10 “Best” Free Stock Trading Brokers (in 2020)

The Best Free Trading Brokers

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In the past, if you wanted to invest your money in the stock market, you would have to go to physical marketplaces and get the help of stockbrokers to invest funds. The fact that you needed an expert in order to invest made investing something that was mostly reserved for the already well-off

Thanks to the ,internet though, the barrier for entry to stock trading has never been easier to clear. Now that most stock transactions take place online, the demand for full-service brokerage firms has declined as people can use the tools of the web to invest their own funds.

While traditional physical stock exchanges still exist, the New York Stock Exchange being a famous example, the majority of stock transactions take place in the virtual world.

In response to this transition to the digital stock market, several brokerage firms have started their own online brokerage firms. These online brokerage firms consist of a simple interface for making stock orders and facilitating transactions. Even better, a very large portion of these online brokers are completely free to use or don’t charge a commission fee on transactions.

Today, we’re going to cover our picks for the top 10 best free stock trading brokers for beginners. These brokers we selected are all easy to use, provide good educational materials and resources so you can brush up on your market knowledge, and, best of all, are 100% free to use.

What to Look For in an Online Broker

Before we get started, here is a list of what kinds of things to look for when choosing an online broker. Here is a quick list of what we are going to cover and we will go more in-depth for each entry below.

  • Commissions
  • Account minimums
  • Fractional stock trading
  • Account fees
  • Advisory services
  • Customer protections
  • Promotions

Commissions

Most brokers have a wide selection of individual stocks, exchange-traded funds, mutual funds, bonds, and more. A handful of brokers might also give access to forex trades and cryptocurrency trades. You need to pay attention to the commission fees for each kind of trade as brokers may have different commissions on different types of securities.

  • Stocks: Some brokers charge a commission on individual stock sales/purchases, but many online brokers have recently lowered these prices or eliminated them entirely. In fact, every option we will be covering on our list has 0 commissions on regular stock trades. That means you can trade stock as much as you want and never have to pay and trading fees.
  • Mutual funds: Most brokers give the option to invest in mutual funds. Unlike individual stocks, most online brokers still charge a commission on trading mutual funds, usually to the tune of $0.15-$1.50 per transaction. Most online brokers do have a selection of commission-free mutual funds you can trade.
  • Exchange-traded funds: ETFs are traded intraday like stocks. Most of the time, brokers have small commissions on ETF trades. Like mutual funds, brokers often have a selection of commission-free ETFs you can trade.
  • Bonds: Most brokers still require a commission when trading bonds. These commissions usually have minimum and maximum charges depending on how many bonds you want to buy or sell.
  • Options-contracts: Most brokers also charge a commission fee and a per-contract fee for options. This per-contract fee usually falls within the $0.15-$1.50 range. Some brokers may only charge a commission fee on options, or only a per-contract fee.

Like we said earlier, most big brokerage firms have either significantly reduced or outright eliminated commission fees on regular stock trades, and most have commission-free options for the other kinds of securities, except for options-contract.

Account Minimums

Most big-name brokers have also eliminated account minimums, meaning you don’t have to deposit a certain amount before you start trading. Once again, every broker on our list has no account minimums.

Some brokers do charge minimums though and these can be as low as $100 or as high as $5,000. The average account minimum for these brokers seems to be around the $500 range. Big-name money managers that handle ultra-wealthy clients can have minimums as high as $100K-$200K.

Also, some brokers may require minimum investments for certain types of securities such as mutual funds. So while you might be able to trade stock without a minimum account balance, you may not be able to trade mutual funds without one.

Keep in mind that the less money you deposit into your brokerage account the more difficult it might be to start investing. Under a certain amount and you might find it hard to buy any stock or have a diversified portfolio.

Fractional Stock Trading

A fractional share is less than one full share of equity. In the past, fractional shares were usually not available to the market but more brokers are giving clients the option to invest in fractional shares.

The benefit of fractional shares is that they are a way for investors to purchase stock when they cannot afford a full share. This is mostly the case with high-value stocks like Amazon or Google.

Currently, the value of a single share of Amazon is $1,877. That is a pretty high value and many investors starting out probably don’t have the capital to buy even a single share of Amazon stock.

They can, however, purchase a fraction of that single share and own a portion of it. Brokerages buy and sell fractional shares by combining them until it makes 1 full share.

Fractional shares are a great feature to look for in online brokers if you are an individual investor. They offer a way for you to get into the market with limited funds.

If your broker has no account minimums and offers fractional share trading, you can actually get a decently diversified portfolio with only $100-$500.

Account Fees

Most brokers charge at least some account fees, but you can minimize them. Common fees include annual account maintenance fees, inactivity fees, or extra charges for research and data. Luckily, the majority of online discount brokers have done away with the majority of these fees.

Other common fees involve fees for transferring funds to your account or closing out your account. Some brokers will let you transfer funds from an existing outside account for free.

Advisory Services

Couple Seeking Advisory Services From Online Stock BrokersMost online discount brokers also give the option for extra advice or guidance for an extra fee. These materials can be in the form of research briefs, investing articles, market reports, or one-on-one guidance with a professional financial manager. Even if you prefer to fly solo and manage your funds on your own, it can be nice to have access to the advice of experts if you need it.

A good portion of online brokers have some research materials available for free; things like articles, webinars, guides, and more. If you are a beginner looking to get into the world of investing, then it’s recommended that you find a broker that has good research materials or advisory services. Most of the time, these things are charged on a per-use basis so you can choose to not use them and not incur any service fees.

Customer Protections

It is important to have protection in place in case something goes wrong with your broker or your account. Brokers generally do not have any protections in place for investment losses, but they usually have some kind of protection from fraud.

Make sure your broker has some kind of protection policies in place, including:

  • How they protect you in the case of a hacked account
  • How they handle your information and whether they sell data to third-parties.
  • How secure your account is. This includes things like security protocols, firewalls, account surveillance, and account authentication.

The last thing you want is for your account or funds to be compromised due to hacker activity or brokerage fraud. That’s why you need to make sure your chosen broker complies with federal regulations on the financial industry and have the right insurance in the case of brokerage fraud. Any broker you choose should fit the 3 following conditions:

    • They offer FDIC insured accounts: Any money you deposit in your brokerage account should be federally insured. This means that if the brokerage fails, your money will be insured and you won’t lose anything. The FDIC insures individual accounts up to $250,000. You can check if your brokerage is covered by using the FDIC’s Bank Find.

 

  • They are members of the SIPC: The Securities Investor Protection Corporation is another non-profit insurance agency that protects funds in brokerage accounts. The SICP will provide up to $500,000 in coverage for brokerage assets. The SIPC has a list of covered brokers on their website.
  • They are members of the FINRA: The Financial Industry Regulation Authority is an independent body that makes sure brokers follow federal regulations on handling money.

It’s also worth checking out extra protection plans in place for your funds. Many brokerages have customer protection plans that will reimburse you in the case of brokerage failure if your lost amount exceeds values set by federal insurance agencies.

Promotions

A lot of online brokers also offer promotions to entice people to create accounts. For example, a broker might offer several commission-free trades or a cash bonus on your account. These promotions are usually small, but when stuck between two brokers with identical credentials, promotions might sway your judgment one way or the other.

10 Best Free Online Stockbrokers for Beginners

Here is a list of our top 10 picks. We will cover each entry in-depth below. All of our picks have no minimum investment fees and do not charge a commission on regular stock trades:

1. TD Ameritrade

TD Ameritrade With Discount BrokerOur top pick for this list is TD Ameritrade dues to its user-friendly website and absolutely massive library of resources for beginner investors. One downside of these kinds of online brokers is that they charge extra for help.

TD Ameritrade has all of those resources for free and they incorporate them into a class-like structure so you really feel like you are learning. They even have a system that lets you practice trading with fake money.

TD Ameritrade also has a very user-friendly mobile app that is rated highly on both the Google Playstore and Apple app store. The app includes literally every feature on the web-platform, including streaming data, and complex options contracts. Moreover, TD Ameritrade offers the widest selection of mutual and exchange-traded funds of online brokers.

TD Ameritrade does not charge any commission fees on regular stocks and ETFs, but the commission rates for options range from free to $0.65 per contract. So we guess it’s technically not “100% free,” though it’s close enough.

TD platform also has several tools for the budding investor. The platform has tools for fundamentals and technical analysis, including streaming quotes, custom alerts, and screeners so you can filter out irrelevant information.

Again, the absolute best feature of TC Ameritrade is its resources for education. Independent investors have access to thousands of webinars and articles on topics ranging from basic fundamentals to complex transactions. They also have very reliable customer support and several physical locations where you can visit with a representative face-to-face.

2. Ally Invest

Ally Invest Page ScreenshotAlly Invest is another free investment platform that has no minimum investment amounts and no commission fees. Ally Invest is one of the more recent online brokers to fully drop commission fees on standard trades. Although stock and ETF trades are free, there is still a small commission on mutual funds and options-contracts.

One of the more unique features of Ally Invest is their forex dedication app Ally Forex. With Ally Forex, you can invest in foreign currencies, though this is mostly recommended for more experienced investors.

Otherwise, Ally’s online and mobile platforms are super simple to use and give investors a whole suite of free technical applications and analysis tools, much more than you would expect from a major discount broker.

One of the cooler technical applications we saw was its automated options pricing calculator that lets you compare asking prices for options and make forecasts over future values. Other technical tools included with an account are a probability calculator, a profit-and-loss calculator, and  tax manager that can generate 1099 forms

The one drawback of Ally is its mutual fund’s selection. Ally offers over 8,000 different mutual funds to invest in, but unfortunately, none of them are commission-free. Ally’s mutual fund commission is one of the lowest in the industry at only $9.95, but other brokers have the same mutual fund selection with no commission fees.

Overall, Ally Invest is a good choice for beginner investors who want to work on managing their duns on their own. We especially like the forex dedicated platform and automated tools for tax purposes.

3. Robinhood

Screenshot of Robinhood Home PageUntil very recently, Robinhood was one of the few online brokers that did not charge commission fees on regular trades. Many people credit firms like Robinhood with putting pressure on larger mainstays like Merrill Lynch or Charles Schwab to end commission fees on regular trades. This does mean that Robinhood is no longer unique in the market, but it’s still a solid investment platform to get started on.

The single best feature of Robinhood is its barebones simplicity. The web platform and mobile app are essentially the same and are just as easy to use as the other.

The company brands itself as being specifically designed for mobile users. Robinhood does not have a minimum investment amount for regular accounts though it does have a $2,000 minimum amount for margin accounts.

Robinhood also has a $75 brokerage transfer fee, but this is pretty common, even among free online brokers. Robinhood also has its own clearing system so you avoid any fees for bank transfers and the like. They even give the option for fractional shares so you can have a fully diversified portfolio, even if you do not have a lot of money to invest.

The single feature that distinguishes Robinhood from the others on this list is that it’s one of the very few brokers that let you trade cryptocurrencies like Bitcoin, Litecoin, and Ethereum.

Robinhood’s greatest flaw is also its greatest asset; the intentionally simplified design. It’s perfect for investors who know what they want, but it does not have the fancy bells and whistles of a larger brokerage platform.

4.  Charles Schwab

Screenshot of Charles Schwab Stock Trading PageCharles Schwab is probably the most versatile trading platform on our list. The real benefit of Charles Schwab is that is can be comfortably used by pretty much an investor; beginner, advanced, and expert investors. Charles Schwab is one of the more recent firms to drop its commission on regular trades and has access to over 3,500 commission-free mutual funds.

Another great feature of Charles Schwab is its education and research tools. The company acts as a hub for major stock news and gives investors access to in-depth earnings reports and market news. Account-holders also get access to a quarterly magazine, free of charge.

As far as usability, Charles Schwab is one of the best. A relatively new feature pushed in the latest software update adds voice functionality with Google Assistant and Alexa.

So you can now search for stocks and get quote prices via voice commands. You can set up a watch list and get push notifications whenever there is significant activity on specific stocks.

Schwab also offers a scaled-down trading platform called StreetSmart Edge that has simple navigation and customization tools so you can filter only information you find relevant.

To be completely honest, Charles Schwab has virtually no downsides as a trading platform. The only fees are on select options-contracts and the provided research materials are absolutely top-notch. We highly recommend this platform for beginner investors.

5. Fidelity

Screenshot of Fidelity Stock Trading PageOur last entry is Fidelity Investments, a firm with a strong reputation for mutual funds. Despite the reputation, Fidelity has a solid brokerage firm that has 0 commission fees, a large library of research and education materials, and a customizable platform that can be changed depending on the investor’s experience level.

Fidelity does have amazing funds options too. The platform has access to more than 3,500 transaction fee mutual funds and several commission-free ETF funds as well. Fidelity also have its special Fidelity Zero index funds which have no expense ratio and no minimum investment amounts.

Fidelity also has research from over 20 third party providers from giants in the field of capital management. There is even a quiz you can take that will match you with specific advice columns depending on your investment style.

6. E-Trade

Screenshot of ETrade Stocks trading PageE-Trade is a popular investment platform that is known for its easy-to-use tools, big investment selection, extensive investing resources, great mobile app, and excellent customer support. E-Trade is a great option for both beginner and more experienced investors as it has no account minimums and no commission on trading stock.

E-Trade has three distinct online platforms, E-Trade Web, Power E-Trade, and E-Trade Pro. Each one is suited to an investor of a certain experience level.

E-Trade Web is the basic online platform and have free marketing data, real-time quotes, analyst research and more. E-Trade Pro is the desktop platform that has many of the same options as E-Trade Web, just to a greater degree of precision and sophistication.

The real kicker is Power E-Trade, the platform for heavy-duty investing. The Power E-Trade web platform has access to more than 100 studies, over 30 different drawing tools, and a huge library of technical indicator tools.

It also has access to a huge library of educational tools for the budding investor. Available resources include investment research reports, beginner guides, and more specialized guides like how to build an emergency fund.

E-Trade also has one of the industry’s best mobile apps. You can do everything on the mobile app that you can do on the web platform and it has an extension for financial news. There is even a version of the app available for the Apple Watch.

Along with free stock trading options, E-Trade gives investors access to more than 4,400 commission-free mutual funds. Other mutual funds have a $19.99 transaction fee.

E-Trade also has some of the best customer support in the business, with over 30 physical branches staffed by financial experts and a 24/7 customer support phone line. Lastly, E-Trade has a dedicated robo-advising platform called E-Trad Core Portfolios that will automatically manage your funds for an annual fee of 0.30%.

7. Merrill Edge

Screenshot of Merrill Edge Stocks Trading PageAnother online broker from a big investment firm, Merrill Edge is an online brokerage service from financial giants Merrill Lynch. Merrill Edge stands above the competition do to its incredible library of market research, extensive advisor network, and analysis tools. The basic web platform has streaming market data and charts.

The automated software helps time ordering routines so there is less of a difference between your asking price and closing price. If you have more than a $1 million balance across combined Bank of America and Merrill Lynch accounts, you get access to NASDAQ level II quotes, though the company plans to expand these benefits to every customer soon. Since Bank of America acquired Merrill Lynch, you can access both your Merrill Edge and Bank of America account from the same login.

Like most online brokers nowadays, Merrill Lynch has no commission on regular stock trades and they have a wide selection of commission-free mutual funds and ETFs. Their options pricing is one of the best as they do not charge any commission and only charge a $0.65 per-contract fee.

The best feature of Merrill Edge is its cutting edge proprietary research. They boast research from several notable third-party institutions like Morningstar, CFRA, Trefis, and Recognia.

Mutual fund reviews and rankings give customer premium tips on smart investments and which stocks are currently trending. The platform has a wide library of educational resources you can search based on your investing experience.

The only problem we could find with Merrill Edge is that their specialized MarketPro platform is only available for customers who have a combined balance of more than $50,000 between Merrill Lynch and Bank of America accounts.

8. Interactive Brokers

Screenshot of InteractiveBrokers Products PageInteractive Brokers has been a popular investment platform for experienced investors but the recently dropped their second service called IBKR Lite which is meant for beginners and casual investors. IBKR Lite gives you unlimited free stock trades and no-commission mutual fund trades for funds listed on U.S. exchanges.

However, the really amazing part of IBKR Lite is that it gives you direct access to more than 125 markets in over 31 countries. Unfortunately, you will have to pay a small commission on international trades but it is very small at $0.005 per transaction, only a half of a cent. IBKR Lite is one of the few online investment platforms that give access to foreign stocks with extremely low margin rates.

Both the IBKR Pro and IBKR Lite platforms have 0$ account minimums and give the option to trade fractional shares, a great choice for beginner investors who may not have a lot of funds to invest. Both platforms are easy to use and give you access to a bevy of technical tools.

Both platforms also give access to a massive selection of research materials, including fundamental data on more than 30,000 companies, more than 5,000 analyst ratings, and reports from over 80 companies.

The one spot where IBKR falls short is inactivity fees. Fortunately, this fee is limited only to IBKR Pro accounts and does not apply to IBKR Lite accounts. Clients under the age of 25 do not have to pay activity fees on either platform.

9. TradeStation

Screenshot of TradeStation Stocks Trading PageTradeStation has been a mainstay for expert investors for a while but they have recently made some changes that have opened their platform to more casual investors. Chief among these changes was the elimination of commission fees on regular stock trades and free access to a big library of market research and educational materials.

TradeStation now has no account minimums but they do offer account upgrades that are dependent on keeping a minimum account balance. For instance, those who have a $2,000 initial investment get upgraded to the TS Select plan which gives access to more specialized tools. TS Select members also get access to reduced costs for options and futures contracts.

The best features of TS is its impressive online platform that gives direct-to-market access, automatic trades, and tools that help set an automated trading strategy. The platform also gives access to TradeStation Simulator, a simulated environment where you can practice trading strategies. The platform also has more than 270 technical indicators.

Another great feature is TS’s big research library. TS users have access to over 90 years of daily stock market data and decades of intraday data. You can set your profile to push custom notifications in the event of upcoming announcements or press releases so you can stay up to date on knowledge.

Lastly, TradeStation has a cryptocurrency platform called TradeStation Crypto that lets you trade Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple. Even better, there are no fees on cryptocurrency trades.

10. Acorns

Screenshot of Acorns Invest PageAcorns is a relatively new and small online broker but they have one neat feature that distinguishes them. Acorn specializes in micro-investing and is a good choice for those who have some spare change they want to throw around in the stock market.

Acorn works by rounding up your credit and debit purchase and taking the extra change and investing it. While this is the main investment mechanic, you can invest a lump sum of cash if you want. Acorn does not charge any commission fees or have a minimum account limit, but they do have a $1 monthly fee for regular accounts.

Acorn also offer free account management for college students with a valid .edu address. College students are an interesting target demographic for an investment app but Acorn’s 4 million+ user base seems to imply its a good strategy for attracting investors. You can set up your Acorn account to act as a regular checking account you can directly make purchases from.

Another cool feature is Acorn’s cashback programs. Acorn has partnered with several companies such as Airbnb to give you cash back when you purchase using a linked payment method. This means that whenever you make a purchase with one of these partners, they give you more money to invest.

Unfortunately, Acorn’s library of research and analytic tools are limited compared to larger investment brokers, but what they have is good. Acorns publishes Grow Magazine, a finance website geared towards millennials that cover topics like credit card debt, student loan payments, and side gigs, among other topics.

The one major flaw with Acorns is the flat rate account fees. $1 or $2 a month in fees might not sound like a lot, but when you are investing such small amounts, $1 or $2 can be a high percentage of total assets. If your contributions are very small, it can take a while to break out of that zone.

In Conclusion

If you have ever wanted to get into stock trading, there has never been a better time to start. The power of the internet has put stock trading within grasp of the common person and now anyone can trade stock whenever and wherever they want.

About Author

Tim Fries Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim is also the co-founder of Protective Technologies Capital (protechcap.com).