Updated July 2013
Online brokers are the easiest way to invest in stocks, IRAs, mutual funds and other investments. As with regular banking, you should check for trade costs and minimums, as well as security features. The best online brokers have easy-to-use sites, low commissions and fees and excellent customer service.
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Best online broker

Scottrade offers superior customer service -- including more than 500 branches nationwide -- competitive, clear pricing and solid personal finance resources. Reviewers note that its trading tools are not the most sophisticated, but they praise this broker for its $7 commission, which has been in place since 1998, and its relative lack of other fees. It takes only $500 to open a Scottrade account.
See our full review

Est. $7 per trade Estimated Price
TD Ameritrade
TD Ameritrade

Best broker for IRAs

TD Ameritrade offers an unmatched number of commission-free funds and stellar research. While it's not the cheapest for trading stocks, TD offers no-fee, no-minimum IRAs, setting it apart from other brokers. You can set up accounts online, by phone or at one of their more than 100 local branches.
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No fees for IRAs; Est. $10 per trade Estimated Price

Best discount broker

With cheap commissions, no minimums, stellar customer service and an active and helpful online community, TradeKing is an excellent choice for a discount broker. Its investment options are generous too: you can trade stocks, options, exchange-traded funds, mutual funds and currencies on TradeKing.
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Est. $5 per trade Estimated Price
See a side-by-side comparison of key features, product specs, and prices.

Online Brokers Runners Up:

E*Trade Est. $10 per trade

7 picks including: Barron's, Kiplinger.com…

Fidelity Est. $8 per trade

6 picks including: Kiplinger.com, SmartMoney.com…

Interactive Brokers Est. $0.005 per trade

5 picks including: Barron's, Technical Analysis of Stocks & Commodities Magazine…

OptionsHouse Est. $4 per trade

5 picks including: Barron's, TopTenReviews.com…

Charles Schwab Est. $9 per trade

4 picks including: J.D. Power & Associates, Stockbrokers.com…

optionsXpress Est. $10 per trade

4 picks including: TopTenReviews.com, Reviews.com…

Vanguard Est. $7 per trade

3 picks including: J.D. Power & Associates, Yelp.com…

ShareBuilder *Est. $4 per trade (automatic investment)

2 picks including: Barron's, SmartMoney.com…

USAA Brokerage Services Est. $8.95 per trade for most traders

2 picks including: J.D. Power & Associates, ConsumerReports.org…


2 picks by top review sites.

Finding the best online broker

Over the past few years, the nature of online investing has changed. Online brokers have added many new products and services, ranging from new investment options to more online education and social networking features. Mobile apps in particular have proliferated and are now used by the majority of investors, according to Barron's, which now takes mobile offerings into consideration in its annual rankings of online brokers. Most are available for iOS and Android; the best allow investors to make trades, check their accounts, stream real-time quotes and access in-depth research.

Many online brokers have also lowered their commissions and fees, opting for flat-rate prices rather than sliding-scale or tiered pricing. You can expect to pay around $7 to $10 per trade these days, though some offer even lower prices (with fewer services). While the flat-rate pricing trend is becoming the industry standard, however, it's imperative that potential customers read the fine print to understand online broker's commissions, fees and maintenance costs.

Online brokers offer more than just stocks

Gallup reports that just over half of Americans hold stocks, though most online stockbrokers also offer access to everything from options to mutual funds to international stocks (though the latter might be limited). Research and educational resources are key in deciding which investments to make, and many online brokers have stepped up their offerings in this category. Real-time quotes are the industry standard, and many brokerages offer free research reports from well-known third-party sources like Morningstar and Standard & Poor's. In addition, detailed charts, graphs and even recommended retirement plans and investments (based on your portfolio and risk tolerance) are likely to be offered with an online account.

Traditional brokerages like Fidelity, Charles Schwab, Scottrade, TD Ameritrade and Vanguard dominate the online brokerage market, but nipping at their heels are innovative lower-cost firms like TradeKing, OptionsHouse and Interactive Brokers. In addition, online broker E*Trade is making a comeback as one of the stronger firms.

Many online brokers receive stellar reviews from numerous expert sources and financial bloggers. Based on professional reviews, three companies stand out amid the stiff competition: TD Ameritrade, for IRAs; Scottrade, for overall investing; and TradeKing, for discount trades.

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