Best Online Brokerage Firms

Important note: The following comparison applies to taxable brokerage accounts. Here’s a comparison of discount brokerage IRAs.

I’m often asked what the best online brokerage firm is. It’s hard to say that one is the absolute best, but the following 6 are the ones that I’d suggest considering.

They each offer brokerage accounts with no annual fees and no inactivity fees. (Possible exception: At E*Trade, if your balance is below $2,000, you’ll have to place one trade each quarter in order to avoid an inactivity fee.)

Additional Notes

• If you have $25,000 or more in your account, or you place at least 25 trades per month, Zecco gives you 10 free trades per month.
• If you close another account to move it to TradeKing, TradeKing will reimburse up to $150 in transfer fees charged by your old brokerage firm.
• Scottrade offers a similar reimbursement deal (capped at $100).
• While dividend reinvestment at Zecco is free, they only allow for purchases of whole shares.
• I can’t find any information as to whether or not OptionsHouse allows for free dividend reinvestment.

My Thoughts

I use TradeKing largely due to their low costs. (I’m fanatical about reducing investment costs. All I do is buy & hold low-cost ETFs.) However, if I had $25,000 in my taxable brokerage account, it’s possible I’d switch to Zecco just to take advantage of the free trades.

• You can read my TradeKing review here. (It’s written regarding IRAs, but the points–low costs, good customer service, etc.–still apply to taxable brokerage accounts.)
• You can read my Scottrade review here. (Ditto.)