The Ultimate Guide To The Best Stock Brokers 2021

With so many brokers to choose from, finding the best brokerage account can be a difficult and time-consuming task. It’s important to find a broker that meats your investment needs. Each broker should be rated in terms of trading platform, tools, services, support, fees and investment choices. Here is a detailed breakdown of the best brokerage firms, along with what you should consider when choosing the best stock broker for you.

Best Online Stock Brokerage Firms For 2021

After spending hours researching different stock brokers, we came up with the following list. We base this on numerous factors. Broker fees, platforms, securities available, minimum deposits, customer support and more was considered.

  • eToro – Best Overall
  • Plus500 – Best For International CFD Trading
  • Interactive Brokers – Best For Professional Traders
  • Robinhood – Best Budget Broker
  • TD Ameritrade – Best Educational Resources
  • Merrill Edge – Best Research Tools
  • E*Trade – Best Trading Platform
  • WeBull – Best Mobile App
  • Fidelity – Best Investment Advice
  • Ally Invest – Best for Linking Investments and Banking
  • Tradestation – Best Trading Tools

eToro – Best Broker Overall

eToro is an overall winner for beginner investors. The firm is great when it comes to crowdsourcing ideas and copy trading. This brokerage offers web and mobile trading platforms that are easy to navigate. Traders have access to a broad range of trading strategies to copy. This includes forex, CFDs, and cryptocurrencies.

A Demo Account is available with $100,000 in virtual funds.

eToro is pricey when it comes to trading forex and CFDs though. Their research tools are a bit limited.

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etoro logo
PROS
CONS
Social copying structure
Forex and CFDs fees are above average
Cryptocurrency tools
Limited research material
User-friendly platform
Ideal for beginners
Open Free Account

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Plus500 – Best For International CFD Stock Trading

Plus500 is a clear winner for day trading outside the US. It boasts over 2,000 CFDs available. This includes cryptocurrencies, forex pairs, options, and more.

Plus500 gives beginners an easy way to test out forex and CFDs trading.

The firm isn’t available to US investors though. This brokerage also has a notable lack of educational resources and research tools. New traders will have to find additional resources elsewhere.

Plus500 Logo Blue
PROS
CONS
Offers a wide range of market instruments
Not available in the US
Fast order execution
Lack of educational and research tools
Competitive Fees
User-friendly platform
Open Free Account

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Interactive Brokers – Best for Professional Trading

Interactive Brokers offers very efficient order execution, thanks to its IB SmartRouting technology. The firm quickly looks for available prices as soon as you submit an order. Your order is then immediately executed.

This brokerage caters well to active traders, but beginners will find it hard to navigate.

Interactive Brokers Singapore
PROS
CONS
Fast order execution
Only caters to experienced active traders
Full selection of securities available
Fractional shares are offered
Customized alerts on the trading platform

TD Ameritrade – Best Educational Resources

TD Ameritrade is another great choice for investors. It provides ease of use, educational content, and top-tier research tools for new investors.

The firm also offers a test driving the platform without any commitment needed.

This isn’t recommended for experienced investors though. Investors using advanced trading tools may have to use multiple platforms.

TD Ameritrade Logo
PROS
CONS
Educational resources well-suited for beginners
Need to use multiple platforms to use certain tools
Well-designed and user-friendly mobile app
24/7 reliable customer service
Free test trial offered

Robinhood – Best Budget Broker

Robinhood only offers the basics. Its strength is in its simplicity and low fees.

Robinhood has a mobile app that is fast and simple to use. The firm offers very little market research and trading tools. There are no custom price alerts available.

This broker is only for experienced investors who want a bare-bone stock trading app.

Robinhood Logo
PROS
CONS
User-friendly platform
Limited educational resources
Simple to use
No individual stock price alerts
Fractional shares offered

Merrill Edge – Best Research Tools

Merrill Edge provides top-notch stock research and analysis tools.

It also offers excellent customer service along with a great cash-back rewards program. You can sit down face-to-face with an advisor in almost any Bank of America branch nationwide.

Merrill Edge’s margin rates and per-contract fee are on the pricy side. You can't trade futures, futures options, or cryptocurrencies.

Merrill Edge Logo
PROS
CONS
Thorough stock research available
High margin rates and per-contract options fees
Various stock analysis tools offered
No futures trading, futures options, or cryptocurrency
Easy access to customer support
Cash-back rewards program

Ally Invest – Best for Linking Investments and Banking

Ally Invest is part of a financial services company that includes banking and an online brokerage. It aims at both beginner and experienced traders in the US.

The firm offers a range of commission-free mutual funds, options, and ETFs trades. It also offers forex trading, self-directed portfolio management, and free technical tools.

For futures trading and fractional shares, you'll need to look elsewhere. If you're wanting to trade smaller amounts then Ally Invest isn't the brokerage for you.

Ally Invest
PROS
CONS
Commission-free trades on a range of stocks, options, and ETFs
Only US markets available for trading
Forex trading offered
No futures and fractional shares
Strong web-based platform
Automated portfolio management option

Fidelity – Best Investment Advice

As a well-rounded brokerage, Fidelity has several managed investment options to choose from. This includes personalized portfolios and advisory services.

The firm provides premium trading platforms and research offerings. It also boasts commission-free stock, options, and ETFs trading. Plus, it offers no-fee index funds.

Fidelity also has a fast order execution time which makes it ideal for active day traders.

Some downsides are no futures and forex trading. Fidelity also has high broker-assisted fees.

PROS
CONS
Commission-free stock, options, and ETFs
High broker-assisted trade fees
Premium research offered
Lack of futures and forex trading
No-fee index funds
Strong customer service
Strong mobile app platform

WeBull- Best Mobile App

Webull's selling point is its mobile app platform. It offers better platform flexibility than its competing firms.

If you're an active trader dealing in stocks and options exclusively through a mobile app, then this is the broker for you.

WeBull Logo
PROS
CONS
Great mobile platform
No fractional shares or mutual funds
Suitable for active trading
Limited account types available
Competitive margin rates

Charles Schwab – Best for Retirement Investors

Charles Schwab offers high-quality research and technical tools. Detailed trading strategies and data are available for customers.

The firm also provides very efficient customer support in case you need assistance.

On the downside, Charles Schwab only allows for trading on US and Canadian markets. They also charge high fees for mutual fund trades.

Charles Schwab Logo
PROS
CONS
Excellent customer service
Only available for US and Canadian markets
Extensive research tools offered
High fees for mutual funds
Free stock and EFT trading offered

E*TRADE – Best Trading Platform

E*TRADE is one of the most well-known online discount brokers.

It excels with its web and mobile trading platforms. The mobile app allows you to easily trade on-the-go.

This brokerage is best for options trading, offering a fast order execution time. e*Trade offers traditional banking services like savings accounts and checking accounts.

If you're after a more passive investment approach, then you should look elsewhere. Less frequent traders will face steeper per-contract commission fees.

e*trade logo
PROS
CONS
Two comprehensive mobile apps
Higher per-contract options fees for less frequent traders
Paper trading offered
Only for US citizens
Wide range of research and analysis tools
Prebuilt Portfolio for a fast track to markets

TradeStation – Best Trading Tools

TradeStation is great for everyday traders. It focuses on market data and trade executions.

The downside is the steep learning curve. TradeStation's mobile app requires you to learn a new programming language.

But improving your skills will come as an advantage to making money. Plus, they provide a range of resources to help you.

Tradestation doesn't offer international trading. Futures, options, and cryptocurrencies are also not included in the main trading platform.

PROS
CONS
Good charting and analysis tools
Steep learning curve to develop your own trading system
Ideal for active trading
Only available to US citizens
Wide range of educational resources

What is a Stock Broker?

A stock broker buys and sells stocks and other securities on behalf of their clients. Most stockbrokers are part of a brokerage firm. They handle transactions for both individual and institutional customers.

Different stock brokers may provide a range of services, along with a range of commission fees.

Most brokers offer zero-commission trading and a wide range of research tools. There are many reliable choices out there for investors.

How does the Stock Market Work

Companies issue stock to sell on exchanges. The stock market allows buyers and sellers to negotiate online stock trades prices and trade. Investors can then buy and sell these stocks among themselves. The exchange keeps track of stock supply and demand.

Stockholders hold a small equity stake in the company. The price of these shares is set by the company at first. After the first sale, the market demand will dictate the price of the company’s shares.

The aim of investing is to put your money into one or more investment products so that your money grows over time.

How to Invest in Stocks

There are three main categories of assets that beginning investors should stick to. These are stocks, mutual funds, and ETFs (exchange-traded funds).

These bundles of different assets are designed to diversify your trading portfolios.

You trade ETFs and mutual funds similar to stocks. ETFs mimic the movement of certain classes of assets. They are generally traded passively.

You manage mutual funds more actively, so they are often more expensive. Mutual fund managers try to beat the market, whereas ETFs aim to mirror certain parts of the market.

Both stocks and ETFs constantly change prices throughout the day. Mutual funds prices are set once a day when the market closes.

Dividends

Dividends are the payments received by each shareholder in a company.

Investors can decide to reinvest these dividends. This means they buy more shares, instead of taking payment in cash.

Robo-Advisors

The first robo-advisors formed after the 2008 Financial Crisis. As a type of automated investment advisor, they aim to lower costs for investors. An algorithm generates your investment decisions and advice.

Robo-Advisors has proven to be a safe and successful way of building long-term wealth.

How Much Money do you Need to Start Investing?

Most brokerages don't have a minimum deposit to open an account and start investing in stocks. Thanks to zero-fee brokers and fractional shares, you can start investing with only $10.

But to get started properly, you need at least $200 or more. You need to be able to afford a single share of stock to start investing. This could range from $1 – $300,000.

You should also aim to properly diversify your portfolio. This means buying enough stocks in different positions.

Full-service vs Discount Brokers

Full-service brokerage offers you the whole package. This includes investment advice, financial planning, and performing analysis on your behalf. While this comes at a steeper price, it's worth it if you're new to the investment world.

Discount brokers only carry out buy and sell orders through online platforms. They offer lower commission rates on trades. This doesn't include any financial or investment advising though. You'll need to be more hands-on and educate yourself.

How to Select a Stock Broker

1. Regulation & Safety, Account Security

It’s important to be aware of the privacy and regulation policies of your online brokerage account.

Regulated brokers register with at least one financial regulating body in their country. Brokers need to follow the rules set by these bodies.

Your brokerage should have security measures in place for your accounts.

2. Active Traders vs Long-Term Investors

Active trading is making trades that only last for seconds or minutes. This takes advantage of brief fluctuations in the price of an asset. Long-term investing is more passive. It involves buying and holding trades for months or years.

Different brokers will reward different investment styles. You need to make sure that the commission rates suit your trading style.

3. Investment Products

There is a range of investment products to invest in. Stocks, bonds, options, and derivatives are the most popular types.

You need to choose a brokerage that offers the investment products you're interested in.

4. Account Types

Brokerages offer many different types of accounts. These include retirement accounts, margin accounts, and cash accounts.

You should be aware of which accounts your broker offers. There might be investment minimums for different types of accounts.

5. Educational resources

Education resources are particularly important for new investors. These can include videos, forums, and how-to articles.

If you're a beginner, you'll need advice on how to analyze data and diversify your portfolios.

6. Margin rates

Margin trading should only be for very experienced investors.

This is a method of trading assets with funds from a third party. This allows traders to access greater sums of capital.

Brokerages will charge different margin rates as interest on transactions. New investors should stay clear of margin trading.

7. Fees & Commissions

Stock brokers can charge a wide range of fees. You should be aware of all fees in advance. It's important to know how to determine commission charges.

Annual fees are better than a per transaction-fee. This avoids a broker earning commissions through unnecessary transactions.

8. Account Minimums

Most online brokers have no account minimum balance requirements for opening a brokerage account.

9. Trading Tools

A good brokerage will have a well-designed trading platform. It should be easy to navigate and intuitive. Charting tools, price alerts, and customizable screeners are key features to look for.

10. Customer Service

You should have easy access to your broker. This is especially important for beginners.

If you need urgent advice, make sure you can quickly get in touch with service staff. A good brokerage should also offer a strong tech support team.

11. Mobile Trading

Mobile trading takes place on an app on your smartphone. This is a mini version of a proper trading platform. If you're looking for easy access to your accounts, then you'll need a broker that offers a mobile trading app.

12. Stock Analysis

A good brokerage offers a thorough security analysis. This includes market data, analyst ratings, and real-time news.

Stock profiles should include historical data from the issuing company. Earnings reports, financial statements, and dividend payments should be accessible.

13. Banking Services

Most brokerage firms don't offer banking services. If you're looking for banking services then a bank broker is a good option. They provide both banking and brokerage services.

This also means you can organize your finances through a single provider.

14. Order Execution

Order execution is when a brokerage completes a buy or sell order on behalf of a client. You send all your orders to your broker to be executed.

It's important to have a broker with efficient order execution, for active day trading.

15. International Trading

If you plan to trade on foreign markets then it's important to have a brokerage that offers international trading.

16. Decide if you want access to a financial advisor

Financial advisors help keep you on track with how you spend your money. It might be worthwhile looking into a full-service broker if you’re a beginner investor.

17. Know the Broker and Its Terms and Conditions

Make sure you are well aware of the general terms and conditions before signing up for a brokerage account. It’s worthwhile doing thorough research into the firm and its reputation.

FAQ

How do I assess trading costs?

It's important that you know what the trading costs of a brokerage are. You can calculate the trading cost by comparing the percentage increase of the buy price to the initial buy price. All the brokerage fees, commission, and taxes are added as a percentage of the initial price.

What is the best stock trading platform for beginners?

Power E*TRADE is the best trading platform for beginner investors. This is a browser and mobile app platform offered by E*TRADE. This platform provides everything a beginner needs. It has paper trading, screening tools for stocks and options, and HTML5 charts with automated technical analysis.

What is the best stock trading platform for beginners?

Power E*TRADE is the best trading platform for beginner investors. This is a browser and mobile app platform offered by E*TRADE. This platform provides everything a beginner needs. It has paper trading, screening tools for stocks and options, and HTML5 charts with automated technical analysis.

What is the fastest trading platform?

Interactive Brokers offers a very efficient way of filling orders. It’s IB SmartRouting technology allows the firm to immediately execute orders.
The brokerage is also able to send dark pool orders on private exchanges.

What are the best stocks to buy for beginners?

It’s best for beginners to invest in blue-chip stocks. These are the shares in companies that are well established and financially stable. Alibaba, Amazon, Facebook, Microsoft, and Apple are good stocks for beginners to invest in.

What is the easiest way to buy stocks?

You need to open a brokerage account and deposit money into it. Opening a account is similar to opening a savings or checking account. Next, research and decide which stocks to buy. To make your trade, go to the order ticket and enter your chosen stock symbol along with the number of shares you plan to buy. Some brokers offer both taxable brokerage accounts and IRAs.

Do online brokerages also offer banking services?

No. Online brokerages only facilitate the buying and selling of your trading after you place trade orders. They do not offer any extra banking services or financial planning.
Unlike a bank account, a brokerage account holds both your money and securities.

Are online brokers safe?

As long as you choose a well-regulated broker and invest wisely, online trading is generally safe.
There is always risk involved in online trading though. That's why it's best to start with a reliable online broker.

What is a limit order?

A limit order is a type of order to buy or sell a security at a specific price or better.
Limit orders have fixed prices, which means they only fill once the limit price has been reached. These are best for when you know the exact price at which you want to buy or sell.

What is a market order?

A market order is an order to buy or sell a certain security at the best current market price available. These are the most common type of orders as they are the easiest way to buy and sell shares.

What are fractional shares?

A fractional share is a fraction of a full share in a company. Fractional shares allow investors to buy shares in a company they wouldn't be able to afford otherwise.

What is paper trading?

Paper trading allows investors to practice trading decisions without using real money. This trading platform feature lets you trade stocks, options, and ETF trades with fake money. This is a great tool for beginner investors.