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Best Online Brokers of February 2024

Explore top online trading platforms to seize investment opportunities, make informed decisions, and enhance your financial portfolio.

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Best Online Brokers February 2024

Explore top online trading platforms to seize investment opportunities, make informed decisions, and enhance your financial portfolio.

Our Top Choice 2024
1
interactive brokers
Interactive Brokers
  • Best for: Traders who require low fees, global market access, and advanced tools.
  • Commissions starting at $0
  • IBKR charges margin loan rates from 5.83% to 6.83%
  • Global Access
Exceptional
9.7
Read More
2
jp morgan
JP Morgan
  • Best for: Traders who value a well-established, reputable financial institution.
  • Regulated by the top-tier SEC and FINRA in the US
  • Investor protection is $500k
  • Founded in 1985
Excellent
9.5
Read More
3
robin hood
Robin Hood
  • Best for: Traders who prioritize cost-effective stock and ETF trading.
  • Lowest costs in the industry
  • Free cryptocurrency trading
  • 24/5 stock trading
  • IPO access
Excellent
9.4
Read More
4
axos bank
Axos Bank
  • Best for: Traders who seek an all-in-one platform with banking integration.
  • No-Commission Trading
  • Real-time market data
  • Expert insights and premium TipRanks™ market research
Good
8.9
Read More
5
webull
Webull
  • Best for: Active traders, who desire advanced tools and mobile accessibility.
  • Zero commissions
  • Advanced charting tools
  • In-depth quotes
  • Earn 5,0% APY 
Good
8.7
Read More
6
sofi
SoFi
  • Best for: Traders seeking to maximize interest earnings and comfortable with utilizing online or phone-based customer service.
  • Trade stocks and ETFs, invest in IPOs at IPO prices
  • Automated investing- all in the SoFi app
  • Get up to $1,000 in stock when you fund a new account
Good
8.4
Read More
7
acorns
Acorns
  • Best for: Traders who prefer automated investing and spare-change investment strategies.
  • Earn more with two of the highest APYs available — 3.00% APY on Checking, 5.00% APY on Emergency Fund
  • Save, invest and learn from one easy app
  • Automatically save and invest with Round-Ups® feature
Good
8.2
Read More
8
fidelity
Fidelity
  • Best for: Traders who seek a comprehensive platform with extensive research and educational resources.
  • Affordable accounts
  • Tools for every solution
Good
8.0
Read More

What Is an Online Broker?

Online brokers serve as indispensable tools for investors looking to engage in stock, bond, and fund trading. In contrast to traditional brokerage firms, online brokers facilitate transactions through user-friendly digital platforms, eliminating the necessity for in-person interactions. These online platforms offer an array of valuable features, including intuitive trading tools, extensive research and analytical capabilities, as well as dependable customer support.

The widespread appeal of online brokers arises from their convenience, cost-efficiency, and accessibility. Investors can execute trades at their convenience, from any location, thanks to online brokers. Furthermore, these brokerage services typically boast lower commission fees and reduced account minimums in comparison to their traditional counterparts, making investing more attainable for a broader spectrum of individuals.

In addition, online brokers furnish investors with invaluable educational resources that empower them to make well-informed decisions. These educational offerings encompass market analysis, timely financial news updates, and informative articles, which aid in the research and selection of investments that align with individual financial objectives and risk tolerance levels.

How Does an Online Broker Operate?

Online brokers streamline access to the stock market, simplifying the process of buying and selling securities within your investment portfolio.

To begin, opening an account provides you access to a trading platform replete with a wide range of investment tools. These online brokerage platforms vary in complexity, with some offering minimalist interfaces designed for basic trades and others catering to the needs of professional traders with more intricate features.

When it comes to executing securities trades, online brokers play a crucial role. They transmit your trade orders to the relevant markets and may act as custodians themselves or route the orders to trusted custodians. Additionally, they collaborate with market makers to facilitate the matching of buyers and sellers, overseeing the settlement process that involves the exchange of cash for securities.

What Is an Online Brokerage Account?

If you are inclined to actively oversee your investment portfolio, an online brokerage account becomes an essential tool. By enrolling with an online broker, you gain access to a suite of tools designed for trading a variety of assets, including stocks, bonds, funds, futures, and options.

Similar in concept to a traditional bank account, an online brokerage account permits both deposits and withdrawals. However, instead of earning an Annual Percentage Yield (APY) on deposits as you would with certificates of deposit or savings accounts, you utilize these accounts to purchase securities with the aim of achieving favorable investment returns.

It is essential to bear in mind that these investment accounts are subject to taxation. Income payments and capital gains resulting from the sale of securities are subject to taxation, with the tax liability contingent on the type of security and the duration of ownership. Profits may be subject to either regular income taxes or capital gains taxes.

In contrast, tax-advantaged retirement accounts, such as 401(k)s or individual retirement accounts (IRAs), offer valuable tax benefits. Depending on the specific account type, contributions may qualify for upfront tax breaks, and withdrawals during retirement can potentially be tax-free. Furthermore, these accounts often provide exemptions from capital gains taxes when buying and selling assets within the account.

Pros & Cons of Investing with Online Brokerages

Pros

Simplify the process of establishing and managing a trading account.

Facilitate seamless trading of various securities.

Grant you greater control, flexibility, and speed in your trading activities, as compared to the experience with a full-service brokerage.

Lead to cost savings in terms of fees and commissions, in contrast to the expenses typically associated with a full-service brokerage.

Typically offer customer support services, though the quality may vary from excellent to less impressive depending on the specific broker.

Provide a wide range of research and analysis tools and services, although the quality may differ between brokers.

Offer valuable educational content, albeit with varying levels of adequacy from one broker to another.

Allow you to withdraw your net account balance at your convenience.

Provide access to various types of securities, including options, futures, mutual funds, ETFs, and foreign stocks. It’s important to note that the range of offerings can be more limited with certain brokers.

Act as a refuge from the complexities associated with required minimum distributions, which necessitate withdrawals from tax-advantaged accounts like traditional IRAs or 401(k)s once you reach age 72—unless you reach this milestone after December 31, 2022.

Cons

Increased susceptibility to impulsive trading decisions during market volatility, which can lead to potentially costly outcomes.

Greater likelihood of engaging in excessive trading, particularly for inexperienced investors using brokers that gamify the trading process, thereby underestimating its financial consequences.

Difficulty in determining and predicting the often obscured and unexpected fees charged by online brokers.

Taxation on earnings, which arises when an investment is sold at a profit or generates dividend income.

The necessity of meeting initial minimum deposit prerequisites to initiate trading.

The obligation to maintain an account balance above a potentially high threshold in order to avoid incurring maintenance fees.

Limited access to specific types of trading, such as futures or options, which may not be offered by all online brokers.

Selecting the Best Online Broker

When embarking on the quest for the ideal online broker, it’s essential to follow these key steps:

  1. Assess Compatibility: Begin by evaluating how well the broker aligns with your specific investing profile and objectives. Pay meticulous attention to the commissions and fees associated with the investment products you intend to use frequently.
  2. Scrutinize the Platform: Examine the broker’s trading platform and technology meticulously. Ensure that their tools cater to your unique investing style. Do you require a straightforward, user-friendly platform for long-term investments, or do you need robust tools to excel in fast-paced active trading?
  3. Leverage Research and Education: Verify that the broker offers valuable support for decision-making and investor development through high-quality research and educational resources. Additionally, consider your preferred level of customer support. Some brokers provide 24/7 live support via chat and phone, while others rely solely on email correspondence.
  4. Seek Promotions and Bonuses: Keep an eye out for promotions and bonuses. Many reputable brokers offer account bonuses based on the size of your initial deposit. For substantial deposits, these bonuses can range from hundreds to thousands of dollars, providing an enticing incentive to choose a particular broker.


Is it Possible to Purchase Stocks Online Without a Broker?

You are not obligated to engage a broker, whether online or a traditional full-service brokerage, in order to trade securities. Various alternative channels are at your disposal for purchasing stocks. These options include indirect methods like mutual funds and exchange-traded funds (ETFs), utilizing a robo-advisor for trading, or directly buying stocks.

When opting for direct stock purchases, you have three avenues to explore:

  1. Trading Apps: Trading apps function as brokers accessible through your smartphone. However, they are often streamlined, offering fewer additional features. To make the right choice, consider your specific requirements and compare available options carefully.
  2. Dividend Reinvestment Plans (DRIPs): A DRIP enables you to reinvest dividends from a company to purchase additional shares of their stock. This reinvestment process is akin to the growth of compound interest. Generally, DRIPs involve no fees because they do not require broker involvement. Additionally, DRIPs often allow for the purchase of fractional shares. It’s worth noting that not all companies offer DRIPs, and reinvested dividends remain subject to taxation.
  3. Direct Stock Purchase Plans (DSPPs): DSPPs provide the opportunity to buy shares directly from a publicly-traded company. These transactions are conducted through a transfer agent, and your account records are maintained by the company whose stock you are purchasing. Some DSPPs may establish minimum investment thresholds in terms of dollar amounts. However, many DSPPs do not offer the option to purchase fractional shares. Typically, DSPPs do not impose commissions or fees once your account is established.

How to Purchase Stocks Online through a Broker

If you’re looking to buy stocks online through a broker, here are the steps to follow:

  1. Open an Online Brokerage Account: Start by selecting an online brokerage platform from our list of recommended options. Visit the broker’s website and complete the account opening process. You’ll need to provide personal information, including your Social Security number, net worth, job title, annual income, and other financial details.
  2. Fund Your Account: After your account is approved, deposit funds into it. This can be done through a bank or wire transfer or by linking your bank account to your brokerage account.
  3. Familiarize Yourself with the Platform: Explore your chosen broker’s online trading platform. Get to know its features, including tools for stock research, charting capabilities, and various order types. Many brokers offer educational resources and tutorials to help you navigate their platform effectively.
  4. Research and Select Stocks: Conduct comprehensive research on the stocks you’re interested in. Consider factors such as the company’s fundamentals, industry trends, and analyst recommendations to make well-informed investment decisions.
  5. Place an Online Order: Locate the trading or order section within the platform. Enter the stock symbol of the company you want to buy, specify the number of shares, and choose the order type (e.g., market order or limit order).
  6. Monitor Your Investments: After your order is executed, you’ll become a shareholder of the company. Keep a close watch on your investments and stay informed about market developments that could impact your stock holdings.

It’s important to remember that investing in stocks carries inherent risks. Diversify your portfolio and assess your risk tolerance before making investment decisions. If you are new to investing, consider consulting with a financial advisor before proceeding with online stock purchases.

Top 5 Online Brokers

We’ve researched and tested the top online brokers to help you make an informed decision when it comes to getting a reliable online broker.

Interactive Brokers

Interactive Brokers is a formidable name in the world of online brokerage, standing tall as a favorite among active traders and investment professionals. With a relentless commitment to low commissions and fees, an extensive array of tradable assets spanning global markets, and a robust platform teeming with powerful tools, Interactive Brokers has redefined the landscape of online trading. Its unwavering dedication to delivering value and innovation has propelled it to the forefront of the industry, making it a go-to choice for those seeking unparalleled access, low costs, and cutting-edge trading capabilities. Discover why Interactive Brokers continues to be the hallmark of excellence in online brokerage.

Our Top Choice 2024
1
interactive brokers
Interactive Brokers
  • Best for: Traders who require low fees, global market access, and advanced tools.
  • Commissions starting at $0
  • IBKR charges margin loan rates from 5.83% to 6.83%
  • Global Access
Exceptional
9.7
Read More

Pros

Cost-effective commissions and fees

Exceptional platform and technological capabilities

Unparalleled variety of tradable products

Provides detailed reports with contact information, criminal records, and social media profiles

Cons

Inconsistent customer service experience

The platform’s complexity may be intimidating to some users

There is room for improvement in the aesthetics and user experience of the client portal

JP Morgan

JP Morgan, a financial powerhouse renowned for its global reach, has extended its domain into the realm of online trading, captivating the attention of both seasoned investors and newcomers to the market. With a solid foundation of trust and a legacy of financial expertise, JP Morgan offers a multifaceted online trading experience that seamlessly blends traditional banking prowess with digital convenience. Whether you’re a tech-savvy trader seeking sophisticated tools or a novice eager to explore the world of online investing, JP Morgan’s online trading platform provides a user-friendly gateway to a world of possibilities. Join the ranks of those who rely on JP Morgan’s online trading prowess, where innovation meets financial acumen.

2
jp morgan
JP Morgan
  • Best for: Traders who value a well-established, reputable financial institution.
  • Regulated by the top-tier SEC and FINRA in the US
  • Investor protection is $500k
  • Founded in 1985
Excellent
9.5
Read More

Pro

Commission-free trading for US stocks, ETFs, funds, and bonds

Swift and entirely digital account opening process

Backed by a reputable parent company

Earns interest on idle cash

Contra

Exclusive availability restricted to US clients

Limited range of tradable products

Provides basic research tools

Robin hood

Robinhood, the pioneer of commission-free trading, has revolutionized the world of online investing. Catering to a mobile-first generation of investors, Robinhood has emerged as a trailblazer, offering a sleek and intuitive interface through desktop and mobile apps. While it appeals to casual investors with its user-friendly design, it also caters to active traders with a robust arsenal of tools. However, novice investors may find themselves wanting for more comprehensive educational content, and there’s a gap in asset class accessibility. In a financial landscape that’s constantly evolving, Robinhood stands as a testament to the power of innovation and accessibility in the world of online trading.

3
robin hood
Robin Hood
  • Best for: Traders who prioritize cost-effective stock and ETF trading.
  • Lowest costs in the industry
  • Free cryptocurrency trading
  • 24/5 stock trading
  • IPO access
Excellent
9.4
Read More

Pro

No minimum account balance requirement

User-friendly and simplified interface

Access to cryptocurrency trading

IRA option with a 1% matching contribution

Attractive interest rates for uninvested cash

Contra

Absence of mutual funds and individual bond offerings

Limited customer support resources

Axos

Axos Self-Directed, the online brokerage arm of Axos Bank, presents a compelling choice for those seeking a seamless fusion of affordable trading fees and the convenience of integrated banking services. Serving existing Axos Bank customers and investors in search of a one-stop solution for both financial needs, Axos excels in providing a cost-effective platform for trading. However, its trading platform, while efficient, may be considered relatively basic for advanced, active traders. To access premium features, a monthly subscription fee is required, a departure from the industry norm of providing such tools for free. For advanced traders, established alternatives might offer a more comprehensive suite of features.

4
axos bank
Axos Bank
  • Best for: Traders who seek an all-in-one platform with banking integration.
  • No-Commission Trading
  • Real-time market data
  • Expert insights and premium TipRanks™ market research
Good
8.9
Read More

Pros

Zero commissions on stock and ETF trades

Extensive range of mutual funds with low minimums and no transaction fees

Seamless integration with Axos Bank

Cons

Limited variety of investment options

Certain features necessitate a premium subscription

Educational resources are lacking in depth and quality

Earns a relatively low interest rate on uninvested cash

We Bull

Webull, designed with a mobile-first approach, has captured the attention of a new generation of investors with its sleek interface available on both desktop and mobile apps. It caters to the needs of both casual investors and active traders by offering a wide range of tools and features. While it stands out for its impressive array of trading tools, active traders may find its educational content somewhat lacking. Additionally, Webull does not provide access to certain asset classes, limiting the investment options available. Overall, Webull shines as a user-friendly platform for traders, but beginners seeking comprehensive educational support may want to supplement their knowledge elsewhere.

5
webull
Webull
  • Best for: Active traders, who desire advanced tools and mobile accessibility.
  • Zero commissions
  • Advanced charting tools
  • In-depth quotes
  • Earn 5,0% APY 
Good
8.7
Read More

Pros

Cost-effective pricing

User-friendly platform

Availability of advanced tools

Access to cryptocurrency trading

Attractive interest rates on uninvested cash

Excellent order execution quality

Cons

Absence of mutual funds

Limited educational resources and support

How to select a online trading platform in 15 steps

Selecting the right online trading platform is crucial for a successful investing experience. Here are the steps to guide you in choosing the best online trading platform for your needs:

  1. Determine Your Investment Goals:
    • Define your financial objectives, such as long-term investing, day trading, or retirement planning.
    • Consider your risk tolerance and preferred investment strategies.
  2. Research Available Platforms:
    • Compile a list of online trading platforms through online research, recommendations, and reviews.
    • Focus on platforms that align with your investment goals and preferred assets.
  3. Evaluate Fees and Commissions:
    • Compare the fee structure of each platform, including trading commissions, account maintenance fees, and margin rates.
    • Look for platforms with competitive or low-cost fee structures.
  4. Assess Asset Availability:
    • Ensure that the platform offers access to the types of assets you intend to trade, such as stocks, bonds, ETFs, options, futures, or cryptocurrencies.
    • Check for a diverse selection of assets and markets.
  5. Examine Trading Tools and Features:
    • Explore the platform’s trading tools, including charting capabilities, technical analysis tools, research resources, and real-time data.
    • Evaluate the platform’s user interface for ease of use and customization options.
  6. Consider Customer Support:
    • Assess the quality and availability of customer support, including phone, email, chat, and online resources.
    • Look for platforms that offer responsive and knowledgeable support.
  7. Review Security Measures:
    • Prioritize security features, such as two-factor authentication, encryption, and insurance coverage for your investments.
    • Verify the platform’s regulatory compliance and reputation.
  8. Test the Platform:
    • Open a demo or paper trading account if available to test the platform’s features and functionality without risking real money.
    • Evaluate order execution speed and reliability.
  9. Check Mobile Accessibility:
    • If you prefer mobile trading, assess the platform’s mobile app for compatibility with your device, user-friendliness, and performance.
  10. Read User Reviews and Seek Recommendations:
    • Read user reviews and seek recommendations from experienced traders or financial experts.
    • Consider the platform’s reputation and track record for reliability.
  11. Account Opening and Funding Process:
    • Review the account opening process, including document requirements and verification procedures.
    • Ensure that funding your account is convenient and supports your preferred payment methods.
  12. Compare Educational Resources:
    • If you are a beginner, check if the platform offers educational content, webinars, tutorials, and investment research to help you learn and make informed decisions.
  13. Analyze Additional Features:
    • Consider any additional features or perks offered by the platform, such as access to initial public offerings (IPOs), retirement accounts, or cash management services.
  14. Make a Decision:
    • Based on your research and evaluations, choose the online trading platform that best aligns with your investment goals, preferences, and budget.
  15. Start with a Small Investment:
    • Once you’ve selected a platform, start with a small investment to become familiar with the platform’s functionalities and assess its suitability for your needs.

Remember that selecting an online trading platform is a personal decision, and what works for one trader may not work for another. Take your time to thoroughly evaluate your options before making a commitment, and consider seeking advice from financial professionals if needed.

Top 9 FAQs About Online Brokers

What is an Online Brokerage Account?

An online brokerage account serves as a digital portfolio that combines cash and securities on an online trading platform. Investors utilize online brokers as an alternative to traditional financial advisors for the buying and selling of various assets, including stocks, bonds, mutual funds, ETFs, options, and other financial instruments.

What is the Minimum Funding Requirement for Opening an Online Brokerage Account?

Several online brokerage firms impose minimum funding requirements, which can range from several hundred to several thousand dollars. However, the top online brokers featured in our list permit users to open an account without any mandatory minimum balance.

How to Initiate the Opening of an Online Brokerage Account?

To commence the process of opening an online brokerage account, visit the broker’s website of your choice. Each brokerage firm possesses its unique account opening procedure, typically executed entirely online. Nevertheless, you may be required to upload specific documents, such as a photo of your driver’s license. Once your account is established, you can fund it by transferring money directly from your bank account through methods such as ACH or wire transfers.

How to choose the Right Type of Online Brokerage Account?

The choice of an appropriate online brokerage account depends on your financial objectives. For instance, if you aim to save for retirement, consider opting for a tax-advantaged account like an individual retirement account (IRA). Conversely, if you are investing funds intended for use before retirement age, a taxable brokerage account may be more suitable. These accounts can be utilized both for retirement savings and for achieving financial goals before retirement.

Cash Account or Margin Account: Which is Preferable?

Experienced investors seeking active trading opportunities may contemplate opening a margin account instead of a cash account. Margin accounts enable investors to trade with more funds than initially deposited through leverage or borrowed money. However, it’s crucial to note that trading with borrowed funds, known as margin trading, can amplify potential losses. If you are relatively new to investing and do not plan to monitor your account regularly, it is typically advisable to opt for a cash account.

Required Information for Opening an Online Brokerage Account

Securities regulators mandate that brokerage firms, including online brokers, must have a clear understanding of their clients. Consequently, when opening an account, you will need to provide pertinent information to ensure the firm can identify you and assess your investment experience. In addition to personal details such as your name, date of birth, mailing address, and Social Security number, you may be asked for:
– Annual income and net worth.
– Years of investing experience.
– Investment objectives.
– Risk tolerance.

What is a Paper Trading Account?

A paper trading account serves as a simulated investment account, enabling users to select investments without risking actual capital. This account mirrors the broader market, allowing users to gauge how their chosen investments would have performed had they been real investments.

Can you purchase Stocks Online without a Broker?

While it is possible to buy stocks online without a broker through methods like dividend reinvestment plans or direct stock purchase plans, these approaches are not optimal for building a diversified, long-term investment portfolio.

Are Your Funds at Brokerage Firms insured?

Funds held at brokerage firms are somewhat insured. The Securities Investor Protection Corporation (SIPC) provides insurance for your funds in the event your brokerage is an SIPC-member broker-dealer, which is the case for many prominent brokers.

However, this insurance protects against financial failure rather than market value declines. In essence, your money is insured against the collapse of the financial firm, but not against losses resulting from market fluctuations. SIPC coverage applies to both securities and cash in your account, providing insurance of up to $500,000, including $250,000 for cash alone. It’s important to note that this insurance is distinct from the protection offered by the Federal Deposit Insurance Corporation (FDIC), which covers savings and checking accounts at banks.