Best Online Brokerage Accounts

Best Online Brokerage Accounts in 2021


The best online brokerage accounts to open. Top low cost discount brokers offering IRA and taxable brokerage accounts.



Ally Invest rating

Ally Invest

Ally Invest: Best Brokerage Account Fees


InvestmentsCommissions
Stocks and ETFs $0
Options $0.50 per contract
Mutual funds $9.95
Bonds $1 per bond with $10 minimum, $250 maximum
Treasuries commission-free
Certificates of Deposit (CDs) $24.95

Investments stocks, options, mutual funds, bonds, CDs, forex, treasuries, ETFs
Ally Invest minimum deposit to open account $0 for cash account, $2,000 for margin account
FeesAlly Invest fees
Promotion link Ally Invest promotions


Ally Invest Advantages

  • $0 or very low commissions
  • $0 to open an account
  • No minimums, or maintenance, or hidden fees
  • Free real-time quotes
  • Fee-free IRAs
  • Free DRIPs (dividend reinvestment plans)
  • Low cost professional portfolio management


Ally Invest Review


With $0 stock and ETF commissions, Ally Invest is one of the least expensive online brokers. Throw in 50¢ option contracts, and this company is certain to attract options traders, too. Ally Invest is one of the few brokers to also offer forex trading. A basic web-based platform is available to beginners, while a more advanced desktop system is available to active traders. A free mobile app helps traders follow the market, while S&P Capital IQ stock reports are also available at no cost.

Read full Ally Invest Review »


Promotion link

Up to $3,000 cash bonus + $0 commission trades.

Open Ally Invest Account



TD Ameritrade rating

TD Ameritrade


TD Ameritrade: Best Brokerage Account Fees


InvestmentsCommissions
Stocks and ETFs $0
Stocks and ETFs broker assisted $25
Options $0.65 per contract
No-load mutual funds $49.99
Treasuries at auction $25
All other bonds and CMOs, CDs on a net yield basis
Futures $2.25 per contract plus exchange & regulatory fees
Forex Non-commission currency pairs trade in increments of 10,000 units (and do not contain a "#" symbol suffix). There are no additional fees or charges.

Investments stocks, mutual funds, options, ETFs, bonds, CDs, UITs, futures, and forex
TD Ameritrade minimum deposit to open account $0 for cash account, $2,000 for margin account
FeesTD Ameritrade fees


TD Ameritrade Advantages

  • $0 commissions on stocks and ETFs
  • Very few fees and no surcharges
  • Large and well-known company with 450 local branches
  • Excellent trading platform called Thinkorswim
  • Users can practice trading without risking real money using PaperMoney virtual trading
  • Easy access to myTRADE online trader community
  • No account maintenance or inactivity fees
  • Free streaming quotes, including Level II
  • Best selection of independent, third-party research from 13 firms (Standard & Poor's, Morningstar, Jaywalk, TheStreet, etc.)
  • Large number of mutual funds - around 13,000 available; 4,200 NTF (no-transaction fee) funds
  • Free DRIP (dividend reinvestment plan)
  • No-fee IRA accounts


Best Brokerage Account Review


Traders who need advanced technology but don't want to pay for it should consider TD Ameritrade. The broker has a sophisticated website plus a professional desktop trading platform. All are available with no frequent trader requirements. Traders can use three different mobile apps, one of which has very advanced charting capability. These platforms are also free to use. To top it off, TD Ameritrade clients can buy and sell all stocks and ETFs commission-free. The broker provides 4,200+ no commission mutual funds.

Read full TD Ameritrade Review »


Promotion link

$0 commissions + transfer fee reimbursement.

Open TD Ameritrade Account


WeBull rating

Webull


Webull: Best Brokerage Account Fees


InvestmentsCommissions
Stocks and ETFs $0
Options $0
Cryptocurrencies $0
Mutual funds not offered
Treasury Bills, Notes, Municipal and Agency Bonds, Zeros & Strips not offered

Investments stocks, options, cryptocurrencies, ETFs
Minimum deposit to open account $0 for cash account, $2,000 for margin account
FeesWeBull fees
Promotion WeBull promotions


Webull Advantages



Webull Review


Investors who want the lowest possible pricing should take a look at Webull. The broker charges $0 commission on stocks, ETFs, options, and crypto trades. There are also no account fees whatsoever. Webull makes money on margin rates and other optional services.

Read full Webull Review »


Promotion link

Get 2 FREE stocks valued up to $1,850.

Open WeBull Account



Overview of Brokerage Accounts


A bank account typically pays somewhere between 0% and 1% interest, and some people simply aren’t satisfied with this level of return. So they open a different type of financial account, called a brokerage account, which can deliver anywhere from -100% to more than 1,000%. Welcome to the world of brokerage firms. We’re going to explain everything you need to know to get started, how to avoid common pitfalls, and how to succeed.


Bank Accounts


Perhaps the best way to introduce a brokerage account is to state what it is not. It’s not a bank account. A bank account’s principal (the amount you deposit) is guaranteed not to go down (or up). Sometimes a bank pays no interest on your deposit. So if you give the bank $3,000 at the start of the year, at the end you’ll still have $3,000. And that three grand is guaranteed by the government.

Some bank accounts may pay a small amount of interest at the end of each month. A rate of 0.01% is not uncommon. This rate can change, although the principal is always guaranteed.


Brokerage Accounts


Unlike a bank account, a brokerage account’s balance usually fluctuates from day to day, and sometimes even from minute to minute. A brokerage account is where you buy securities. These are investments like stocks, bonds, mutual funds, exchange-traded funds, and lesser-known items like option contracts. Because these assets change in price from one day to the next, the brokerage account that holds them will experience a change in value as well. Stocks, ETF’s, and options can fluctuate minute by minute or even second by second. This produces a totally different world than a bank account, which is stable and guaranteed.


Best brokerage accounts


Protections


Most banks in the U.S. are protected by the FDIC. This government insurance does not extend to brokerage accounts. However, there is a scheme called SIPC, which guarantees the number of shares in an account. It does not guarantee share price. This distinction is very important. If you buy 100 shares of stock XYZ at $25, and the price goes down to $4, SIPC does not cover the decline in value. It only makes sure that the 100 shares are still in your account.


Types of Brokerage Accounts


There are a variety of brokerage accounts that can be opened. They can generally be divided into retirement and non-retirement accounts. An Individual Retirement Account, for example, can be opened as a brokerage account. Many brokers offer IRA’s. There are also brokerage accounts that are opened by institutions. A brokerage account can also be opened as a joint or individual account.

A brokerage account is opened as either a margin or non-margin account. The non-margin version is often called a cash account. This simply means that trades placed in the account must be funded with a cash balance. Margin is a type of loan, and if you open this type of account, you can buy securities without depositing any money. To do this you first buy some securities, such as stocks or mutual funds. These assets serve as collateral for the loan, which the broker provides at a margin interest rate. When you deposit cash equal to the amount of securities you purchased, your account is no longer charged interest.


Choosing a Best Brokerage Account


Before you choose a brokerage account type, you want to think about how you will use it. If you plan to trade frequently, a margin account is very convenient. If your goal is to save for retirement, opening a solo 401(k) might be a wise move. Keep in mind that a retirement account under government regulations cannot be setup with margin capability. If you plan to trade with a spouse, a joint account would be a good choice.


Brokerage account


Find the Right Brokerage Account


Perhaps the most important decision is choosing the right broker to open the account with. Some brokers emphasize low commissions (trading fees) like Schwab, while others have a large selection of mutual funds, like Vanguard. Yet others offer a long list of ETF’s that are free to trade. TD Ameritrade is a good example. Some brokers offer good IRA pricing, while others charge a yearly fee for retirement accounts. TradeStation, for example, charges a $35 annual IRA fee, while Firstrade charges nothing.

Most brokers today offer quick and easy on-line applications that are very user-friendly and will lead you step-by-step to get your first securities account up and running. Sometimes lucrative bonuses are available to first-time customers, including cash prizes and free trades.


Do’s and Don’ts


If you’re a beginner, you may want to start with bond funds. These securities tend to have stable prices (low volatility), which takes a lot of the stress out of investing. Do get your feet wet gradually. If you haven’t used any trading software before, do try to find a broker that offers a paper trading version. This will let you practice with a replica currency. Webull, for example, offers a platform that has a paper trading version.

Don’t open a brokerage account and start trading the most risky stocks you can find. These investments are only for experienced and seasoned traders. Don’t trade securities without doing an adequate amount of research. Some brokers, like Fidelity, provide a lot of educational and research materials. Don’t take on too much risk too early in your trading journey. Small-cap technology stocks, for instance, are riskier than large-cap consumer staple stocks.


Best Online Brokerage Accounts Recommendations


Many brokers have customer service reps who specialize in helping new clients open an account. Contacting a firm and asking any questions you have is a good place to start and an opportunity to test the company’s attention to the customer. Also keep in mind that like a bank account, a brokerage account can be closed or moved if you’re not happy.