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.)

Account Minimum Annual Fee Commission per Stock or ETF Trade Dividend Reinvestment
OptionsHouse $1,000 none $2.95 ??
Zecco none none $4.50 free*
TradeKing none none $4.95 free
Scottrade $500 none $7.00 $7.00/trade
tradeMONSTER $2,000 none $7.50 free
E*Trade $500 none $9.99 free

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.)

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