Best Brokerage Accounts 2024: A Guide for Investors
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A brokerage account is like a checking account for your investments. The difference, however, is that brokerage accounts act as a safe place to hold investable assets like stocks, bonds, ETFs, mutual funds, and crypto.
Best Online Brokerages
- Charles Schwab: Best overall
- SoFi Invest: Best for beginners
- Fidelity: Best for retirement savings
- Interactive Brokers: Best for active trading
- Public: Best for mobile
- Stockpile: Best for kids and teens
Compare Top Online Brokerage Reviews 2024
The best brokerage company for you depends on the kinds of assets you’re looking for, your investment style, and how much you’re willing to pay for top-notch trading tools like auto rebalancing, market trades, and real-time market data.
Here are the best online brokerages as picked by Business Insider’s editors in 2024.
Charles Schwab
Best for: All investors
Schwab is a major discount broker and one of the largest investment management firms in the United States. Charles Schwab is one of the best brokers for trading commodity futures, offering a range of brokerage accounts and products that meet the needs of virtually any investor.
Hands-on investors are best served by the basic Schwab self-directed brokerage account, which gives you access to various investment choices. If you want more help, you can sign up for managed Schwab Intelligent Portfolios, one of the best robo-advisors. This account also doesn’t charge any fees.
Cons: There are also high phone and broker-assisted trade costs.
SoFi Invest
Best for: Beginners
SoFi® is an online brokerage featured in our guides for the best investment apps. It charges almost no fees for its investment accounts, which include self-directed investing and automated investing (managed portfolios) with no recurring fees and a very low $1 minimum to get started.
SoFi‘s self-directed “Active Investing” account has no fees for trading stocks and ETFs. You can buy fractional shares of stocks, which SoFi calls “Stock Bits.” SoFi also has a few of its exchange-traded funds that could be a fit for your portfolio. Plus, it now offers options for trading and IPOs.
Cons: SoFi has a limited selection of research and tools
Fidelity
Best for: Retirement Saving
Fidelity offers multiple account types, a long list of available investments, and competitive pricing with industry leaders for low-cost investments. It offers zero-expense ratio Fidelity Flex mutual funds and uses them for its robo-advisors, Fidelity Go. Fidelity Go now has unlimited one-on-one coaching calls for account balances of $25,000 or more.
The online stock trading app Fidelity has no minimum balances or recurring fees. It offers commission-free stock and ETF trades with fractional shares available. You can invest in stocks, ETFs, options, mutual funds, bonds, CDs, and precious metals. Fidelity offers international investing in foreign markets and foreign currency exchange between various different currencies.
Fidelity can be a great choice for most investment needs, but it’s especially strong for investors with a long-term retirement focus. The combination of low fees and a focus on helping investors reach a successful retirement helped make it the top choice for retirement brokerage accounts.
Cons: Fidelity gives you a lot for free, but mutual funds outside of the no-fee list cost up to $49.95 each, not including added fees for phone or broker-assisted trades. In addition, Fidelity charges higher margin rates than many competitors.
Interactive Brokers
Best for: Active Investors
Interactive Brokers is a top investment platform for all kinds of investors. Trade at higher volumes and get access to tools optimized for your investing needs. Typical investors may not care about the difference of a few seconds when entering and executing a trade. Very active traders, however, care about milliseconds.
Interactive Brokers has multiple pricing options depending on your level of trading activity and your personal trading needs. The basic account, IBKR Lite, gives you commission-free stock, ETF trades, and competitive fees for most other trades.
IBKR Pro accounts use tiered or fixed pricing models. This means you won’t get completely commission-free trades as you do with IBKR Lite. Pro accounts have additional access to market data. They also get access to the IBKR Web Trader platform and IBKR APIs for automated trading. Algorithmic trading, also known as algos, is included with Pro accounts.
Cons: Not all accounts and trades are free. Choose the right account level for your investment goals and experience.
Public
Best for: Mobile
Public is an investment app that uses a mobile-first experience. The result is a mobile investment experience that’s somewhat unique but still easy to navigate for both beginner and experienced investors.
As the name suggests, trades at Public allow you to connect with other investors on the platform. You can follow others and chat about investment ideas. You can even join a group chat for live interaction with other investors. In some ways, it’s like a built-in social network for investors.
Another useful feature for newer investors is the ability to view various themes. These group stocks by industry or other major categories to help you zero in on companies that make sense for your investment strategy. The Public uses a commission-free pricing model, so most users won’t pay any fees when they trade.
Cons: Public doesn’t offer a robo-advisor for hands-off automated trades. Its account selection is also limited as you can’t invest in retirement, education, or custodial accounts with Public.
Stockpile
Best for: Kids and Teens
Stockpile is a top investment platform for kids to learn how to save and invest in their future. Stockpile offers brokerage and custodial accounts with no recurring fees, minimums, or gift card fees. Invest in fractional shares for $1 and even trade popular cryptocurrencies. The online brokers have a monthly subscription fee.
Other investable securities include over 4000 stocks and ETFs in five different kid account options and one adult account. Cryptocurrencies are also available. Parents and kids will enjoy the built-in education resources, such as the “mini-lessons,” which teach stock market basics that prepare anyone for a more successful future in the stock market.
Stockpile is great for kids and teens for a few reasons. The simple and easy-to-navigate platform shows kids the logos and companies they are familiar with in their investment portfolios. You can fund the account through a bank account or with stock gift cards.
Cons: Other types of investments (such as mutual funds) are not supported.
Best Online Brokerage FAQs
Our top pick for the best online trading platform is the Charles Schwab brokerage account. It offers low-fees, advanced security, and a wide range of investment options and features that meet the needs of virtually any investor.
The best place to buy stocks online is through popular online brokerages like Charles Schwab, Fidelity, SoFi Invest, and more. Online brokerage platforms offers low fees, easy trading access, top-notch security, and a range of helpful trading tools.
A brokerage account cost is often free with minimal recurring fees. However, certain advanced online brokerage accounts may charge much higher fees and minimums in exchange for access to powerful trading tools and data. Some fees for phone or broker-assisted trades are common, as are commissions for some mutual funds and other investments.
What you need to open an online brokerage account includes your personal information to comply with current laws and regulations. You’ll need information such as your name, address, telephone number, Social Security number, annual income, and more.
A paper trading account is a tool to help investors try out investment strategies without actually using cash.With a paper trading account, you can practice buying and selling investment assets before applying your strategy to your live account. Beginners can benefit from paper accounts since these accounts are usually free and have no risk.
Introduction to Brokerage Accounts
Online brokerage accounts are licensed firms in which a broker is responsible for executing a client’s orders. You can also check out the best online brokerage accounts for beginners.
Types of Brokerage Accounts
Types of brokerage accounts include:
- Self-directed brokerage accounts (individual and joint)
- Robo-advisors (aka automated accounts)
- Retirement savings accounts
- Education savings plans (like the best 529 plans)
- Custodial accounts (UGMA/UTMA)
- Cryptocurrency trading accounts
- Health Savings Accounts (HSA)
How to Open a Brokerage Account
Everyone’s investment goals and preferences are unique, and not all brokerage accounts fit perfectly. To choose the best online brokerage, start by looking at your investment style and what you want from a brokerage. Whether that’s cutting-edge active trading tools or a long list of no-transaction-fee mutual funds, there’s a good online brokerage for everyone.
Choosing the Right Brokerage
Review the following information to choose the right brokerage account for you:
- Evaluate your risk tolerance, financial goals, and time horizon
- Explore different investment options in brokerage accounts to find the right one for you
- Compare fees, minimums, and investment features
For most investors, a long-term, passive investment strategy is ideal. Many experts suggest building a diverse portfolio of low-cost index funds over picking individual stocks and riskier active trading tools.
Security and insurance of brokerage accounts should also be considered before opening an account. Most platforms offer substantial coverage and security measures, but you’ll want to check for any recent scandals or lawsuits in which the platform may be involved.
Once you understand what you need, consider costs, platforms, investment account types, and available investments to decide what’s best for you.
The Account Setup Process
After you decide which online brokerage platform you want to open an account with, you can begin the account setup process. Generally, brokerages require you to provide personal information like your name, age, address, Social Security number, and banking information.
Criteria for Evaluating Brokerage Accounts
In evaluating the best online brokerage accounts available today, we rate investing products on various criteria. The most important factors for Personal Finance Insider rates and reviews products are pricing, account types, investment availability, platforms, and overall customer experience. Investing platforms are given a rating between 1 and 5.
Fees and Commissions
Fees and commissions greatly vary between platforms. The top brokerage accounts charge the lowest fees with little to no commissions. However, advanced brokerages with more sophisticated trading tools and investment options tend to charge more for their services.
Some of the fees and commissions you may come across are:
- Trading fees
- Annual account fees
- AUM fees
- Account management fees
- Inactivity fees
- Broker commission
- Expense ratios
- Subscription or membership fees
Some brokerages require a minimum deposit to open an account. Depending on the brokerage and the type of account, this minimum can range from $0 to $10,000 or more. Make sure you’re comparing fees in top brokerage accounts as well.
Account Features and Services
Certain brokerage accounts may be better suited for your needs depending on your preferred investment strategy and goals, especially if you’re seeking out specific account features and services.
For example, robo-advisors are likelier to include low-maintenance investment features like automatic rebalancing, tax-loss harvesting, and dividend reinvesting.
Retirement-focused investors or those with more complex finanical situations may want access to a CFP or human consultant. While many online brokerage platforms offer this service, who is eligible and how much it costs greatly varies from platform to platform.
Investment Options
Brokerage accounts have a range of investment options, including:
Why You Should Trust Us: Our Expert Panel For The Best Online Brokerage
We consulted financial advisors, investing experts, and our own wealth-building reporter to inform our choices for the best online brokerages.
Insider
We interviewed the following investing experts to see what they had to say about online brokerages:
- Brian Fry, CFP, founder at Safe Landing Financial
- Charlotte Geletka, CFP, CRPC, managing partner at Silver Penny Financial Planning
- Kaysian Gordon, MBA, CFP, CDFA, CPA, wealth manager at Clarus Group
What are the advantages or disadvantages of opening a brokerage account?
Brian Fry, CFP:
A taxable brokerage account offers the flexibility to have funds available when needed and without a tax penalty. They offer transparency and freedom when considering costs and investment options.
Other account types may add more value and/or tax-efficiency depending on a household’s financial situation. For example, if qualified, HSAs provide tax deductions, tax-free growth, and tax-free distributions if used for qualified medical expenses; retirement accounts may provide tax deductions, tax-deferred or tax-free investment growth, and potentially tax-free distributions.
Education accounts may provide tax deductions and/or tax-free distributions if used for qualified educational expenses.
Charlotte Geletka, CFP, CRPC:
The advantages include access to stock exchanges to buy almost endless options of investments. This is where you can purchase stocks, bonds, ETFs, mutual funds, options, and almost the entire inventory of the open markets.
The multitude of options can also be a disadvantage. Most retirement plans offer a curated list of choices that have been well-vetted by consultants and investment experts. When you go into a brokerage account, it is daunting to know where to start. The recent rise of social media blogs surrounding investing may increase interest, but be cautious about investing, as any investment comes with risk.
Kaysian Gordon, MBA, CFP, CDFA, CPA:
The advantage of opening a brokerage account is — if you’re interested in investing in stocks or bonds, mutual funds, or ETFs, as example, a brokerage is a great way to do it.
Savings accounts or checking accounts just do not have those features. So the disadvantage is [that] you have to be aware of what you’re looking for. Lots of different brokerage accounts will provide you with different things, so it’s a matter of specifically what it is that’s important to you.
Who should consider opening a brokerage account?
Brian Fry:
A taxable brokerage account can be a good fit for anyone and everyone. Before saving in a taxable brokerage account, it’s important to consider where saving adds the most value to your unique financial situation. Make sure to have an adequate emergency fund.
Charlotte Geletka:
Once you have set up an emergency fund and started funding a retirement account, then you might consider opening a brokerage account as a place to invest after-tax dollars.
Most often, the account you have set up in a brokerage will be a flexible investment. This is great because you have use of the money for various purposes, and you are not tied to specific withdrawal requirements the same way you would be in a retirement or college 529 account.
Kaysian Gordon:
When you’re looking to start the process of investing after you have saved the amount that you need for your emergency funds — and typically that’s three to six months— you should start looking to invest other personal cash. Make it a point to contribute as frequently as you can, because that’s how wealth is built over time.
Is there any other advice you’d offer someone who’s considering opening a brokerage account?
Brian Fry:
Before saving with a taxable account, consider the order of where you should save first to accomplish your financial goals best. Are you comfortable taking responsibility in making investment decisions? How are you going to rebalance? How are you going to take emotion out of investing? Taxable accounts can be a good vehicle if you can check all the boxes.
Charlotte Geletka:
There is a difference between trading and investing. Trading is exchanging [which is] usually short-term in nature. Investing involves time and is long-term in nature.
Kaysian Gordon:
Do your research because that’s very important. Think about the things that are important to you. Do a comparison of the different names that you hear and see what the benefits are of one company over another before making a decision.
Nothing will have everything you need, but go with the brokerage account with the best of what you need.