The Best Online Brokers, 2020
The brokerage industry is evolving quickly. Our survey spotlights firms with the best investment choices, tools, advice and more.
Business is booming at brokerage firms. Amid unprecedented market volatility caused by the COVID-19 pandemic, Fidelity added 2.1 million new brokerage accounts in the first half of the year—a company record. At TD Ameritrade, clients made an average of 3.4 million trades a day in the three months that ended in June, more than four times greater than last year’s levels.
The surge in business—driven by pandemic-related portfolio shifting and bolstered by last year’s industry-wide move to zero commissions—has forced brokerage firms to ramp up efforts to ensure that they serve a broad range of new and existing clients.
Our rankings seek to find the brokerages with the most to offer to most investors. Check out our top picks.
#1. Fidelity
- Overall score: 94.0
- Commissions and fees: 3rd
- Investment choices: 1st
- Mobile app: 3rd
- Tools: 1st
- Research: 5th
- Advisory services: 1st
- User experience: 2nd
Pick Fidelity for: Advice
Brand-new investors can fund a Fidelity Go robo-advisory account for $10. And if they have a balance of less than $10,000, they’ll pay nothing in annual fees or expenses. Of course, Fidelity still offers the gamut, including full-service, one-on-one advisories for clients with big portfolios.
Top perks: Fidelity brokerage customers have access to four mutual funds with no minimum investment and 0% expense ratios Also, the Fidelity Rewards Visa Signature card comes with no annual fee, and all purchases earn 2% cash back, which can be divided and deposited into up to five Fidelity accounts whether they’re your accounts or not.
#2. Charles Schwab
- Overall score: 90.6
- Commissions and fees: 5th
- Investment choices: 4th
- Mobile app: 4th
- Tools: 4th
- Research: 1st
- Advisory services: 2nd
- User experience: 4th
Pick Charles Schwab for: Research
Firms that did well in this category marry a focus on high quality research with a wealth of sources and investing ideas for customers to explore. Schwab clients can read analyst reports from CFRA, Morningstar, Argus and Credit Suisse, as well as numerous computer-generated, quantitative research reports.
Top perks: Schwab investors can get market information, stock quotes and updates on personalized watch lists nvestors can interact with their Fidelity, Interactive Brokers, Schwab and TD Ameritrade accounts by chatting with Alexa, Amazon's digital assistant.
#3. E*Trade
- Overall score: 86.8
- Commissions and fees: 7th
- Investment choices: 3rd
- Mobile app: 1st
- Tools: 5th
- Research: 4th
- Advisory services: 4th
- User experience: 3rd
Pick E*Trade for: Mobile app
E*Trade revamped its mobile app over the past year, Updates including a beefed-up charting tool, real-time streaming quotes, mobile check deposit and customizable views. E*Trade customers can access stock, mutual fund, ETF, option and margin trading with the tips of their thumbs, but those looking to trade bonds on the go are out of luck.
Top perks: E*Trade offers traditional banking services, such as checking and savings accounts. Its Max Rate Checking Account comes with unlimited ATM reimbursements on charges that other financial institutions levy (though you may be subject to charges from the owner/operator of the ATM).
#4. Merrill Edge
- Overall score: 82.1
- Commissions and fees: 2nd
- Investment choices: 7th
- Mobile app: 5th
- Tools: 3rd
- Research: 2nd
- Advisory services: 6th
- User experience: 1st
Pick Merrill Edge for: User experience
Our testers continue to like Merrill Edge’s “story” modes, which help investors analyze stocks, funds and their own portfolios by breaking down analysis into easy-to-understand language and graphics. Merrill Edge now offers a sleek new Idea Builder page featuring baskets of stocks selected by BofA Securities analysts that stand to benefit from a transforming world. Themes include Big Data, e-sports and future food.
Top perks: Merrill Edge customers who sign up for Bank of America’s Preferred Rewards program receive a 25%, 50% or 75% boost on the cash-back reward from eligible Bank of America credit cards, depending the combined assets in your accounts (the 25% level requires $20,000). Say you hold a Bank of America credit card, which offers 3% on a particular purchase. A $100 purchase would earn $3.75, $4.50 or $5.25 rather than $3. Similarly, a purchase that earns the buyer 100 points would actually earn 125, 150 or 175 points.
#5. Interactive Brokers
- Overall score: 80.7
- Commissions and fees: 1st
- Investment choices: 2nd
- Mobile app: 2nd
- Tools: 6th
- Research: 9th
- Advisory services: 3rd
- User experience: 8th
Pick Interactive Brokers for: Commissions and fees
Because investors can buy or sell stocks and ETFs commission-free everywhere now, we took a closer look at the pesky fees that brokerage firms continue to charge (margin lending, bond trading, etc.) as well as the costs you may not see, such as the payment your brokerage firm pockets for sending your trade to a certain firm for execution. Interactive Brokers wins on the margins—literally.
Interactive has two pricing tiers: IBKR Lite offers free trading, and IBKR Pro is geared toward active traders, with more-advanced features and a small trading commission. The Lite version has higher rates than Pro to trade on margin, but in many cases, the 2.58% rate that Lite clients pay is still comfortably lower than the lowest fee that other firms charge to trade on margin—and often, the other brokers’ low fees are only available for clients with hefty six-figure balances.
Top perks: Speaking of options: If you have approval for a margin account (or $50,000) you may be able to earn a little extra cash by authorizing Interactive Brokers to lend stocks in your portfolios to traders who may want to sell them short and who are willing to pay interest to borrow them. The firm will split whatever income it earns on your stocks.
#6. TD Ameritrade
- Overall score: 73.3
- Commissions and fees: 9th
- Investment choices: 6th
- Mobile app: 6th
- Tools: 6th
- Research: 3rd
- Advisory services: 7th
- User experience: 5th
Pick TD Ameritrade for: Tools
No broker provides more educational programming for customers than TD Ameritrade. In addition to the wealth of instructive videos on the brokerage site, TD has more than 1,800 investor webinars on its YouTube channel. It even broadcasts programs on its proprietary network every trading day, starting with a show on futures markets at 8 a.m. and ending with lessons on market fundamentals, among other things, at 9:30 p.m. TD also earns high marks for its charting tool, which offers 331 technical indicators from which to choose, second only to TradeStation’s 407.
Top perks: All purchases on the TD Ameritrade Client Rewards Visa come with 1.5% cash back. Deposit your rewards into your TD Ameritrade brokerage account and you’ll receive a 10% bonus on the cash-back.
#7. Ally
- Overall score: 57.7
- Commissions and fees: 6th
- Investment choices: 9th
- Mobile app: 10th
- Tools: 8th
- Research: 8th
- Advisory services: 8th
- User experience: 6th
Pick Ally for: Getting started for less
Ally offers robo-advisory services for accounts with as little as $100, far less than at market biggies like Schwab, Merrill Edge and TD Ameritrade.
Top perks: Like E*Trade, Ally offers traditional banking services, such as checking and savings accounts. Ally accountholders can use over 43,000 Allpoint ATMs for free, and the bank will reimburse up to $10 in ATM fees each statement cycle.
#8. You Invest by JP Morgan
- Overall score: 50.9
- Commissions and fees: 11th
- Investment choices: 8th
- Mobile app: 9th
- Tools: 10th
- Research: 7th
- Advisory services: 5th
- User experience: NA
Pick You Invest by JP Morgan for: Research
Perhaps unsurprisingly, investors at You Invest get access to research from pros at J.P. Morgan.
#9. Firstrade
- Overall score: 48.2
- Commissions and fees: 4th
- Investment choices: 5th
- Mobile app: 11th
- Tools: 11th
- Research: 10th
- Advisory services: NA
- User experience: 7th
Pick Firstrade for: Option investing
Investors who like to trade options won’t find a cheaper shop than Firstrade, which waives not only the commission on options trades but also the contract fee that other brokerages charge (ranging from $0.50 to $0.75 per contract). Firstrade does not offer advisory services.
Top perks: Firstrade will reimburse up to $200 in transfer fees when you transfer money from another firm’s account. You’ll also get a free share of stock (chosen by an algorithm) if you refer a friend who opens an account – your friend gets a share as well.
#10. WellsTrade
- Overall score: 44.8
- Commissions and fees: 10th
- Investment choices: 11th
- Mobile app: 7th
- Tools: 9th
- Research: 6th
- Advisory services: 9th
- User experience: NA*
Pick WellsTrade for: WellsTrade declined to furnish us with a test account.
#11. TradeStation
- Overall score: 44.3
- Commissions and fees: 10th
- Investment choices: 10th
- Mobile app: 8th
- Tools: 7th
- Research: 11th
- Advisory services: NA
- User experience: 9th
Pick TradeStation for: active investing.
TradeStation sports a robust active-trader desktop platform that makes setting up complex options trades a breeze for experienced wheeler-dealers.
Top perks: As with Interactive Brokers, TradeStation customers may be able to earn a little extra cash by authorizing the firms to lend stocks from their portfolios for others to use to take options positions. You’ll get half of what the firm makes, and the money goes directly into your account. You’ll earn more money on long positions in thinly traded stocks than you will holding widely available names. Either $25,000 or one year of trading experience is needed for entry to this.
About Our Rankings
We limit the field to brokers that offer stock, mutual fund, exchange-traded fund and bond trading, which left 11 firms for us to scrutinize this year. (T. Rowe Price and Vanguard declined to participate, and Robinhood allows only stock trading.) We tested each firm in seven categories, including the breadth of their investment choices and the usefulness of their tools and research.
Given the move to free trading, we tweaked our methodology for 2020. Fees and commissions received less weight in our calculation. In turn, we upped the importance of brokers’ advisory offerings. Aside from the user-experience category, which was based on a test-drive of each broker’s website and mobile app by Kiplinger investing writers, category scores were calculated based on data provided to us by the brokerages, which we vetted to the best of our abilities.
Here’s how it breaks down: commissions and fees, 5%; investment choices, 20%; mobile app, 25%; tools and research, roughly 13% each; advisory services, 15%; and user experience, 10%. The best firm for you may depend on how you invest, how often you trade and the services outside of buying and selling you need.
