To be fair, all online brokers are technically discount brokers, and you can be sure price factored into our selections for the best brokers for stock trading. But here, we’ve really drilled down to costs, pulling out the best brokers for traders who prioritize saving money on commissions and fees above all else. The best part? Many of these brokers also excel in other areas, too, by offering innovative tools, state-of-the-art trading platforms or a wide range of investment options.
Best discount brokers overall
These brokers stand out for their low trade commissions paired with high-quality service offerings.
- Provides low commissions and superior trading tools, particularly for options traders. See our OptionsHouse review.
- Commission: $4.95 per trade
- Account minimum: $0
- Promotion: Trade commission-free for 60 days
- Low commissions and 30 commission-free trades per month with $25,000 cash balance. See our Merrill Edge review.
- Commission: $6.95 per trade
- Account minimum: $0
- Promotion: Up to $600 cash bonus
OptionsHouse is our top choice for stock trading, and with $4.95 trade commissions, it’s no surprise it shows up here as well. It’s a deep-discount broker that looks and feels like so much more, with a top-of-the-line trading platform, helpful customer service and a strong selection of high-quality research. (It’s worth noting, however, that the broker doesn’t offer any commission-free ETFs or no-transaction-fee mutual funds. If you’re looking for those, you’ll want to scroll to our final category below or check out our picks for the best online brokers for ETF investors.)
Merrill Edge charges a very reasonable $6.95 per trade and also excels with its research and customer service. But it earned this spot, at least in part, because of its ongoing free trade promotion for existing — not just new — customers: up to 30 commission-free trades per month for those who maintain a combined balance of $25,000 or more in their Bank of America deposit accounts or a combined $25,000 or more in cash in their Merrill Edge self-directed accounts. The company lacks commission-free ETFs, like OptionsHouse, but it does offer a large number of no-transaction-fee mutual funds.
Best brokers for completely free trading
Both of these services allow investors to trade stocks with no commission.
- Free trading app that’s perfect for beginners looking for a no-frills tool for buying stocks. See our Robinhood review.
- Commission: $0 per trade
- Account minimum: $0
- An easy way to bypass the middleman and invest as little as $10 directly in well-known stocks. See our Loyal3 review.
- Commission: $0 per trade
- Account minimum: $0
Yes, you heard us: Free. Both Robinhood and Loyal3 offer commission-free stock trading. So why didn’t they score the top spot on a list catering to cost-conscious investors? There are drawbacks to both services. Robinhood gives investors access to more than 5,000 stocks and ETFs, but it’s an app-only service that is pared down to the bare essentials; you won’t find any trading tools or research here, and the company currently offers only taxable accounts.
Loyal3 offers a much smaller selection of securities, with stocks from around 70 partner companies that offer direct investing programs. Again, you won’t get a trading platform or research here, but Loyal3 does offer access to IPOs for as little as $100 and fractional shares with a minimum $10 investment.
Best discount brokers for options traders
These brokers offer very low commissions on options trades.
- Offers significant discounts for high-volume traders. See our OptionsXpress review.
- Commission: $1.25 to $1.50 per contract for active traders
- Account minimum: $0
- Promotion: 50 commission-free trades
- Very low-cost options trades. See our eOption review.
- Commission: $3 + $0.15 per contract
- Account minimum: $500
OptionsXpress wouldn’t typically fit on this list, with $8.95 standard trading commissions (the same rate charged by parent company Charles Schwab). But the company is built for options traders. OptionsXpress charges no base and offers volume discounts to customers who trade options at least 35 times per quarter; those customers pay only a $12.95 minimum for one to 10 trades and $1.25 per contract for 11 or more. Customers who don’t meet that trade volume pay a $14.95 minimum for up to 10 trades and $1.50 per contract for 11 or more. OptionsXpress also offers an impressive lineup of strategy tools.
EOption caters to price-conscious options traders as well: Though the company doesn’t offer volume discounts, options are just $3 per trade and $0.15 per contract. Customers can opt into an auto-trading service that automatically executes trades from newsletter recommendations.
Best discount brokers for frequent traders
These companies offer low costs for traders who can avoid inactivity fees.
- Frequent traders benefit from volume discounts and one of the best trading platforms available. See our Interactive Brokers review.
- Commission: $0.005 per share; minimum $1 and maximum 0.5% of trade value
- Account minimum: $10,000 ($5,000 for IRAs)
- Special terms for younger traders: Lower minimum activity and balance requirements for clients 25 and younger
- Offers an impressive trading platform and depth of research paired with low commissions. See our TradeKing review.
- Commission: $4.95 per trade
- Account minimum: $0
- Promotion: NerdWallet exclusive offer: New accounts earn a $200 cash bonus
Overall top-choice OptionsHouse is a solid contender here too. But Interactive Brokers and TradeKing take top honors in this category because frequent traders likely won’t be penalized by the minimum activity imposed by these brokers. Interactive Brokers requires that accounts with balances under $100,000 meet a minimum of $10 a month in trade commissions; accounts with a balance of $2,000 or less must meet minimum monthly commissions of $20. But frequent, active traders who pass that hurdle will benefit from very low costs and per-share pricing.
TradeKing also has an inactivity fee, though it’s far less punishing: The broker charges a $50 annual inactivity fee to accounts with no executed trades in the last 12 months and a combined value of less than $2,500. Commissions are a very reasonable $4.95.
Best discount brokers for mutual funds, ETFs
These brokers offer a number of commission-free ETFs and no-transaction-fee mutual funds.
- One of the largest selections of commission-free ETFs, along with a number of no-transaction-fee mutual funds. See our Charles Schwab review.
- Commission: $8.95 per trade
- Account minimum: $1,000
- Promotion: 500 commission-free trades
- Offers a large selection of commission-free ETFs and no-transaction-fee mutual funds. See our TD Ameritrade review.
- Commission: $9.99 per trade
- Account minimum: $0
- Promotion: Up to $600 cash bonus
Many of the deep-discount brokers don’t offer access to commission-free ETFs or no-transaction-fee mutual funds, which can increase costs for investors who use these funds. If that’s you, you’ll want to look at Charles Schwab and TD Ameritrade. Although both of these brokers have trade commissions that fall on the high end of the discount broker scale ($8.95 and $9.99, respectively), they also offer a large selection of ETFs and mutual funds that can be purchased with no commission or transaction costs.
TD Ameritrade has more than 100 commission-free ETFs and more than 2,000 no-transaction-fee mutual funds; Charles Schwab offers more than 200 commission-free ETFs — one of the most impressive selections available — and more than 3,000 no-transaction-fee mutual funds. Charles Schwab has a $1,000 account minimum, but it is waived on most accounts with auto-deposits of at least $100 a month.
Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.
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