8 Best Online Brokers for Stock Trading of May 2023

Investing in stocks has always been a smart move for long-term wealth building, and with the convenience of online trading, it’s now more accessible than ever. 

But with countless online brokers to choose from, finding the best one for stock trading can feel overwhelming. Fear not, as we’ve done the legwork for you. 

In this article, we’ll present our top picks after carefully analyzing the major players in the field. 

What is an Online Stock Broker?

An online stock broker is like a digital middleman who helps you buy and sell stocks. They connect you to the exciting world of stock exchanges right from your home, saving you the hassle of going there yourself or working with traditional stockbrokers.

Picture this: you want to buy shares from a specific company. But instead of reaching out to the company or using your bank account, you can use an online stock broker. These brokers are like your representatives in the market. They know the ins and outs of the stock exchange and have connections with market makers – the folks who pair up buyers with sellers.

So when you tell your online broker you want to buy a particular stock, they pass along your request to the right place. Your broker’s connections will then start the search for someone who’s ready to sell the shares you want. Once they find a match, they seal the deal, and voila – the stocks are yours, and they show up in your online account.

But keep in mind, this isn’t a free service. Your online broker charges a small fee, called a commission, for every trade. This charge isn’t the same everywhere, so it’s a good idea to compare different brokers to find the one that fits your needs and wallet.

What to Consider When Choosing a Broker

Choosing an online stock broker can feel like a big task with so many options out there. Here are some simple tips to help you make the best choice:

1. Costs: Good news! Many online brokers no longer charge fees for trading stocks and ETFs. But remember, there might still be costs like account maintenance fees or charges for extra services. So, compare different brokers to find the best deal for your trading habits and investment plan.
2. Resources: The right tools can make your trading journey much easier. Look for brokers that offer things like real-time data, market analysis, educational materials, and expert advice. A user-friendly trading app with all the features you need can also make a big difference.
3. Trade Execution: Speed matters in the world of stock trading. So, check how fast a broker can place trades, what types of orders they accept, and how reliable their platform is. A well-designed and efficient trading interface can help you execute your trades smoothly and on time.
4. Tailored Services: Different brokers are designed for different types of investors. Some are great for beginners with lots of support and easy-to-use tools. Others might have advanced features for experienced traders. Think about your own experience, trading style, and long-term goals to find the best fit.
5. Customer Support: Sometimes things go wrong, or you might just have a question. That’s when good customer service becomes essential. Look for brokers that offer quick and easy ways to get help, like phone support, live chat, or email.

Best Online Brokers for Stock Trading in 2023

Here’s our selection of the best online stock brokers that cater to various needs and preferences:

• Charles Schwab
• Fidelity Investments
• E-Trade
• TD Ameritrade
• Robinhood
• Interactive Brokers
• Merrill Edge
• Ally Invest

1. Charles Schwab

Charles Schwab, a renowned name in the investment industry, has a longstanding commitment to assisting individual investors. 

With a track record of accolades, including being ranked as the “Highest in Investor Satisfaction with Full-Service Brokerage Firms” by J.D. Power for three consecutive years, Schwab remains a trusted choice for many. While it slipped to second place in the 2021 and 2022 rankings, Schwab continues to offer a range of features that make it stand out among online stock brokers.

Why choose it?

Here are some of the standout features:

• Great Trading Tools and Excellent Customer Support: One of the key reasons to consider Charles Schwab is its suite of exceptional trading tools. Whether you are a novice investor or a seasoned pro, Schwab’s trading platform provides the necessary features to make informed investment decisions. Moreover, the company’s commitment to customer satisfaction is evident through its excellent customer support. 
• Wide Range of Research and Educational Materials: Schwab offers a wealth of research and educational materials to its clients, and what’s even better is that these resources come with no commission. From market analysis and investment insights to educational content, Schwab empowers its customers with the knowledge needed to make informed investment choices. 
• Innovative Customer Service Policy: In addition to its impressive array of tools and resources, Schwab has implemented an innovative customer service policy. The company recognizes that clients’ satisfaction is of utmost importance and offers a refund on related commissions, transaction fees, or advisory programs if a client feels dissatisfied. 

Who is it for?

Charles Schwab caters to a wide range of investors, from those taking their first steps in the investment world to experienced professionals. 

The platform’s user-friendly interface and availability of professional support make it an excellent choice for beginners. Meanwhile, seasoned investors can leverage Schwab’s advanced tools and resources to enhance their investment strategies. 

How much does it cost?

Schwab follows the industry standard of zero commissions on stock and ETF trades, which it played a significant role in establishing. However, options trades incur a fee of $0.65 per contract. Despite this charge, Schwab’s pricing remains competitive and transparent, aligning with its commitment to providing value to its customers.

2. Fidelity Investments

Fidelity Investments has established itself as a top-tier online stock broker, excelling in various aspects such as trading platform functionality, low commissions, and customer support. Whether you are a beginner seeking simplicity or an advanced investor looking for sophisticated tools, Fidelity caters to diverse needs, making it a dependable choice for many.

Why choose it?

Here are some of the standout features:

• Strong Reputation for Retirement Planning: Fidelity has earned a strong reputation for its focus on retirement planning. The platform provides investors with an abundance of research and tools specifically designed to aid in retirement planning. From sophisticated screening tools to comprehensive information, Fidelity offers a robust set of resources that empower investors to make well-informed decisions when preparing for their future.
• Recognition and Customer Satisfaction: Fidelity’s commitment to excellence is further reinforced by its recognition in Investor’s Business Daily’s 2022 investor survey. Customers who actively use Fidelity’s services ranked the company as their top choice, attesting to its quality and reliability. 
• Zero Fees on Additional Services: Apart from its core offerings, Fidelity goes the extra mile by providing various services with zero fees. These services, which are typically charged for by other brokers, include valuable features that enhance the overall trading experience. 

Who is it for?

Fidelity’s wide range of easily digestible educational tools makes it an ideal choice for investors who are just starting out. The platform’s intuitive interface and comprehensive educational materials empower beginners to gain confidence and knowledge in their investment journey.

However, Fidelity is not limited to beginners; it also caters to the needs of advanced investors seeking robust tools and resources to support their investment strategies.

How much does it cost?

Fidelity, like many other industry players, has eliminated commissions on stock and ETF trades. This move is particularly advantageous for long-term buy-and-hold investors but benefits all traders seeking cost-effective solutions.

3. E-Trade

E-Trade stands as a reliable choice for investors across the board, accommodating both passive and active traders, beginners and experts. The platform’s educational section is a standout feature, providing a vast library of educational tools, webinars, news clips, and videos tailored to investors of all levels.

Why choose it?

Here are some of the standout features:

• In-Depth Education and Analysis: E-Trade’s educational resources go beyond the basics, allowing investors to delve into a wide range of educational materials. 
• Up-to-date Analysis: E-Trade analysts provide up-to-date analysis and commentary to help traders shape their trading strategies effectively.
• Robust Support and Trading Tools: E-Trade places great emphasis on customer support, offering 24/7 phone support and an online chat option. This ensures that investors have access to assistance whenever needed, further enhancing the overall trading experience. Active traders, in particular, will appreciate E-Trade’s flagship trading platform, Power E-Trade, which offers a wealth of tools and features. The platform is available in a mobile version as well, enabling traders to stay connected and trade on the go.

Who is it for?

E-Trade’s discounts on volume options trading make it an attractive choice for traders who engage in frequent trading activities. 

The broker’s pricing structure provides significant benefits for active traders, allowing them to optimize their trading strategies and reduce costs.

How much does it cost?

Similar to other major brokers, E-Trade charges zero commissions on stock and ETF trades. Options trades incur a fee of $0.65 per contract. Traders who make 30 or more trades each quarter can benefit from a discounted commission of $0.50 per contract. 

4. TD Ameritrade

TD Ameritrade presents a compelling choice for investors at all skill levels. Whether you require guidance and education as you embark on your investment journey or seek the advanced features of the thinkorswim trading platform, TD Ameritrade has you covered.

It’s worth noting that TD Ameritrade has been acquired by Charles Schwab, and the two brokers will eventually integrate their services.

Why choose it?

Here are some of the standout features:

• Extensive Educational Content: TD Ameritrade offers access to a comprehensive library of educational content, including videos, webcasts, and thousands of articles. This wealth of resources enables investors to expand their knowledge and stay informed about market trends. 
• Various Trading Options: In addition to stocks, TD Ameritrade allows trading of various securities, including bonds, options, and futures. The broker’s mobile app facilitates seamless trading across these different asset classes.
• Beginner-friendly: With no account minimums, TD Ameritrade appeals to beginners who are just starting their investment journeys. The platform provides a supportive environment for learning and growth, empowering new investors to navigate the market with confidence. The user-friendly interface and comprehensive educational resources make TD Ameritrade an ideal choice for those seeking a solid foundation in investing.

Who is it for?

Investors who prefer a more intricate trading experience will appreciate TD Ameritrade’s highly capable trading platforms and resources. The thinkorswim trading platform, in particular, provides advanced features and tools that enable investors to analyze markets, develop complex strategies, and execute trades efficiently.

How much does it cost?

TD Ameritrade charges zero commissions on stock and ETF trades, aligning with the industry trend. Options trades incur a fee of $0.65 per contract. 

5. Robinhood

Robinhood, a relatively new player in the online brokerage industry, has quickly gained a dedicated following due to its commission-free trading and user-friendly mobile app. This platform appeals to investors who value simplicity and quick trading capabilities. 

Why choose it?

Here are some of the standout features:

• Commission-Free Trading One of the standout features of Robinhood is its commitment to no-fee trading on stocks, ETFs, options, and cryptocurrencies. This approach allows investors to trade without incurring additional costs, making it an attractive option for those seeking cost-effective solutions. 
• Access with Robinhood Debit Card: Robinhood offers a debit card that enables investors to invest while they spend and provides access to thousands of fee-free ATMs, adding convenience to the overall experience. 
• User-Friendly and Beginner-Friendly Platform: Robinhood’s user-friendly mobile app has been a key factor in its popularity. The app’s intuitive interface and streamlined design make it easy for investors, particularly those starting out, to navigate the platform and execute trades efficiently. However, it’s worth noting that Robinhood only offers individual taxable accounts and traditional and Roth IRAs, limiting the account types available.

Who is it for?

Robinhood caters to investors who are new to the market and prioritize quick and hassle-free trading. The platform’s focus on simplicity and commission-free trading makes it an appealing choice for beginners who want to get started with investing quickly.

How much does it cost?

Robinhood disrupted the industry by offering zero commissions on stock and ETF trading. The company continues to strive towards expanding its product offerings to include various financial products and services, including options and cryptocurrencies.

The platform’s premium tier, Robinhood Gold, available for $5 per month, grants access to research and discounted margin trading.

6. Interactive Brokers

Interactive Brokers has long been recognized as a brokerage for professionals and active investors, providing a powerful trading platform and efficient trade execution. In recent years, the company has made efforts to appeal to newer investors by introducing a “lite” version of its service, offering no-fee trading.

Why choose it?

Here are some of the standout features:

• No-Fee Trading and Enhanced Customer Support: Interactive Brokers now offers a “lite” version of its service, providing no-fee trading to attract new investors. The platform has also improved its customer support and basic research offerings. This shift has softened the platform’s previous reputation for being solely focused on low costs and trade execution, making it more accessible to a wider range of investors.
• User-Friendly Design and Functionality: Interactive Brokers has revamped its customer support page with a new design that enhances navigation while maintaining a high level of functionality. This improvement ensures a smoother user experience for investors seeking assistance or exploring the platform’s features.

Who is it for?

Interactive Brokers is best suited for investors who already possess some knowledge and experience in trading and want to further enhance their investment strategies. The platform’s professional-grade features and resources cater to investors who seek a more advanced and comprehensive trading experience.

How much does it cost?

Interactive Brokers was one of the pioneers in the industry’s shift towards no-fee stock trading. The company’s Lite service charges no commissions on stocks and ETFs, offering cost savings for investors. For its Pro service, Interactive Brokers charges $1 per trade for up to 200 shares, with subsequent shares costing a half-penny each. Options trades incur a fee of $0.65 per contract, with volume-based pricing available for active traders.

7. Merrill Edge

Merrill Edge stands out as a full-service broker that caters to both traders and investors, providing high-quality tools and resources. With over 2,000 locations within parent company Bank of America’s branches, Merrill Edge offers easy access to human advisors, making it a valuable feature for newer investors seeking guidance.

Why choose it?

Here are some of the standout features:

• Extensive Research and Educational Materials: Merrill Edge provides a range of research options for its clients. Preferred clients gain access to detailed research reports on individual stocks, while all clients can benefit from research from respected providers like Morningstar and Lipper. The platform also offers comprehensive educational materials to help investors plan their financial future effectively.
• Convenient Customer Support: Merrill Edge offers 24-hour customer support throughout the week, ensuring that assistance is readily available whenever needed. This dedication to customer service enhances the overall trading experience, providing investors with peace of mind knowing that help is just a phone call away.

Who is it for?

Merrill Edge’s wide range of resources and on-hand customer service support make it an appealing choice for investors of all levels. Whether you’re a beginner seeking guidance or an experienced investor looking for comprehensive tools, Merrill Edge offers the necessary features to support your investment goals.

How much does it cost?

Merrill Edge charges no fees for stock and ETF trades, aligning with industry standards. Options trades incur a fee of $0.65 per contract, which is consistent with the prevailing rates in the industry.

8. Ally Invest

Ally Invest offers a range of features that investors will appreciate, including commission-free stock and ETF trades, 24/7 customer service, and a user-friendly trading platform. The platform caters to both active traders and investors seeking convenience.

Why choose it?

Here are some of the standout features:

• No-Fee Trading and Advanced Tools: One of Ally Invest’s standout features is its commission-free stock and ETF trades, providing investors with cost-effective trading options. The platform’s $0.50 per contract fee for options trades is among the best in the industry. Active traders will appreciate Ally Invest’s trading platform, which includes over 100 chart studies and drawing tools to aid in identifying trading opportunities.
• 24/7 Customer Service and Mobile App: Ally Invest prioritizes customer support, offering 24/7 service via phone to ensure prompt assistance for any issues or inquiries. Additionally, Ally Invest’s mobile app allows investors to stay connected and trade on the go, providing convenience and flexibility.

Who is it for?

Many investors will find value in Ally Invest’s offerings, but existing customers of Ally’s online bank will particularly appreciate having their finances in one place. The seamless integration between Ally’s banking and investment platforms simplifies financial management for customers.

How much does it cost?

Ally Invest charges no fees for stock and ETF trades, providing investors with cost-effective trading options. Options trades incur a fee of $0.50 per contract, which is lower than the industry average, offering an additional advantage to options traders.

Can You Buy Stocks Online Without a Broker?

Some companies do offer a way to buy stocks directly from them, sidestepping the need for a broker entirely. These are known as direct purchase programs.

Now, while this might sound super appealing and independent, there’s a little catch. These programs can be a bit tricky to navigate. It’s a bit like building a piece of IKEA furniture without the manual. Possible? Yes. But could you end up a bit frustrated and wishing you had just taken the easier route? Also yes.

In the end, buying stocks directly from a company might give you a sense of satisfaction. But for most of us, going through an online broker makes the whole process a whole lot simpler and less time-consuming.

Final Verdict

In sum, all online brokerage firms undoubtedly generate revenue from their clients’ trading activities. However, preeminent platforms distinguish themselves by providing unparalleled customer support, exhaustive research and analytical tools, comprehensive educational materials, an expansive array of assets, an assortment of account types, transparent pricing structures, and restrained use of gamification techniques.

Following a rigorous assessment of leading online brokerages, Fidelity incontrovertibly takes the lead, particularly in its offering of exchange-traded funds (ETFs) and its competitive cost structure. Catering to the needs of both novices and seasoned investors, TD Ameritrade boasts a trading platform replete with advanced features, yet maintaining user-friendly functionality. Additionally, it provides a superior mobile experience that is second to none.

Finally, for investors seeking to elevate their trading capabilities and access the most sophisticated platform on the market, as well as the broadest selection of international markets, Interactive Brokers delivers an unrivaled experience.