Not long ago, I asked readers to list the best online discount brokers. The results are now in, so I thought I’d compile the results here, for your edification. What follows is a list of the best online brokers.
- E*Trade (Click to Apply)
E*Trade is an uber-convenient online broker. In addition to their brokerage services, they also offer a high-yield savings account. E*Trade was also rated as the best overall broker by SmartMoney magazine, and “best of breed” by Money magazine. Their commissions are a bit higher, starting at $6.99/trade, but they have a very efficient online trading interface as well as numerous trading tools.
- Scottrade (Click to Apply)
Scottrade has received rave reviews from numerous readers. They feature low commissions ($7/trade), no inactivity or account maintenance fees, and a low minimum deposit. In 2008, J.D. Power named them “Highest in Investor Satisfaction with Self-Directed Services.” On top of everything else, they cover up to $100 in transfer fees if you already have an account elsewhere.
OptionsHouse offers rock-bottom commissions, including a flat rate $2.95/stock trade. In 2009, Barron’s named them the “#1 in Trade Experience” for options traders. As above, they cover up to $100 in transfer fees if you already have an account elsewhere, and they have a referral program where you can get paid $50 for each friend you refer to them.
- Zecco (Click to Apply)
It was a close race, but Zecco came out on top. Zecco is best known for it’s free stock trades. This makes it particularly powerful if you’d like to invest in ETFs instead of mutual funds, but don’t want to pay the commissions. If you don’t qualify for free trades, or if you use up your allotment, their base commission rate is a rock-bottom $4.50/trade.
- TradeKing (Click to Apply)
TradeKing was the only other online broker with multiple votes. They feature low commissions ($4.95/trade) and a wealth of investing tools. TradeKing was also rated the best online broker by Barron’s, and their customer service was rated #1 by SmartMoney.
Cheap, convenient, and backed by ING Direct. What more could you ask for in and online discount broker? Sharebuilder has no account minimum, no inactivity fees, and you can invest any amount (i.e., they can handle fractional shares). It’s not free, but it’s darn close in that it only costs $4/trade.