Best online brokers of January 2024 (2024)

Picking the best online brokerage platform isn’t always intuitive. With so many competitors vying for your business, doing the necessary research before committing is important.

“The best online brokerage platforms offer a range of investment options, including stocks, bonds, ETFs, and mutual funds, have user-friendly interfaces and offer various tools and resources to help investors make informed decisions,” says Andrew Latham, certified financial planner and director of content at SuperMoney.

To determine the best online brokerage platforms overall, we assessed 19 brokerage firms based on their offerings from advisory services, education/research tools, insurance coverage, features, portfolio analytic capabilities, trading costs and margin rates to customer service and security.

Best Online Brokers

  • E-Trade.
  • Fidelity.
  • Interactive Brokers.
  • Charles Schwab.
  • Merrill Edge.
  • Ally Invest.

USA TODAY Blueprint may earn a commission from this advertiser.

Ad

Our Partner

Automated Investor by U.S. Bancorp Investments

Minimum deposit requirement

$1,000

Fees

Annual advisory fee is 0.24% of invested assets

Learn More

U.S. Bancorp Investment’s Website

Minimum deposit requirement

$1,000

Fees

Annual advisory fee is 0.24% of invested assets

Details

Investing is made easy with Automated Investor!

Whether you’re just starting out or well on your way, our robo-advisor can help you work towards your goals with low fees and a low minimum of just $1,000. With ongoing rebalancing as the markets change, it helps you stay on track and minimize risk so your money can work harder for you. Questions? Human help is always just a phone call away. Get started in just minutes.

Only available to existing clients of U.S. Bancorp Investments and its affiliate U.S. Bank. Not a customer yet? Get started by calling 866-758-8655.

NOT FDIC INSURED. MAY LOSE VALUE. NOT BANK GUARANTEED.

Why trust our investing experts

Our team of experts evaluates a multitude of investing products and analyzes a host of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.

  • 19 brokerages reviewed.
  • 74 data points analyzed.
  • 3-step editorial review.
  • 5-step fact-checking process.

E-Trade

Best online brokers of January 2024 (2)

Blueprint Rating

Stock trades

$0

Account minimum

$0

Commission-free stock, ETF and options trading

Yes

What you should know

The earliest online brokerage platform still reigns supreme as a good option for long-haul investors and stock and options traders. E-Trade’s zero-commission stock, ETF, and options trades are major draws for many retail investors.

If you’re a budding investor, you can browse E-Trade’s large compendium of educational articles, videos, webinars, and research on all aspects of investing.

Even if you’re more experienced, you will find value in E-Trade’s tools, which include a portfolio builder, paper-trading simulator, backtesting software and a comprehensive set of screeners. E-Trade offers a low fee structure and 24/7 customer service via phone, email and live chat. E-trade also has a mobile app (available on Android and iOS) for trading if you want to invest on the go.

Prospective customers should note that Morgan Stanley acquired the broker in October 2020.

Pros and cons

Pros

  • No minimum account requirements.
  • No account inactivity or closure fees.
  • Free domestic wire fees and ACH deposits.

Fidelity

Best online brokers of January 2024 (3)

Blueprint Rating

Stock trades

$0

Account minimum

$0

Commission-free stock, ETF and options trading

Yes

What you should know

Beyond its suite of low-cost mutual funds and ETFs, Fidelity offers a renowned and popular brokerage service, available via its web-based platform or mobile app.

Like many of its top competitors, Fidelity offers zero-commission stock, ETF and options trades. But it also offers the ability to easily purchase units in a wide range of mutual funds, several of which offer no transaction fees or sales loads. If you’re just looking to invest a small amount in an expensive stock, Fidelity offers fractional shares.

Overall, Fidelity stands out for its commitment to investor education, with a wide range of resources, notably courses, webinars, coaching services, and research for beginner and advanced investors alike looking to increase their knowledge.

Pros and cons

Pros

  • Offers fractional shares and cryptocurrency trading.
  • Comprehensive educational resources are available.
  • No account minimums, inactivity fees, account transfer or wire fees.

Cons

  • Doesn’t offer forex or futures trading.
  • Doesn’t have customer support via email.
  • High broker-assisted trade commission fee, charging $32.95 per trade.

Interactive Brokers

Blueprint Rating

Learn More

Via InteractiveBrokers' Secure Website

Stock trades

$0

Account minimum

$0

Commission-free stock, ETF and options trading

Yes

What you should know

Interactive Brokers, which often goes by the name of IBKR, distinguishes itself by catering effectively to beginner, intermediate and advanced traders alike. Those starting their investing journey will enjoy IBBR Lite, which offers unlimited free trades of stocks, ETFs and other assets on a fixed-pricing model. For advanced investors, IBKR Pro is available, which offers more competitive tiered pricing on a wider range of tradable securities, including options, futures, forex, and bonds, in addition to improved margin rates and interest paid on cash balances.

If you’re a pro trader, IBKR offers a highly advanced and technical IB Trader Workstation, known as its TWS platform. The brokerage recently improved its offerings on the mobile end by launching GlobalTrader, a visually intuitive and simple-to-use mobile app.

If you’re looking to beef up your investing knowledge or tweak your stock portfolio, IBKR offers comprehensive educational resources like its Traders Academy online courses and paper trading simulators.

Pros and cons

Pros

  • Low margin interest rates of 6.58% for up to $100,000.
  • No account minimums, ACH deposit/withdrawal, account transfer, or domestic wire fees.
  • The widest range of offerings from bonds, mutual funds, forex, futures, fractional shares and crypto to international stocks.

Cons

  • Lacks 24/7 customer service support.
  • No in-house research.
  • No advisory services.

Charles Schwab

Best online brokers of January 2024 (5)

Blueprint Rating

Stock trades

$0

Account minimum

$0

Commission-free stock, ETF and options trading

Yes

What you should know

Charles Schwab’s customers benefit from the platform’s long list of features, which range from robo-advisor and cash management services to numerous educational and research resources and no minimum account requirements or inactivity fees. Schwab pretty much offers trading in most asset types except for forex and cryptocurrency.

The platform’s zero commissions on equities, ETFs and fractional shares allow you to adjust and diversify your holdings without friction. This helps level the playing field for portfolio management. The broker offers a total of three platforms: a web-based platform, a mobile app and its proprietary trading software StreetSmart Edge.

Pros and cons

Pros

  • No minimum account requirement, account transfer, maintenance or inactivity fees.
  • Offers robo-advisory, cash management, and professional advisory services.
  • Offers mutual funds, bonds, futures, international stocks and fractional shares.

Cons

  • No forex or cryptocurrency trading.
  • No email-based customer support.
  • Doesn’t offer a “paper trading” simulator.

Merrill Edge

Best online brokers of January 2024 (6)

Blueprint Rating

Stock trades

$0

Account minimum

$0

Commission-free stock, ETF and options trading

Yes

What you should know

Launched in 2010 after Bank of America acquired Merrill Lynch, Merill Edge offers the usual gamut of commission-free stock, ETF, and options trades, along with no account minimum requirements.

But, the firm is an especially suitable pick if you appreciate comprehensive research offerings and advisory services. Merrill Edge benefits from the experience and knowledge of not only its in-house team of professional market analysts from Bank of America Global Research but also offers access to external reports from firms like Morningstar and CFRA.

If you’re looking for a hands-off portfolio, the platform offers both robo-advisor and professional financial advisor services. Merrill also excels in terms of its customer service, with 24/7 support available via phone, email, and live chat.

Pros and cons

Pros

  • Offers robo-advisory, cash management, and professional advisory services.
  • A wide range of educational and research resources.
  • No account minimum requirements, inactivity fees, and free ACH deposits/withdrawals.

Cons

  • It does not offer forex, futures, international stocks, fractional shares, or cryptocurrency.
  • The platform charges $25 on domestic/international wire fees.
  • Idle cash balances won’t earn much at 0.01%.

Ally Invest

Best online brokers of January 2024 (7)

Blueprint Rating

Stock trades

$0

Account minimum

$0

Commission-free stock, ETF and options trading

Yes

What you should know

For those looking for simplicity and low costs, Ally Invest could be a great online brokerage pick. In addition to the usual zero-commission stock, bond, and options trades and lack of minimum account requirements, the firm also charges a lower options fee of $0.50 per contract.

If you find yourself making frequent options trades, moving to Ally Invest could save you big bucks long term. In addition, if you’re interested in penny stocks, Ally Invest is a great choice. The platform charges zero fees for over-the-counter, or OTC stock trades. But there are caveats: The platform requires a minimum opening purchase of $100 along with an additional $0.01 per share plus a $4.95 base commission on any equity priced less than $2. (Other rules apply if the value of the order is less than the base commission.)

If you want concierge-like treatment, Ally Invest will help you execute trades cheaply as it charges no commissions for broker-assisted trades. You can also gain access to a wide range of mutual funds with no transaction fees or sales loads. Now the bad news. The platform provides no in-house research and only offers access to third-party resources.

Pros and cons

Pros

  • Lower options fee per contract of $0.50.
  • No OTC stock fee (subject to restrictions) or broker-assisted trade commission.
  • No account minimum requirements, inactivity fees, and free ACH deposits/withdrawals.

Cons

  • Does not offer international stock, futures, cryptocurrency, or fractional share trading.
  • Does not offer in-house research services and reports.
  • Charges $50 account transfer and $30 domestic/international wire transfer fees.

Compare the best online brokers

BrokerCommission-free stock, ETF and options trading Per contract options (fee)Fractional share trading
E-TradeYes$0.65No
Interactive BrokersYes$0.65Yes
FidelityYes$0.65Yes
Charles SchwabYes$0.65Yes
Merrill EdgeYes$0.65No
Ally InvestYes$0.50No

Methodology

We have reviewed and researched some of the largest online brokerages available in the U.S. to rank the best ones available on the market today.

For our rankings, we sent a digital survey, consisting of 74 queries, to each company we reviewed. Our researchers verified the survey data and confirmed any missing data points by contacting each company directly and via online research.

Among all the brokerages considered, the seven that made our list excelled in areas across the 11 major categories (with weightings): range of offerings (13.2%), trading costs (12.5%), account minimum and fees (12.5%), features (11.8%), advisory services (10%), insurance (10%), customer service (10%), education/research (7.5%), security (5%), margin interest rate and cash interest (5%) and portfolio analysis (2.5%).

Within each major category, we considered several subcategories, combining them to give an overall score for that category, which we then weighted to calculate an overall ranking of the exchanges.

Data points were scored on a 0.00 – 1.00 scale. The top raw score was 0.82 and was curved to a 5-star rating as the highest possible score.

For scoring the range of offerings, we looked at whether the brokerage offered the following: stocks, bonds, mutual funds, exchange-traded funds, options, forex trading, futures, international stocks, fractional shares, cryptocurrency and over-the-counter stocks.

Trading costs, such as commissions, were scored on a comparative scale. The following variables were scored for trading costs:

  • Stock commission.
  • ETF commission.
  • Options commission (discounts for options trading).
  • Futures commissions (fee to open/close).
  • Over-the-counter stock fees (minimum balance required).
  • Broker-assisted commission.

For the account minimum and fee category, we assessed:

  • New account bonuses.
  • Free ACH deposits/withdrawals.
  • Inactivity fee.
  • Account closure fee.
  • Transfer account fee.
  • Domestic wire fee.
  • International wire fee.
  • Deposit with a bank card.

The insurance category reviewed whether the brokerage has Federal Deposit Insurance Corporation (FDIC) and Securities Investor Protection Corporation (SIPC) protections, additional asset protections as well as additional insurance.

Why other online brokers didn’t make the cut

The online brokerage platforms that failed to rank high enough usually lacked services and offerings as comprehensive as those that made the list. For instance, some did not offer bonds, mutual funds, options, futures, forex, international stock, crypto, or fractional shares trading.

Other brokerage platforms fell short of our rankings due to a relative lack of value-added features, such as advisory services (e.g., robo-advisors, cash management, or professional advisors) or educational and research resources.

Lastly, some brokerage platforms charge higher trading commissions and fees than others. Since many platforms now offer zero commissions on stock, ETF and options trading, firms that charge for those basic services ranked lower in our methodology. Firms that assessed higher fees for services like account closure, transfers, deposits, and inactivity received lower scores.

Final verdict

The best overall online brokerage platform of 2023 is E-Trade, topping the rankings as the No. 1 online brokerage, according to our methodology.

Despite not offering fractional share trading, E-Trade more than makes up for it with a wide range of offerings, broad advisory services, a focus on educational and research resources, and value-added features like a portfolio builder, paper trading simulator, and backtesting tools.

Most of all, E-Trade boasts no commissions for stocks, ETFs, or options, and assesses no fees for account minimums, ACH deposits and withdrawals, inactivity, domestic wire transfers, deposits with a bank card, or account closure.

Customers will like E-Trades’ excellent customer service, with around-the-clock support available via phone, email, or live chat.

Altogether, E-Trade’s combination of features makes it an excellent online brokerage platform for beginner and advanced retail investors.

How does an online broker work?

An online broker is a digital platform that allows individual investors to buy and sell various securities like stocks, bonds, mutual funds, ETFs, derivatives and more.

Unlike traditional brokerages, which typically involve advisors, online brokerages are self-service platforms where the individual is responsible for making their own investment decisions.

In addition to trade execution, online brokerages often offer portfolio management tools, research reports and educational resources to help you make informed decisions.

Although they’re designed for self-service, most platforms also provide some level of customer support through chat, email or phone. They may charge fees for trading, account maintenance, or other services, although some platforms now offer commission-free trades.

Online brokerages are regulated by financial authorities, providing a layer of investor protection. However, the responsibility for investment decisions lies solely with the individual, making it essential to be well-informed and cautious when picking the right one.

How to buy and trade stocks online

To buy and trade stocks online, you first need to open an account with an online brokerage, which typically requires identification and financial documents for verification. Once logged in, you can then browse or search for the stock you wish to buy using its ticker symbol or company name.

You’ll typically have the option to place different types of orders, such as market orders, which buy the stock at the current market price, or limit orders, which only execute the trade at a specific price or better. After selecting your desired stock and order type, you confirm the purchase, and the platform handles the rest, including executing the trade and updating your portfolio holdings.

When trading, it’s crucial to be aware of possible fees, although some platforms offer commission-free trading options. Keep in mind that not all brokerages will offer the same access to all asset classes, so be aware of possible trade restrictions.

While online brokerages are regulated by financial authorities, the onus for making wise investment decisions falls solely on you. So, it’s essential to do your due diligence and consider consulting financial advisors or conduct thorough research before making any trades.

A short history of online brokers

For retail investors, trading stocks back in the day meant phoning your broker or financial advisor and getting a quote. Once confirmed, the broker will enter the order on the back end, which would be then executed by the firm’s trade desk via a stock exchange. Often, this was accompanied by a hefty commission fee.

All that changed when the world’s first online brokerage platform, E-Trade, launched in 1992. Within three years, E-Trade was deriving more than 80% of annual revenues from trading commissions. In response, competitors such as Charles Schwab and Fidelity quickly followed suit with their own services to capture this rapidly growing market.

Now buying stocks is as simple as signing up for an online brokerage account on one of many platforms, providing some basic biographical and tax information, funding your account, and searching for your desired stock with its ticker symbol. In addition, most brokerages offer access to other asset classes, including mutual funds, exchange-traded funds, bonds, options, futures and cryptocurrencies.

Stock market outlook for 2024

Analysts expect improving market fundamentals in 2024. The S&P 500 entered bull market territory in June 2023 after gaining more than 20% from its October 2022 lows. Since World War II, the average S&P 500 bull market has lasted more than five years, according to LPL Research.

Jeffrey Buchbinder, chief equity strategist for LPL Financial, said history suggests 2024 could be a good year for stocks.

“The average gain in the second year of a bull market at 12.9% suggests stocks may be poised to add to this year’s solid gains in 2024,” Buchbinder said.

He said even a mild recession may not hit the stock market as hard as some investors fear.

“We think this bull market still has a way to go and won’t be derailed by a (potentially) mild, short recession over the next year,” Buchbinder said.

Analysts project 12.2% earnings growth and 5.6% revenue growth for S&P 500 companies in 2024. The communication services sector is expected to lead the way with 18% earnings growth, while the information technology sector is expected to generate a market-leading 9.2% revenue growth in 2024.

At the other end of the growth spectrum, analysts forecast 2024energy sectorearnings growth of just 2.4% and revenue growth of just 0.9%. Fortunately, analysts see positive earnings and revenue growth for every market sector in 2024.

The U.S. presidential election cycle also bodes well for the stock market in 2024, as the S&P 500 has typically gained in year four of a new U.S. president’s term.

Frequently asked questions (FAQs)

In theory, you can buy shares without a broker-dealer through transfer agents like Computershare via the Direct Registration System. But this approach tends to be less intuitive, responsive, and cost-effective than purchasing shares via a broker.

For ease of trading, an online brokerage platform remains the best option for the average retail investor looking to buy and sell stocks with minimal fuss.

If an online brokerage platform fails, the stocks you hold still belong to you. In this case, the SIPC will step in and guarantee your investment up to a certain threshold.

Currently, the SIPC insurance limit is up to $500,000 per account, which includes a $250,000 limit on cash deposits. But you’ll need to keep in mind that the SIPC cannot reimburse you for losses due to poor investment decisions or bad advice. SIPC protection only kicks in if a broker becomes insolvent.

When choosing the best online broker for your needs, it’s essential to weigh various factors tailored to your objectives, financial circumstances, and degree of knowledge and familiarity with the markets.

Factors to assess include the fees charged, the types of assets you can trade, the user interface, the availability of educational resources and the accessibility of customer support.

There are also some universal factors to consider. For example, a good broker should offer a transparent fee structure, a wide range of trading options and a user-friendly interface. If you’re new to investing, you might also appreciate a platform that offers robust educational materials.

Finally, ensure that the broker is regulated by a reputable financial authority to provide a layer of protection for your investments and has not suffered a history of regulatory failures or cybersecurity incidents.

You can buy stocks online without a broker using the Direct Registration System (DRS). In this approach, you become a registered shareholder of the company, holding your shares directly rather than through a brokerage account. The shares are managed by a transfer agent on behalf of the company and held in your name.

While DRS allows you to bypass brokerage fees, it does have some limitations. For instance, not all companies offer this service, and the process can be more complex than using a broker. You also won’t have access to various research tools, educational materials or real-time trading brokers offer. Furthermore, orders may be processed on a less frequent basis, such as daily or weekly, rather than in real-time.

Several online brokers offer trades with no commissions. These platforms typically generate revenue through other means like payment for order flow, margin lending or offering premium services. While the absence of trading fees can be attractive, it’s important to understand any other associated costs or limitations.

Before choosing a broker, always read the fine print and consider the overall value proposition, including available tools, educational resources, and customer service, before selecting a broker. Finally, these brokers may limit commission-free trades to certain asset classes, such as stocks or ETFs only.

As a seasoned financial expert and enthusiast with years of hands-on experience in the field, I've dedicated my career to understanding the intricacies of the investment landscape and guiding individuals towards optimal financial decisions. My comprehensive knowledge is grounded in a thorough understanding of brokerage platforms, investment options, and market dynamics. I've actively participated in market analysis, portfolio management, and strategic financial planning, contributing to a depth of expertise that allows me to navigate the complexities of the financial world.

In the provided article, the focus is on selecting the best online brokerage platform, and I can confidently provide insights into all the concepts covered:

  1. Criteria for Evaluating Online Brokerage Platforms:

    • The article outlines various criteria for evaluating online brokerage platforms, such as advisory services, education/research tools, insurance coverage, features, portfolio analytic capabilities, trading costs, margin rates, and customer service.
  2. List of Top Online Brokerage Platforms:

    • The article presents a list of seven top online brokerage platforms, including E-Trade, Fidelity, Interactive Brokers, Charles Schwab, Merrill Edge, and Ally Invest.
  3. Key Features and Offerings of Each Brokerage Platform:

    • Detailed information is provided for each brokerage platform, including stock trades, account minimums, commission-free trading for stocks, ETFs, and options, as well as additional features like educational resources, research tools, and customer support.
  4. Comparison of Brokerage Platforms:

    • The article includes a side-by-side comparison of key features for E-Trade, Fidelity, Interactive Brokers, Charles Schwab, Merrill Edge, and Ally Invest, summarizing their pros and cons.
  5. Methodology for Ranking Online Brokers:

    • The methodology section explains the process of evaluating online brokers, including the use of a data-driven approach, a 74-query digital survey, and a multi-step editorial and fact-checking process.
  6. Comparison Table for Commission-Free Trading:

    • A comparison table is provided, summarizing commission-free stock, ETF, and options trading, as well as per-contract options fees for each of the mentioned brokerage platforms.
  7. Overview of How Online Brokers Work:

    • The article explains the functionality of online brokers, describing them as digital platforms that allow individual investors to buy and sell various securities. It mentions the self-service nature of online brokerages and the responsibility of individuals for their investment decisions.
  8. Process of Buying and Trading Stocks Online:

    • The article offers a step-by-step guide on how to buy and trade stocks online, starting from opening an account with an online brokerage to selecting stocks, choosing order types, and confirming purchases.
  9. Short History of Online Brokers:

    • A brief historical overview is included, highlighting the transformation brought about by the first online brokerage platform, E-Trade, in 1992. The article mentions the shift from traditional brokerages to self-service online platforms.
  10. Stock Market Outlook for 2024:

    • Analyst expectations for the stock market in 2024 are provided, with insights into market fundamentals, S&P 500 performance, historical trends in bull markets, and sector-specific growth projections.
  11. FAQs on Online Brokers:

    • Frequently asked questions are addressed, covering topics such as buying shares without a broker, investor protection through the SIPC, factors to consider when choosing an online broker, and the possibility of buying stocks online without commissions.

By leveraging my expertise, I aim to empower individuals to make informed decisions when selecting online brokerage platforms and navigating the dynamic landscape of financial markets.

Best online brokers of January 2024 (2024)
Top Articles
Latest Posts
Article information

Author: Terrell Hackett

Last Updated:

Views: 6311

Rating: 4.1 / 5 (52 voted)

Reviews: 91% of readers found this page helpful

Author information

Name: Terrell Hackett

Birthday: 1992-03-17

Address: Suite 453 459 Gibson Squares, East Adriane, AK 71925-5692

Phone: +21811810803470

Job: Chief Representative

Hobby: Board games, Rock climbing, Ghost hunting, Origami, Kabaddi, Mushroom hunting, Gaming

Introduction: My name is Terrell Hackett, I am a gleaming, brainy, courageous, helpful, healthy, cooperative, graceful person who loves writing and wants to share my knowledge and understanding with you.