge: Merrill Edge is owned by Bank of America. There are wealth management services through Merrill Lynch, but brokerage accounts open up access to Merrill Edge’s guided investing services, which have just a $1,000 minimum.
  • Ally Invest: A relative newcomer in the banking space, Ally is a full-service online bank that also provides brokerage services through Ally Invest. There are automated investing services through the platform as well.
  • TradeStation: TradeStation is designed for high-volume day trading, offering a robust trading platform and financial products that include not only stocks and index funds, but futures trading and cryptocurrency.
  • Robinhood: A popular, app-based investing platform among millennials, Robinhood offers fewer cryptocurrency options than some competitors but also has relatively lower costs for margin trading.

How to buy stocks online

Investors use online stock brokers to trade and hold their assets. Without a broker, individuals cannot buy and sell shares of a security on the market, in most cases. Those brokers are a conduit between investors and the markets, and certain brokers provide access to certain markets: stocks and ETFs are widely available, but other assets like foreign currency (forex) and cryptocurrency are less common.

Once you’ve opened a brokerage account, the process for buying a stock (or other asset) is usually straightforward. You’ll choose the quantity of stocks you’d like to buy at market cost and once you place that market order, your brokerage will execute your purchase for you immediately — or as soon as markets open again if the trade is made after hours. Those are the most common stock purchases, but advanced trades sometimes use limit orders or stop orders to buy and sell on the market.

Choosing an online stock broker

Most brokerages offer roughly the same set of basic services — you can buy and hold a stock through any brokerage, for example — but they each have strengths and weaknesses relative to other brokers, and some design their services around certain kinds of investors.

Plenty of variables differentiate brokers. If you plan on trading cryptocurrency through your broker, you’ll need one that offers access to those coins. If you’re a novice who wants to spend a lot of time learning about the market, you’ll want a broker with a deep library of informational content.

Knowing what kind of investor you are will help you determine which broker suits your needs the best. Large brokers like TD Ameritrade, Charles Schwab and Fidelity have deep resources and tend to offer more asset classes on their platforms. Some, like Robinhood, specialize in day trading on mobile applications. Others, like Vanguard, are designed for buy-and-hold investors with a long time horizon.

Sometimes choosing a broker can be simple. If you already have an employer-sponsored 401(k) plan through a brokerage firm that offers self-directed online stock trading, you may just decide to keep all of your accounts with one company.

Securities offered by online brokers

Some brokers offer access to many different financial instruments beyond simple stocks or bonds. Those securities are traded on exchanges much like stocks and bonds are, but some have unique attributes. Here are the key terms you should know:

  • Stock: A share of ownership in a publicly-traded company, a common unit of ownership on the stock market.
  • Exchange-traded fund (ETF): Some stocks, often in specific industries, packaged together and traded as one entity.
  • Mutual fund: A broader range of stocks that are packaged together in a broad-index fund, much like an ETF.
  • Option: A derivative financial product that offers leverage, as they give the right to buy or sell a security at a specific price on a specific future date.
  • Future: Another derivative that requires a future trade to be executed on a specific date with specific price and quantity terms.
  • Bond: A financial instrument, backed by companies or the government, that functions as a loan between the buyers and issuers with a set future payoff (often packaged together as bond funds).
  • Annuity: A fixed-income security offered by insurance companies as a long-term contract that pays a certain monthly yield indefinitely.
  • Cryptocurrency: A blockchain-supported, speculative asset created by computer-powered “mining” algorithms.

Online broker fees

Online stock brokers often try to keep costs low for investors, and there usually aren’t fees or costs associated with opening an account, keeping it open or placing normal trades. However, most brokers charge a small fee for each options contract — and there are often fees and percentage-based costs associated with trading on margin. Each brokerage has their own unique commission structure and charges their own fees, so if you plan to make more advanced trades, you should check to see which fees apply. Some brokers also charge a fee for withdrawing funds from their accounts.

Some costs that you might incur aren’t necessarily from the broker. Mutual funds tend to charge expense ratios, often less than 100 basis points, for costs related to maintaining the fund (and sometimes brokers offer access to proprietary mutual funds on their platforms). Capital gains taxes apply when stocks are sold as well.

Frequently asked questions

MagnifyMoney’s selection for best overall online broker is Charles Schwab, which recently acquired TD Ameritrade, another standout brokerage.

An online brokerage account is a service offered by a broker that allows retail investors to place trade orders on exchanges through the internet and hold assets like stocks, bonds and ETFs.

If you participate in a direct stock purchase plan or dividend reinvestment plan through a company, you can avoid using an online broker, but you’ll need one for most kinds of trades.

Methodology

MagnifyMoney reviewed 14 of the most well-known online stock brokers according to various factors, including:

  • Trading fees and commissions
  • Available securities, such as proprietary mutual funds and ETFs, cryptocurrency and derivatives
  • Advisory services, including robo-advisors and certified financial advisors
  • Educational resources, simulated investing platforms and other investor resources
  • Mobile trading apps and online brokerage platforms

The online stock brokers on this list are accessible to the average investor and allow self-directed trading. We performed a comprehensive evaluation of each broker to determine the best overall online brokerage, then assessed the brokers per the categories listed above to choose the best for the specific category.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.