Best Online Discount Brokers (Updated!)

Written by Nickel - 22 Comments

Stumble It! Digg It! Tip It! del.ico.us Facebook

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.

» 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 (Click to Apply)

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.

» 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.

» Sharebuilder (Click to Apply)

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.

Published on April 28th, 2008 - 22 Comments
Filed under: Online
email this article - bookmark it

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

Comments (scroll down to add your own):

I have been with sharebuilder for a while and was very excited to see that ING bought them, but I will be opening a zecco account soon. You just can’t beat free trades and their layout doesn’t look bad either…
Comment by ChristianPF — Apr 28th 2008 @ 1:21 pm
You should try out TradeKing!
Comment by optionstrader — Apr 28th 2008 @ 3:40 pm
Woohoo – go Zecco! Thanks everyone for helping us come out on top.

-Tony (Zecco Product Manager)
Comment by Tony Leach — Apr 28th 2008 @ 5:52 pm
I’m a huge fan of ING, so naturally I’m drawn to ShareBuilder. In my book there’s a lot to be said about customer service…
Comment by thehungrydollar.com — Apr 28th 2008 @ 7:49 pm
Sorry I missed the survey. I use Think or Swim and love it. Great charting tools and low fees (especially on options).
Comment by Vernon Keszler — Apr 29th 2008 @ 8:07 am
Go zecco,i think zecco is the best so far , cos of free trade and very good customer serivices!
Comment by jackie b — Apr 30th 2008 @ 8:46 pm
I have accounts with both Zecco and E*TRADE. While I use Zecco for purchasing individual stocks, all of my mutual funds (mostly in IRAs) are at E*TRADE, and I do all of my research there. I’m willing to put up with some frustration to get free trades, but E*TRADE’s research and analysis tools (which you can get by opening an very good savings or checking account) beat anything else I’ve seen.
Comment by Christopher Smith — May 1st 2008 @ 6:57 am
Only one issue with your results – you failed to publish how many votes were cast and how were they distributed among the brokers.
Comment by Jack — May 23rd 2008 @ 1:02 am
I have been using Sharebuilder too! however, looking at Zecco with the great prices I will be opening a new zecco account.
Comment by Linda — Jun 4th 2008 @ 3:28 pm
The Carnival of Creative Investing is up!
http://idealinvestment.blogspo.....up_05.html
Comment by ide — Jun 5th 2008 @ 4:28 pm
I used sogotrade and the site itself is not bad for price you pay but their margin department SUCKS esp guy name James – he acts like sogo is giving you a favor to trade with them and needs to learn MANNERS!! I have closed my account and would never go back. Occasionally site gets slow but not bad. Their CS and Margin Dept makes you say NO to sogo.
Comment by UT — Nov 6th 2008 @ 10:06 am
I hear really good things about Zecco so I’m going to try opening an account. Another website hated ShareBuilder and thought E*Trade’s fees were high so I am staying away from them. They recommend Scottrade, TD Ameritrade and Schwab.
Comment by stephen — Nov 23rd 2008 @ 12:24 pm
I have been using TradeKing for a few years and have had no complaint until now. I am trying to find another discount broker since they shut down my acct.
I contract growing poultry for Pilgrim’s Pride. Due to some bad timing, Pilgrim bought a competitor and grain and fuel went north and poultry meat prices went south shortly after. Eventually Pilgrim’s filed for chapter 11, but everything is business as usual and prices are getting better.
I tried to buy 30,000 shares at .17. TradeKing would not let me do it online. So I called and a supervisor told me he did not feel comfortable making the trade for me. He thought I had made some bad stock purchases and should not use IRA money to buy a penny stock. Pilgrim’s was a fortune 500 company with a high stock price of around $30 on top of this they are the largest poultry producer in the country if not the world. They are far from a penny stock company.
Anyway he refused to make the trade for me. I called back later and someone else made the trade for me. The supervisor found out and made the other broker call me and inform me the trade did go thru but “unfortunatly your account has been closed to any further buying” only selling my positions and transfering my accts to another broker.
As of today I am up over 400% in about 2 weeks.
Comment by Ricky Smith — Dec 15th 2008 @ 11:32 pm
Zecco is no longer a free lunch for those investors just starting out in the world. They will require $25 K to get free trades or 25 trades a month on March 1 2009! Hardly a steal anymore for people with under $10 k assets who are buy and hold future types, though the stock market is a steal right now. If anyone is very disappointed (like me) about this sudden loss of free trades, please talk with Zecco representatives so we can get this overturned. I hate paying transaction fees, especially in this market, and they still get some (small) interest on my unused money, so what’s the problem here?
Comment by Jeff — Feb 5th 2009 @ 12:31 am
Who is the best broker for day trading(10 to 20 daily trades)?

Can anybody beat the TradeStation $0.01/share traded?
Comment by Joe — Feb 6th 2009 @ 5:16 pm
The brokers mentioned by Nickel are not serviced to daytrader
just for retail private investor

I think sogotrade is best for price,but their services need improved.
Comment by mm — Mar 12th 2009 @ 5:03 am
Forget TradeKing if this applies to you!

Foreign citizens with a US Tax ID number and legally living in the USA may open a TradeKing account with the exception of citizens from the following countries: Australia, Austria, Belarus, Canada, Cote d’Ivoire (Ivory Coast), Cuba, France, Germany, Hong Kong, Italy, Iran, Iraq, Japan, Liberia, Libya, Malaysia, Myanmar (Burma), Netherlands, Nigeria, North Korea, Saudi Arabia, Singapore, Taiwan, Sudan, Syria, United Kingdom, Zimbabwe.
Comment by sanjeev bhadresa — Mar 14th 2009 @ 6:32 pm
I have been with Zecco for a few years now and I have not had any problems with them other than their ever changing pricing structure… I remember when I was getting 40 free trades a month… those were the days… now its 10 free if you have $25k or trade 25 times a month.
Comment by Nick L — Apr 30th 2009 @ 9:15 pm
I live in the UK and started recently with TDWaterhouse. If your thinking of using them I would advice to pay your wiring transaction fees and use an American broker particularly if you are interested in penny stocks.
Comment by no name — May 26th 2009 @ 4:39 pm
No offense, but the list looks incomplete. Have you tried Interactive Brokers? I made a research recently, and I think you may find useful:

http://thesmalltrader.com/choo.....ll-trader/

Good luck.
Comment by Jack Bronstein — Jun 22nd 2009 @ 5:42 pm
Try Scottrade, I understand this site is about saving money, however with Scottrade you get 7 dollar equity trades and no inactivity fees. Also no fee IRA’s and no load no transaction fee mutual funds. Customer service is great, any problems I just go to my local branch. Reasearch, I get access to live quotes, screeners, news and reaserch reports. I love it!!
Comment by BK — Jul 1st 2009 @ 8:46 pm
Never had a problem with Choicetrade and I don’t foresee any of these discount brokers winning over that account. What would the advantages be to switch to Tradeking or Zecco?
Comment by Rollo — Nov 4th 2009 @ 3:21 pm

Type of rates
- CD rates
- Money Market rates
- Savings rates
- Mortgage rates
Money to invest
< $10,000
Term
Up to 1 year
Money to invest
< $10,000
Desired Loan Amount
Loan Type
Refinance Purchase
State

Great deals...

Readers’ choice...

Most talked about...

Disclaimer...

The terms of third-party offers referenced on this website are subject to change without notice. While we strive to maintain timely and accurate information, offer details may be out of date. Visitors should thus verify the terms of any such offers prior to participating in them. Please see our terms of service for additional details.

fivecentnickel.com

Because Money Matters