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 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 $4.95/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.
– 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.
– 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.
25 Responses to “Best Online Discount Brokers (Updated!)”
I’ve had Scottrade for almost 2 years now, and I love it. It’s ideal for new investors. Very user-friendly, great customer service.
If you decide to go with Scottrade, here’s my referral code for 3 free trades to get started.
Once you sign up, you’ll be given a personal referral code as well so you can earn free trades going forward.
Your statement in your comments about ShareBuilder could be misleading. I have been using them for a couple of years, along with ING Direct for my online bank. I am changing to thinkorswim.com because of their rates, trading platforms available, and customer service. They were bought by TD Ameritrade, but so far, so good, based on what I’ve read. Zecco might be a possibility for me, too. I actually signed up for TradeKing, but I never funded my account. I use Linux instead of Windows or Mac, and thinkorswim’s thinkDesk will run on ANY computer and has some awesome features.
If you select the “Basic” automatic investment plan, you pay $4 per “investment”, pre-arranged, only on Tuesdays, either weekly or monthly. A real-time trade will cost you $9.95.
If you select the “Advantage” plan, you get the “advantage” of 12 pre-arranged investments (which could bring your trades down to $1 each, until you factor in the $12 monthly fee for the plan. A real-time trade will cost you $7.95 under this plan.
There are some good things about ShareBuilder, but you have to evaluate it for your particular investing and/or trading style and needs. I have outgrown it and have become a more active investor and trader. Don’t forget to research the tax implications, too. IRA or HSA investing might make more sense. Good luck!
I prefer TDAM and ZECCO for playing the small caps (OTCBB and PINKS) due to fewer restrictions. I think ETRADE is shady BUT they do offer global market trading so it is a MUST have for TRUE international investors. Scottrade does not impress me because most brokerages will lower commisions for you if you trade enough. TDAM gives me $5 trades. For research I suggest using FINVIZ and stockcharts and for smallcaps I love the free reports at http://www.microcapreports.com/
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?
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!!
No offense, but the list looks incomplete. Have you tried Interactive Brokers? I made a research recently, and I think you may find useful:
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.
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.
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.
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.
Who is the best broker for day trading(10 to 20 daily trades)?
Can anybody beat the TradeStation $0.01/share traded?
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?
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.
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.
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.
The Carnival of Creative Investing is up!
I have been using Sharebuilder too! however, looking at Zecco with the great prices I will be opening a new zecco account.
Only one issue with your results – you failed to publish how many votes were cast and how were they distributed among the brokers.
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.
Go zecco,i think zecco is the best so far , cos of free trade and very good customer serivices!
Sorry I missed the survey. I use Think or Swim and love it. Great charting tools and low fees (especially on options).
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…
Woohoo – go Zecco! Thanks everyone for helping us come out on top.
-Tony (Zecco Product Manager)
You should try out TradeKing!
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…