Top low cost brokerage companies with the best trading commissions on stocks and ETFs

Investors often look for the lowest cost brokerage firms with a long history in the industry. Some of these online brokers are Merrill Edge (charging $0 for stock and ETF trades), Etrade ($0), Charles Schwab ($0), or TD Ameritrade ($0). Below we list the best brokerage firms with the lowest trading commissions on stocks and ETFs.

Ally Invest rating

  • Stocks & ETFs: $0
  • Options: $0.50 per contract
  • Mutual Funds: $9.95
Promotion: Up to $3,500 cash bonus + free trades.

Ally Invest is an excellent brokerage firm for price-conscious investors. Stock and ETF commissions are $0.

This low cost broker gets top marks for a history of excellent customer service and its interactive trading platform, which is fully customizable and user friendly. Beginners will appreciate the ease of use of the trading tools. Ally's investment research tools are also intuitive and easy to understand. New investors can also take full advantage of the company's excellent education center, which allows users to gain more knowledge on investing strategies. There is even a section dedicated to “Rookies” where beginners can learn the basics on everything, from bonds to options trading strategies.

Ally Invest's investment choices are inline with bigger names in the industry, and even include forex trading which few other online brokers offer.

Ally Invest's top advantages are:

  • Very low trading commissions
  • No minimum to open an account
  • No account inactivity or maintenance fees
  • Free DRIPs (dividend reinvestment plans)
  • Advanced trading tools, interactive charts, and user-friendly platform
  • Great bonus offer with no minimum deposit requirement
More in Ally Invest Review »

4.5-star brokerage firm rating

  • Stocks & ETFs: $0
  • Options: $0.65 per contract
  • Mutual Funds: $49.99
Promotion: $0 commission stocks/ETFs + get up to $600 cash.

TD Ameritrade is the lowest cost brokerage firm that offers an amazing price - rock-bottom $0 commission on stock and ETF trades! Don't look for a catch - there is none. It's hard to believe but it's true. The company makes money on optional add-on features and other investments.

TD Ameritrade is rated the best low cost broker for stock, ETF, and mutual funds investors as well as for options traders. The broker's top advantages include:

  • $0 commissions on stocks, ETF's, and 4,200 mutual funds
  • Best trading, investment research and educational tools
  • Virtual trading account
  • No account fees
  • Free DRIPs (dividend reinvestment plans)
  • Clean, easy to navigate website
  • $0 minimum to open an account
More in TD Ameritrade Review »

Investing In Stocks With A Low Cost Brokerage

Stocks have historically provided a higher average annual rate of returns than other investments, including bonds and cash equivalents. There are two ways investors can make money by investing in stocks. The first one is through stock appreciation, and the second way is through growth or dividends. However, past performance is no guarantee of future results. Global economy, business and economic conditions, government and an investor's actions can affect the value of stock; therefore, there are no assurances that the stock will increase in value.

It is important to diversify among different stocks, types of stocks, as well as stocks of different industries and companies to avoid put all of your eggs in one basket. Investors can choose to invest into growth stocks, income stocks, blue chips stocks, value stocks and penny stocks. The latter are highly speculative and very risky investments.

By offering free tools and research within their online accounts, discount brokerages firms make it easier for investors to determine the right stock that fits investment objectives. Stock screeners and even predefined screeners are designed to help clients identify potential investments based on market capitalization, performance, dividends, P/E ratio and other criteria. Both low cost brokers mentioned above offer excellent search tools for stocks.

Before You Start Investing In Stocks With A Low Cost Broker

It is important to know, that discount brokerage firms often get compensated through additional fees charged to investors' accounts. There is nothing bad about it. Some fees can be waived with conditions, therefore can be easily avoided. Review all account fees before opening an account and make sure that you fully understand every fee. Early precautions can prevent later misunderstandings and can save you a fortune over a long time.

Opening A Low Cost Brokerage Account With A Special Offer

Brokers frequently provide special offers and incentives to entice new customers. Brokerage firms offer cash bonuses and free trades, which are the most inexpensive way to establish your portfolio with a broker and increase your earnings, potentially.

Brokerage promotions are one of the ways to cut trading commissions. Yet, it is usually one time offer, it's rarely offered to existing customers. Low stock trading commissions save you much more in a long run, especially if you are a cost-conscious investor or an active trader. It is rare when you can take advantage of both, a special offer and low pricing. Currently, both Ally Invest and Firstrade offer excellent incentives to new clients for opening an account. Moreover, Ally Invest gives both free trades and a bonus for opening new account and making a deposit.

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