Online broking is simply buying assets through a brokerage firm that has an internet-based trading platform. The late 90s witnessed the evolution of the high-speed internet. This enabled online trading of stocks, bonds, mutual funds, and exchange-traded funds (ETFs), which gave rise to online brokerage companies. These companies help investors trade their money in different investment options. Online trading is also referred to as e-trading or self-directed investment.
Based on factors like affordability, platform versatility, and customer service, here are some of the best online brokerage companies that you should consider for trading your investments.
Vanguard
It is one of the top brokerage firms, which is popular among low-cost investors. It is mostly utilized by retired and buy-and-hold investors who have a high account balance. Long-term investors should consider using this online broking company as it has a low expense ratio of ETFs and index funds.
It is one of those online brokerage companies that list the safest trading options, promising a long-term growth. Vanguard offers around $7 trades for accounts worth $50,000. The same trades cost $2 for accounts with $500,000. The trades become free once the account reaches a million dollar. Investors who frequently trade (for at least 25 times a year) might be charged with a nominal fee.
Ally Invest
If you are a seasoned investor, you should consider Ally Invest. The online trading company offers forex trading and automated portfolio management. Although there are no minimums, the commissions on trades are around $4.95. Frequent investors who trade for 30 times or more within three months are required to pay only $3.95 for their trade.
Ally Invest has a versatile PC and smartphone platform. You can make your own customized dashboard with a diverse set of trading tools. Some other useful features are a profit and loss calculator to evaluate your earnings. It also has Maxit tax manager, which informs the investors about changes in the taxes based on the trades. The probability calculator tells the likelihood of the desired target for each share.
TD Ameritrade
This is one of the best online brokerage companies. This is because it has some of the best resources for both, beginners and advanced investors. The company offers portfolio-building advice, more than a hundred ETFs, and a trading platform for both mobile and PC. TD Ameritrade has online programs for beginner traders called “web platform” where it helps investors build a balanced portfolio including ETFs, mutual funds, stocks, and bonds. TD Ameritrade also provides free resources if you like to do your own research.
You can also communicate with a panel of specialists with whom you can chat personally and get advice on the best investment options.
Scottrade
The online brokerage company has about 500 offices across the country, where investors can visit and consult a knowledgeable investor. Scottrade has more than 1000 consultants for all your investment-related queries. They do not have an account minimum as you have to pay around $6.95 as a commission for a single trade. Scottrade offers 50 commission-free trades on depositing $10,000 in the Scottrade account.
They have also lowered their contract fee from to $1.25 to $0.70 in the recent years. Another factor that makes Scottrade one of the best online brokerage companies is that it only costs around $17 to sell and buy no-load funds. The number of such transaction fee-free funds is a whopping 2600.
Robinhood
The online brokerage companies are best for commission-free stocks and ETF trades. The investors don’t have to pay the account minimum. They can immediately trade $1000 to invest in various stock options. A free upgrade enables investors to sell stocks and ETFs and buy the same elsewhere.
The online brokerage company has a great mobile app that saves you from the hassle of switching to your PC to track your stock earnings. It allows you to transfer your money automatically to your bank account and vice versa, whenever you want.