Searching for online stock brokers can be daunting especially when you’re just starting out. With so many brokers to choose from and each one touting what their idea of the “must have” bells and whistles are, it’s easy to become overwhelmed.
Fortunately from our experience there are very few “must haves.” In fact, you can count them on one hand! Here are our must haves:
- Low Fee or No Fee (yes, no fee exists and we will get to that in a second)
- Reliable Platform
- Easy to Use Interface
That’s really about it. We could have included customer service on the list of must haves but we feel that so long as the broker provides a reasonable minimum level of customer service it’s acceptable. The 3 brokers we’ve listed here do just that.
Why is our list of must haves so short?
The reason why our list of “must haves” is so short is because the only thing you really need a broker for is to execute your orders. Most of the tools and services higher priced brokers can easily be found elsewhere either for free or at relatively low cost. Just check out our “Start Here” page and we’ll point you in the direction of a ton of great free info. Why pay higher commission fees on every trade you place for “must have” features that you can easily find elsewhere and save a bundle?
3 Great Low Fee or NO FEE Online Stock Brokers
So who are some great low fee or no fee online stock brokers? Here are 3 of our favorites. None of them are perfect but we’ll go through the pros and cons of each.
Robinhood
Yes, you read that correctly. Robinhood is a no fee online stock broker. How do they do it? Is it a scam…? Not at all! Click here to learn more about Robinhood and how they’re able to offer this.
Pros
- Free (doesn’t get any cheaper than that)
- No minimum deposit (great for beginners)
- Easy to use Mobile platform on iOS and Android
- Reliable order execution (trades go through immediately)
- Great for beginners
Cons
- No desktop version (if you don’t have a smart phone, you’re out of luck)
- No margin (you are not able to short a stock)
- No Option Contracts
- No phone support (email only)
Interactive Brokers
Interactive Brokers is great for traders and investors who have a little bit of experience, know the lingo, and don’t mind a poor desktop user interface (UI). I’ve tested a number of brokers and Interactive Brokers desktop UI is among the worst. Thankfully, however, their mobile platforms more than make up for it. Order execution is a dream. You can trade just about anything: stocks, ETFs, options, forex, futures, metals, etc… AND outside of Robinhood, they have the lowest commission fees around!
Pros
- Low Commission Fees: $1/trade for stocks
- Easy to use mobile platforms
- Trade Anything
- Reliable Order Execution
- Good customer support (phone and live chat)
Cons
- $10,000 minimum deposit
- Terrible desktop platform
Options House
Options House has an extremely intuitive and easy to use desktop User Interface (UI). They are fairly low cost at $4.95 a trade. However, $4.95 a trade is about the most I would tolerate. If you trade on an intermediate time frame (holding periods of weeks to months) transaction fees can eat into your profits in a hurry. For example, for every trade you make you have both a $4.95 fee to enter and a $4.95 fee to exit. If you have 100 trades a year that is $990. Now if we compare that to some other brokers (E-Trade charges $7.99/trade, $14.98 to enter and exit, $1,498 for 100 trades a year) it’s not bad. But if you can deal with a poor desktop platform from Interactive Brokers or only trade from your phone and stick strictly to buying stocks with Robinhood, you could save yourself quite a bit by the end of the year.
Pros
- Clean, easy to use desktop platform
- Easy to use mobile platforms
- Trade stocks, options, ETFs, and Futures
- Reliable Order Execution
- Good customer support (phone and live chat)
- Relatively low commission fees at $4.95/trade for stocks
- $1,000 minimum deposit for cash account, $2,000 minimum for margin
Cons
- More expensive than Robinhood and Interactive Brokers
