Whether you are just dipping your toes into the water or are an experienced investment scuba diver, one of these brokerages is right for you
Looking for the best online brokerage accounts? Then you have probably come across so many options that you may be feeling overwhelmed. Brokerage accounts come in all shapes and sizes, so how do you go about deciding which one is the best for you?
The answer to this question resides in knowing the kind of investor you are and your level of experience. Are you a frequent trader who can read price action in small time frames? Are you a casual investor who follows news about companies?
You may also be a passive investor, or even completely new to the subject and not even know where to start. The type of brokerage account that fits the needs of each of these investors is not the same in all cases.
Some platforms offer robust research and analytics tools that can be daunting for beginners. Others offer simplified recommendations and educational material that can be boring to veterans.
This article, however, was written with the beginner investor in mind. We have put together a list with the best online brokerage accounts for you to choose from. The list is in no particular order, so check out all of the accounts, and pick the one that suits you best.
The Post New’s pick for best online brokerage accounts
Fidelity Investments is one of the most respected brokerages available. It offers $0 trading commissions in stocks, ETFs or options. Not to mention their list of 3,700 mutual funds for you to choose from and trade, plus index funds, also with zero commissions.
But that is not the only thing that places Fidelity Investments among our picks of the best online brokerage accounts. They also have awesome research tools, educational resources, trading platform and strong customer service.
Beginner investors and frequent traders alike will greatly benefit from this brokerage.
Interactive Brokers IBKR Lite
IBKR Lite is one of the best online brokerage accounts for both active and casual traders. They offer low per-share pricing, a wide range of tradable securities and an outstanding trading platform.
Their margin requirements are very low compared to the market average, and you can trade ETFs and stocks commission-free. They also offer foreign stocks, futures, options, fixed income and mutual funds.
They do not have any account minimum requirements, and charge no maintenance or inactivity fees.
With no account minimums or fees to get started, Ally Invest is one of the best online brokerage accounts for a number of reasons. For starters, they offer a number of tools that cater to almost any investment style.
This brokerage has a wide variety of investment products, including stocks, ETFs, options. mutual funds and fixed income. On top of that, commissions and fees are low compared to the market average.
This is one of the best online brokerage accounts not only because Vanguard has long been known in this market, but because of their low cost and large selection of funds.
Active traders will not benefit from this platform as much as long-term investors. They can combine a buy-and-hold strategy with low-cost offerings in over 3,300 mutual funds and ETFs.
This account requires no minimums, charges no transaction fees on mutual funds and ETFs. You also will not have to pay trading commissions on stocks or options.
What makes Merrill Edge one of the best brokerage accounts is its convenience, especially for Bank of America customers. Since Bank of America’s acquisition of Merrill Lynch, the parent company has created an integrated experience for both companies’ customers.
One login gives you access to both your Bank of America account and your investment account. You can make real-time transfers and start trading almost instantaneously.
The platform also comes with a vast array of educational resources, from podcasts and webinars to virtual events, videos and much more.
What kind of investor are you?
Now that you have a few options at hand, you must know yourself before actually choosing. Some people like to spend long hours reading complex and boring reports and data on businesses, the economy, politics, etc.
Others would much rather not think about these things and just enjoy life instead. There are yet others who like reading and researching about these things, but not to the point of spending long hours on them.
If you are going to trade frequently, you better be prepared to do a lot of reading. Not just news reports and balance sheets, but also price charts, economic data, and so on. In your case, the more robust the tools the platform offers, the better.
Great tools usually come at a cost, so your investment strategy better be a good one. Frequent trading also comes at a cost. Keep that in mind when you compare brokerages’ pricing.
If, on the other hand, you do not want to have such a hands-on approach to your investments, you do not need to worry about analyzing stocks so much. But it does help to know what you are getting into once you invest in stocks.
Important things to consider
Regardless of your level of experience, when considering brokerage accounts, you must always keep an eye on fees.
They are an important part of investing, and even though they may not seem like a lot in the short term, they can have a huge impact on your long-term results.
Learn about commissions, maintenance fees, mutual funds fees, sales fees as well as taxes. Knowing about this will save you quite a bit of money in the long run.