Most investors trade stocks and other investments through an online broker. The best brokers are well-rounded, offering high-quality, responsive customer service, fast trade execution, comprehensive yet user-friendly stock trading platforms, free investment research, and a large selection of investments.
In addition to those features, the companies that made our list of the best brokers don’t charge commissions when trading stocks or exchange-traded funds. Other fees may creep up — most commonly, brokers tend to charge contract fees to trade more complex investments like options, and there may be fees to transfer investments out of your account. Both are factored into our analysis.
How we select the brokers for this list
The star ratings below represent each online brokerage’s overall score. Our reviewers — who are investing writers and editors on NerdWallet’s content team — spend months compiling this list every year, extensively testing each brokerage account’s stock trading capabilities in our analysis. That way, we’re able to report on every aspect of the user experience, from funding a new brokerage account to actually placing trades.
We score each online broker against a set of criteria that factors in both the features offered and the actual user experience of using those features. This includes how easy it is to sign up for and fund a new account. Note that a broker may score highly for the stock trading platforms, tools or research it offers, but low for the experience of actually using those features. This means a broker can offer an advanced stock trading platform, but if it is clunky to use or the process of opening an account is unnecessarily arduous, that will be reflected in their score.
How to choose the best online broker
There are a lot of factors to consider when selecting a broker, and the decision will likely come down to individual priorities. Some investors are willing to pay higher fees for a state-of-the-art platform; others count costs above all else. Some may want to stick with the largest brokerage firms with heavy name recognition; others may be more interested in sifting through the smaller brokers to find the perfect fit for them.
Commissions
Brokers generally offer a similar menu of investment options: individual stocks, options, mutual funds, exchange-traded funds and bonds. Some will also offer access to cryptocurrencies, futures trading and foreign currency exchange markets.
Commissions or other trade fees are rare among online brokers these days, but they can pop up on certain investments:
- Individual stocks: Some brokers still charge a commission to buy and sell stocks, either per trade or per share. However, the vast majority of online brokers now charge no commission.
- Options: Options trades often incur the stock trade commission (if charged by the broker), plus a per-contract fee, which usually runs between 15 cents and $1.50. See NerdWallet’s list of the best brokers for options trading — several have recently eliminated their contract fee completely.
- Mutual funds: Some brokers charge a fee to purchase mutual funds. You can limit mutual fund transaction costs or avoid them completely by selecting a broker that offers no-transaction-fee mutual funds. (Mutual funds also carry internal fees called expense ratios. These are charged not by the broker, but by the fund itself.) See the ranking of best brokers for mutual funds.
- ETFs: ETFs trade like a stock and are purchased for a share price. Most brokers offer ETFs with no commission. Here’s a list of the best brokers for ETF investors.
- Cryptocurrencies: More and more brokerages are starting to offer access to a few cryptocurrencies, but be sure you understand the risks and fee structures that may be associated with these trades. See our list of the best crypto platforms.
- Bonds: You can purchase bond mutual funds and ETFs at no charge by using no-transaction-fee mutual funds and commission-free ETFs. Brokers may charge a fee to purchase individual bonds, with a minimum and maximum charge. Some brokers offer access to U.S. Treasurys at no fee. See our list of the best brokers for investing in bonds.
Reliability
There’s a wide range of brokers out there. Some have been around for decades, while others are relatively new to the scene. That doesn’t mean these newcomers are untrustworthy — if they’re handling trades for other people, then they’re regulated by the Securities and Exchange Commission and are members of a self-regulatory body, such as the Financial Industry Regulatory Authority. But it does mean they may be unproven during a variety of stock market scenarios.
If this is concerning to you, you may want to consider investing with a large institution. But if all you need is a no-frills investment account, then trimmed-down apps or relatively new brokerage firms are likely fine for you.
Account fees
You may not be able to avoid account fees completely, but you can certainly minimize them. Most brokers will charge a fee for transferring out investments, or for closing your account entirely. If you’re transferring to another broker, that new brokerage firm may offer to reimburse your transfer fees, at least up to a limit.
Most other fees can be sidestepped by simply choosing a broker that doesn’t charge them, or by opting out of services that cost extra. Common fees to watch out for include annual fees, inactivity fees, trading platform subscriptions and extra charges for research or data.
» Learn more about brokerage fees and how to minimize them
Pricing and execution
Most casual stock traders won’t notice differences in execution quality between brokers, as they tend to be relatively minor, especially if you’re placing few trades. But active traders, particularly those who trade large quantities of shares frequently, often do. For our reviews, we look at each broker’s self-reported execution quality, which is defined as the percent of a broker’s orders that are executed at or better than the National Best Bed and Offer.
Tools, education and features
If you’re new to investing, it may be best to look for a brokerage that offers free educational resources, such as live webinars, thorough how-to guides, video tutorials, glossaries and more.
And, if you’re interested in continued learning around advanced trading strategies, be sure to research how well the broker supports its clients in helping them understand the risks of such strategies. This may mean guidance from an on-call customer support team, a live chat function or clear and in-depth instructions on how to use these investment products responsibly.
Another great feature to look for is fractional shares, which let investors purchase stock or ETFs by the dollar amount, rather than by the number of shares. This is especially helpful for investors who don’t have much money to invest but want to build a diversified portfolio, or are looking to set up a dollar-cost averaging strategy. (Learn more about fractional shares.)
Active traders may want a little more out of their brokerage account. Some brokers offer highly customizable downloadable platforms with in-depth analysis tools, or access to additional research and data for an extra cost. If these aren’t the types of tools and resources you’ll need, be sure to avoid paying extra for them.
Promotions
Online brokers, like many companies, frequently entice new customers with deals, such as a cash bonus on certain deposit amounts. It isn’t wise to choose a broker solely on its promotional offer — a high commission over the long term could easily wipe out any initial bonus or savings — but if you’re stuck between two options, a promotion may sway you one way or the other.
» Get a bonus: View the best brokerage promotions right now
How to switch online brokers
Switching to a new broker is quick and easy, and in most cases, the entire process can be handled online.
Here’s a quick three-step process to transfer your investments to a new online broker:
- Find your most recent brokerage account statement, then open an account at the new broker. You can do this online, and you’ll need to supply details like your address, income, birthday and Social Security number.
- Initiate the transfer process through the new broker. You’ll likely be asked to fill out a form online that initiates an ACAT, or Automated Customer Account Transfer. This is where you’ll need your brokerage account statement — you’ll have to supply things like your old account number. Your new online broker will use that information to confirm that your investments can be transferred in-kind, which means you don’t have to sell them. This is often the case with most stocks, ETFs and mutual funds. If the new brokerage doesn’t support one of your investments, you can sell it and transfer the cash instead.
- Play the waiting game. It can take up to seven days to complete the transfer — your brokerage firm will give you a more specific timeline. Once the transfer is complete, you’ll be notified and you can begin trading.