Investors nowadays have many options to choose from when it comes to brokerage firms. From small brokers to large, from new entrants to old dogs, traders can choose an investment company that fits their particular needs. In a very competitive market, brokerage firms must maximize profit in some areas while cutting fees in other areas to attract customers.


* - Ally Invest offers special pricing of $3.95 per equity trade and 50 cents per options contract for users who make 30 or more trades in the prior calendar quarter and/or maintain an average daily balance of more than $100,000 in the prior calendar quarter.
** - Per contract charge applies to trades on the online platform. $0.55 a contract for options transacted on Direct Pro. There is a list of index options, including SPX, OEX and VIX, for which Choice Trade charges a surcharge of $1.00 per contract in addition to the regular commission. This surcharge does not apply for options on ETFs such as QQQ or SPY. If you participate in a third-party investment program, then your minimum commission per option trade will be $10, exclusive of index option surcharges (if applicable). Regulatory fees, exchange fees and index option surcharges are extra. $10.00 per trade with no contract fee plan is not available to accounts with naked option writing permission. The default pricing plan will be $5.00 per trade plus 0.15 cents per contract. You may switch between pricing plans no more than once a month by sending an email before the 1st of any given month. Note: Regulatory and OCC fees will apply. Please contact ChoiceTrade for details.

Online Discount Brokers List - Best And Worst Brokerage Firms

Coming in at 4½ out of 5 stars are TD Ameritrade and Ally Invest. TD Ameritradeis a well-known and heavily-advertised brokerage. The company is among the five biggest brokerages in the U.S.

TD Ameritrade has no minimum opening deposit, which is a great way to explore the broker's trading platform before committing any money. TD Ameritrade offers the best in the industry intuitive Thinkorswim trading platform at no charge to all customers. New investors can start with the website-based trading platform and switch to either of its two free advanced trading platforms as soon as their trading skills progress. The majority of other brokers charge steep fees for their advanced trading tools.

In exchange for a little bit higher than the industry average commissions, TD Ameritrade offers a wide spectrum of services that are either not offered by other firms or offered for a fee.

Free advanced trading tools, great customer support, personalized services at branches, a broad set of instruments, including great selections of mutual funds and one of the best selections of commission-free ETFs, and the safety and security of a large company make TD Ameritrade stand out among other investment companies on the list. TD Ameritrade was Barron's top online broker 2018 for long-term investors and novices. Also, the brokerage ranked among the best online brokers for in-person service and for options traders (thinkorswim platform). Learn more about TD Ameritrade »

Ally Invest is another high-rated brokerage firm that does not require a minimum investment to open an account and provides an opportunity to explore their tools at no charge. Thi company offers the lowest commissions on stocks and options. Mutual fund commissions are also among the lowest among the largest discount brokers. Ally Invest gets top marks for a history of excellent customer service, and for its trading platform Ally Invest LIVE that is fully customizable and user friendly. Learn more about Ally Invest»

Taking the third position is Firstrade, earning 4.5 stars. This broker offers trades for $2.95 and has no opening deposit requirement. Firstrade has 700+ commission-free ETFs and free DRIPs. However, it lacks some important features such as 24/7 customer service and an advanced trading platform. More about Firstrade »

Further down the list, there are three big-name companies which are offering services of both a traditional full-service brokerage house and a discount broker. Rated four stars, these companies are Fidelity Investments, Charles Schwab and Etrade. Customers receive more personalized services and some features that are not available at other largest broker dealers. Buy-and-hold investors and those who prefer a more personalized approach will be satisfied. All three companies offer advanced trading platforms for active investors. However, unlike TD Ameritrade's thinkorswim, platforms come at a high price.

Motif Investing was ranked the №.1 Most Innovative Company in Personal Finance by Fast Company. The company allows investors to buy a basket of up to 30 stocks or ETFs in a particular sector for a low flat fee. Motif Investing lacks a minimum funding level to open an account. The company offers intentionally straightforward and clear fees.

USAA Investments is next on the list. The brokerage offers good investment services, loyalty, integrity and honesty to the military members and the general public. The firm's fees are clear and straightforward. Nevertheless, a full range of USAA self-directed investments and wealth management services are available to the general public as well.

TradeStation and Interactive Brokers are highly rated brokers for experienced and active traders. These companies offer the lowest per-share commissions, advanced trading platforms and access to international markets. With their main focus on high-volume frequent traders, both brokers require high minimum deposits to open an account. TradeStation's direct-access trading platform is highly customizable and one of the best in the industry. Interactive Brokers was the cheapest online broker for occasional and frequent traders by Barron's estimate. The standard trading commission is $0.005 per share with a $1 minimum and a maximum of 0.5% of trade value.

Lightspeed Trading is a good fit for sophisticated traders. Fast execution speed is the major advantage of the web-based trading platform Lightspeed Trader. However, the platform has little to offer in terms of research.

Merrill Edge offers flat-rate commissions, no minimum funding or balance requirements and no maintenance or inactivity fees for its brokerage or IRA accounts. The broker offers mediocre services in comparison with the leading discount brokerages. However, current Bank of America customers might find Merrill Edge services very convenient.

Capital One Investing earns 3½ stars with $6.95 trades and no minimum opening deposit. Combined with research tools, IRA accounts and a link to Capital One deposit accounts, this brokerage might be attractive for existing Capital One customers. Everyone can find better options.

ChoiceTrade receives 3 stars for its $5 commission charge and no opening balance requirement. Unfortunately, mutual funds are $25 to trade. Mutual fund investors would do better at Ally Invest or Fidelity. Direct Pro, the broker's advanced trading platform, is a staggering $49.95 per month. Complaints from its customers regarding the website and customer service knock off 2 stars. A steep quarterly inactivity fee is another drawback.

Marsco offers very low trading commissions. Its minimum starting balance is $2,500. The firm's trading tools lack sophistication. Nowadays, there are better solid brokers on the market.

Another 3-star rating goes to Sogotrade. This broker charges a low $5 for trades and has no opening deposit requirement, which is a good deal for small investors. However, this low-cost brokerage has a history of customer service complaints. Its maximum rating at this time is only 3 stars.

SpeedTrader is focusing on active traders. Advanced trading platforms are offered for high fees. No research is offered.

Trading Block is one of the companies that participated in the Barron's survey. Unfortunately, its rankings are very low in most categories. The company finished next to last.

The well-known Vanguard comes in at just 3 stars. The standard trading fee is $2 to $20 (higher account balances qualify for lower commissions), and there is a $1,000 minimum opening balance. Unfortunately, Vanguard has annual fees on its IRAs and has poor trading tools. Small investors with low account balances would do better at TD Ameritrade or Firstrade.

WellsTrade offers a rather high commission, poor trading tools and some fees that are not charged by many other brokers. On the bright side, the brokerage offers good banking services.

Investrade offers an average trading commission and fairly good trading platforms. There is an annual inactivity fee, which can be avoided with balances over $10,000. Its annual IRA fees are another drawback. There are companies with cheaper pricing on options for stocks.

Rounding out the list, Just2trade and Low Trades are two affiliated firms controlled by the same parent, the Success Trade Securities, Inc. Low Trades charges $4.95 per trade and Just2trade comes with a very low $2.50 charge. What can investors expect at the low end of the brokerage list? Recently, the self-regulatory securities organization FINRA issued a cease-and-desist order against Success Trade Securities, accusing the firm of fraudulent activities, which pretty much sum up the risks of doing business at the bottom of the heap.

Which brokerage is best is ultimately a subjective question. Firms with no minimum deposit requirement, such as Ally Invest and USAA Investments, would be a good choice for investors who have low capital to trade with. Investors who don't trade frequently should consider the higher ticket charges of TD Ameritrade or Etrade in exchange for their advanced tools. Traders who need good customer service and have at least $2,500 to deposit can look to Fidelity, Etrade, or Charles Schwab for some extra guidance. The old adage to "know yourself" is the first step in choosing the right broker. There are some good ones out there, but stay away from the worst-ranked.

Only the largest discount online stock brokers are included in our list of top 10 brokerages. Firms' star-ratings, trading commissions, and minimum initial deposits to open an account are also provided in the table. Brokers are rated based on a 5-star rating system, with the highest score being 5 stars, and the lowest score - 1 star. We considered a variety of ranking factors, including broker's commissions, additional account fees (annual, maintenance, and inactivity fees), customers reviews, investments offered, trading platforms, customer service, educational materials, and investment research. We did not not include in this list full-service brokerage firms and wealth management companies. Please visit a list of top full-service brokerages for information about the traditional brokerage houses.

If you have experience (positive or negative) of investing with an online discount broker from the list above and you would like to share your opinion, please visit a company's review page to post your feedback, or leave your comment below.

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