The number of Americans investing in financial markets hit an all-time high of 162 million in 2024, according to a long-running Gallup survey. Many of today's investors focus on which stock, fund or other asset they should choose. But another consideration can also have a big impact on your returns: where you hold those assets.
At least 18 brokerages are vying to be the platform where you hold and trade your investments. Although most now let you trade stocks, exchange-traded funds (ETFs) and many mutual funds commission-free online, there are still significant differences among the brokerages that can affect your long-term results. For example, some brokerages pay almost no interest on so-called sweep accounts, which hold recent dividends or other money waiting to be invested, while others pay about 5%. Some brokerages charge just $1 to buy or sell each bond with a face value of $1,000, while others charge opaque "markups" that can exceed $13 per bond. (All data are as of May 31.)
You'll also find big variations in the services they offer. Some brokerages encourage newbies with lots of educational materials and the ability to buy fractions of expensive stocks. And some cater to day traders by providing sophisticated tools to analyze and trade derivative investments such as options. Some online brokerages provide almost no human assistance, while others will assign you dedicated advisers – for a hefty annual fee.
Craig Martin, executive managing director for wealth at consumer research firm J.D. Power, says these differences result from how brokerages decide to meet the challenges of two sometimes conflicting demands: They must find new ways to persuade you to pay for their services. But to win your business, they must also demonstrate that they are trustworthy stewards of your long-term financial health. After all, he says, investors are essentially saying, "I am giving you my life savings. Show me that you understand me and have my best interest at heart."
How we chose the best online brokers and trading platforms
To help you choose the brokerage that best understands and serves your needs at a reasonable price, we collected extensive data from nine fully comprehensive brokers and four smaller brokerage houses. The comprehensive brokers all offer online trading in stocks, ETFs, mutual funds and individual bonds. The less comprehensive group, which we summarize in our best small online brokers feature, offer fewer investment options, typically focusing on stocks and ETFs.
Because of continuing consolidation in the financial services industry, five of the comprehensive brokerages we surveyed are part of giant, well-known companies that offer broad financial services, including banking, bill-paying and investment services: Charles Schwab, E*Trade (now a division of Morgan Stanley), J.P. Morgan Self-Directed Investing (owned by JPMorgan Chase), Merrill Edge (owned by Bank of America) and WellsTrade (part of Wells Fargo). Fidelity does not own a bank, but it offers many bank-like services, such as cash-management accounts.
The three smaller but still comprehensive options are Ally Invest (a division of online-only Ally Bank), Firstrade and Interactive Brokers. Among the missing are three other comprehensive brokerages: Siebert, which didn't respond to our invitation, and T. Rowe Price and Vanguard, both of which declined to participate.
Officials at each participating brokerage answered dozens of questions in seven categories. The scores awarded in each category depend on information provided to us by the brokerages, vetted to the best of our abilities. To calculate our final score, we weighted the categories based on what we heard from the brokers about what their customers want and what we believe the majority of our readers value most. But each investor is unique.
To maintain consistency with past rankings, we adjusted our methodology only to address changes in the industry and consumer demand. So, just like last year, the robustness of the brokerage's investment choices, tools and mobile app were each given a weight of 20% of the overall score. Customer service responsiveness remained at 10%. And because most trading now is free, we continued to count costs at just 5%. Due to increasing customer demand for advisory services, we raised the weight for that category and pared the weight of the research category slightly; both are now weighted at 12.5%.
Best online broker overall
And the winner is … Fidelity tops our overall scoring again this year. It finished first for advisory services thanks to options such as Fidelity Go, which offers free automated advice to investors who have less than $25,000. Fidelity Go customers with bigger portfolios get access to human advisers for an annual fee of 0.35% of their assets. Fidelity was also a strong silver medalist in four other categories: fees, investment choices, tools and mobile app.
Interactive Brokers came in second this year thanks in part to a beefed-up mobile app and a research menu that put it at the top of both of those categories. Interactive also scored best for investment choices, as it offers broad access to mutual funds with no transaction fee and allows fractional purchases of nearly all U.S. stocks and exchange-traded funds.
Bronze medalist Schwab had the best menu of tools to help investors manage their portfolios and placed second in three other categories: advice, customer service and research.
E*Trade finished fourth, thanks to strong showings in advisory services, investment choices and research support. Merrill Edge was another high scorer thanks in part to its top score for customer service.
Online brokers with the best investment opportunities
The first question you'll have for any brokerage is whether you can trade the securities you want to invest in. So the scores in this category are generally based on the breadth of investing options. We surveyed each brokerage's number of ETFs, stocks, bonds, no-transaction-fee mutual funds and alternatives such as cryptocurrencies.
We gave points to brokerages that offer plenty of opportunities to buy fractions of stocks or ETFs, because that helps small investors dip their toes in the market. With investors now able to earn decent returns on cash, we decided to give more credit for generous interest rates on cash accounts. This year, we also awarded points for after-hours trading and helping investors earn money from lending securities.
The winner for this category, like last year, is Interactive Brokers, followed by Fidelity and E*Trade. Interactive offers the most quotes on corporate and municipal bonds, for example, and Interactive and Fidelity are the only two major brokerages that enable you to buy and sell cryptocurrencies.
Interactive and Fidelity also lead the pack in fractional share trading, offering investors the ability to buy fractions of virtually all U.S. stocks and ETFs (with possible exceptions for the smallest or most thinly traded). Most of the other brokerages have a limited number of stocks available for fractional trading. Two – Ally and Merrill – don't currently offer fractional stock shares. Interactive and Fidelity are the only ones in our survey that enable you to set up automatic regular purchases of stocks. They offer ETFs, as do E*Trade and several other brokers, but the other firms' menus tend to be more limited.
Mutual fund investors will find plenty of choices at Ally, E*Trade, Firstrade, Interactive and Schwab, all of which offer more than 4,000 mutual funds with no transaction fees.
Among the major brokers, Fidelity was the most generous with interest on uninvested cash, such as dividend payments or trade settlements, which are typically held in sweep accounts. Fidelity's default sweep account paid 4.97% at the time of our survey. For money market funds in general, WellsTrade and Merrill Edge lead the pack. Both paid a category-leading 5.34%. Fidelity came in a close third at 5.31%.
A growing number of brokerages are enabling investors to trade outside of the standard 9:30 am to 4:00 pm weekday stock market trading hours of the U.S. markets. E*Trade and Interactive offer 24-hour trading five days a week. Most of the others offer a few extra hours on weekday mornings and evenings. Only J.P. Morgan does not offer any additional trading hours.
With international markets picking up, investors might be interested to learn that Interactive offers direct access to markets in 34 countries and territories. The next-closest brokerage, Schwab, offers access to markets in 29 other countries. Most other brokerages are limited to U.S.-listed shares (which may include international stocks traded here as American depositary receipts).
Trailing in the investment choices category is Ally, which does not offer fractional trading, certificates of deposit (CDs), automated investing or much interest on cash accounts.
Online brokers With the best mobile apps
Several brokers told us that about half of their traffic and trades are coming through their mobile apps now. But because it's a challenge to squeeze a lot of information onto tiny screens, brokerage mobile apps can miss some important functionality. We collected data on app capabilities for more than 20 common tasks to learn which ones allow you to do the most on the go.
The winner for this category is Interactive Brokers, followed by Fidelity, J.P. Morgan and E*Trade. Interactive's app provides the most functionality by our count. It's the only one that enables bond trading, and it is one of five that let you pay bills from your account using the app. (The others are E*Trade, Fidelity, Merrill Edge and WellsTrade.)
E*Trade's app is notable for its mobile mutual fund screener (only J.P. Morgan's app offers similar functionality). E*Trade also offers a privacy mode to hide your balances in case you don't want your commuting seatmate to see how much money you have. Fidelity stands out for its mobile tools, such as spending trackers and alerts for proxy votes.
Lagging in this category are Ally, Firstrade, and WellsTrade, which lack functions such as enabling mobile users to trade CDs or to research or screen mutual funds.
Online brokers with the best tools
One way brokerages vie for your allegiance is with intuitive tools to help you come up with investing ideas and manage your money better. We awarded points to brokerages that have extensive screening tools and a selection of calculators to help you, say, analyze your risk tolerance or your budget. We also rewarded brokerages with tools to help you build ladders of bonds or certificates of deposit. And this year we added points for providing investing education materials, as well as tools that help you vote on corporate proxies or suggest ways to lower your tax bills on withdrawals.
In this category, Schwab came out on top, edging out Fidelity. Merrill Edge also scored well. All three offer many measures you can use to screen for stocks, funds or bonds, for example. Schwab leads the field with 134 screening factors for stocks. And all of the three offer preset screens for popular searches to help you quickly search for dividend-paying stocks, for example, or companies trading at discounts compared with their peers. Schwab and Fidelity offer plenty of investing education articles, videos and podcasts.
Fidelity has added many new options-trading tools and education materials recently. And Merrill Edge continues to bolster its user-friendly Idea Builder and Fund Story tools.
Interactive Brokers reported especially robust fund screeners, with a market-leading 275 factors for ETFs, as well as 133 factors for mutual funds. Interactive also offers dozens of tools for active traders. But it doesn't offer some more basic tools, such as a calculator for required minimum distributions from a retirement account, or a budgeting planner.
Ally and Firstrade trailed because they lack many popular tools, such as college-savings calculators and tools to help you analyze your allocations to different kinds of assets.
Best online brokers for advisory services
Investors want advice. The number of Americans who have signed up with investment advisers grew by nearly 2 million, to 54 million, in 2023, according to the Investment Adviser Association. Given lucrative fees that can reach 2% of assets, brokerages are competing to find new ways to provide that advice. For our rankings, we gave points for providing low-cost and wide-ranging investment advice services at each personalization level: a fully automated service, a human-computer hybrid model and a fully human option.
The automated or "robo" advice options use computer algorithms to analyze your risk tolerance and time horizon, then recommend and manage portfolios that are typically made up of exchange-traded funds. Because more brokers compete in the field of automated investing advice, we gave it more weight in the Advice category scores.
Only three firms – E*Trade, Fidelity and Schwab – offer all three levels of advice. Fidelity got the top overall score, followed by Schwab. Fidelity's fully automatic and hybrid services are standouts – reasonably priced with attractive features. Schwab scored especially well for its affordable hybrid and fully human advisory services. Firstrade placed last because it offers no advisory services.
Start with the robos. This year's top scorer in the fully automated advice subcategory was Interactive Brokers. Its Interactive Advisors service requires a minimum investment of just $100 and charges a below-average annual fee of 0.2% on a $25,000 portfolio. It gives you choices of 73 different portfolios made up of ETFs, which have an average expense ratio of 0.13%. You can choose, for example, a focus on technology, international stocks or companies that pay high dividends. (Interactive does not offer any hybrid or human advice options.)
Fidelity's lowest-cost robo option, Fidelity Go, came in a close second. You can start investing with as little as $10. And there is no fee until you build up $25,000 in your portfolio. Plus, you don't pay any additional fund management fees because Fidelity assembles portfolios from its zero-fee Fidelity Flex index mutual funds. You can choose among various risk profiles; a moderately conservative portfolio, for example, is half stock funds (35% in a U.S. stock fund, 15% in a foreign stock fund) and half bond funds of various maturities.
Of the four brokerages offering a hybrid service that allows investors some access to human advisers, Schwab Intelligent Portfolios Premium came out on top. It requires a minimum investment of $25,000, but it gives clients access to certified financial planners. Schwab charges a one-time planning fee of $300 and then $30 per month, so long-term customers with large portfolios pay a very small portion of their assets. Fidelity Go, which has a hybrid tier, was a close second among hybrid advisers. Once clients amass $25,000, they start paying an annual fee of 0.35% of their holdings and get unlimited phone access to Fidelity financial coaches and advisers, who may be licensed brokers, certified financial planners or other experts.
Five firms offer dedicated advisers for wealthier clients willing to pay for human handholding. E*Trade rose to the top of the full-service tier. The firm provides advisers through its parent company, Morgan Stanley. To get a dedicated adviser, you need a portfolio of at least $1 million, and you'll pay an annual management fee of up to 2% of your assets. But your adviser can help you build a well-diversified portfolio that includes all the standard choices plus commodities, real estate and other alternatives. In addition, you get access to estate planners, options trading coaches and other experts.
Ally, next behind E*Trade, has a low minimum required investment for a dedicated adviser: just $100,000. And it charges a comparatively low fee of 0.81% on a million-dollar portfolio. But Ally limits its portfolios to ETFs. Schwab offers the lowest-cost full-service advice program. For portfolios of at least $500,000, it charges an annual fee of 0.80%.
Best online brokers for research
It pays to do some research before you risk your hard-earned money on a stock, fund or other asset. Our ranking gives points to brokerages that provide easy access to a robust offering of high-quality investment research reports. We also give points to the five firms that present their clients with exclusive access to in-house expertise: E*Trade, J.P. Morgan, Merrill Edge, Schwab and WellsTrade.
Although it doesn't offer any proprietary research, Interactive Brokers nevertheless accumulated the highest overall score on our research measures because it offers reports on stocks and funds from many well-regarded organizations, such as Argus Investment Research, Ned Davis Research, Morningstar and Zacks Investment Research. It also offers technical or quantitative analysis from companies such as Stockcalc, Validea and ValuEngine. And it gives you access to research on foreign investments. Interactive also provides insights into the environmental, social and governance (ESG) aspects of companies and funds through reports by ISS and Morningstar.
Schwab and E*Trade received high overall scores, too. E*Trade offers customers access to reports by Argus, LSEG/Refinitiv, MarketEdge and TipRanks, among others. E*Trade clients also get access to Morgan Stanley's extensive proprietary research, such as analyst Erik Woodring's recent report on how Apple Intelligence, Apple's new artificial intelligence service, will likely force iPhone addicts to upgrade, raising profitability and boding well for stock price gains. And clients can tune into webinars featuring Morgan Stanley analysts discussing topics such as the outlook for the bond market.
Schwab gives clients access to independent research from Argus, CFRA, MarketEdge, Morningstar and Vickers Stock Research, which specializes in tracking the trading activity of corporate insiders. Schwab clients also get access to the company's proprietary reports, such as Chief Global Investment Strategist Jeff Kleintop's recent analysis showing how investors worried about the U.S. market's overweighting of tech stocks can diversify by investing in foreign markets, such as Australia, where the investment market is dominated by materials companies. Schwab provides ESG reports from MSCI as well.
The remaining firms generally offer a good mix of research reports. Merrill Edge has one unusual wrinkle: All customers get access to CFRA, Morningstar and some of the proprietary analyses from parent company Bank of America. But only those who have at least $100,000 in eligible accounts and are enrolled in Bank of America's Preferred Rewards program get access to all of BofA's analyst ratings, reports and alerts.
Ally offers the least access to research. It offers no ESG research, and the only stock research available is from TipRanks, which summarizes Wall Street analysts' ratings.
Best online brokers for customer service
Key to a good experience with a brokerage is getting client orders, questions and problems handled quickly. This year, we focused on measures of staffing and responsiveness. We give points for executing client orders quickly. And although artificial intelligence (AI) is making great progress, we still think customers are better served by experienced and knowledgeable humans, so we gave points to firms that make it fast and easy to connect with one by phone, via chat or face-to-face. We also gave points to brokerages with more experienced representatives.
Our analysis puts Merrill Edge at the top of this category because it offers more than 3,100 Bank of America branches staffed with a registered representative who can assist you with investing questions. Merrill says the average caller waits a below-average 26 seconds on hold. And Merrill is one of only four brokerages that has a fully human-powered online chat service. (The others are E*Trade, Interactive Brokers and Schwab.) Merrill says it completes orders in less than a hundredth of a second, giving it the fastest time – though to be fair, even its slowest competitor still completes trades quickly. Fidelity says it takes 0.14 of a second.
Schwab came in second for customer service. Though it has only 400 brick-and-mortar locations for customers, it boasts a market-leading 10-second average hold time for phone callers and a 2.4-hour response time for e-mailed queries.
For those who highly value the opportunity to meet a representative in person, J.P. Morgan leads the market in terms of the number of (Chase) bank branches with registered representatives.
Best online brokers for fees
Competition has driven the costs of trading stocks, ETFs and many mutual funds down to zero at major brokerages. To make up for that revenue, brokerages charge for special services. Some also direct trade orders to market makers who pay commissions for that stream of business, which means you may not always get the absolute best prices available on your trades. To help investors understand their all-in (and sometimes hidden) costs, we awarded points to firms that have low service fees and are transparent about their prices.
Because of growing interest in Treasury bonds and other kinds of fixed-income securities, this year we placed a little extra emphasis on the transparency and costs of bond trades. That dinged Ally and Interactive, which charge a fee for trading Treasuries. And it dinged Firstrade and WellsTrade, which reap commissions, often referred to as "markups," on trades of corporate bonds. We also gave points to firms that do not accept any payment for order flow (commissions from market makers). That gave a boost to Fidelity, J.P. Morgan, Merrill Edge and WellsTrade.
As a result, the overall cost winner this year is J.P. Morgan's Self-Directed Investing platform, followed by Fidelity and Merrill Edge. J.P. Morgan scored well in part because it doesn't accept commissions on bonds or for directing stock trades to specific market makers. And it charges moderate fees for services such as broker-assisted trades, which cost $25 each. (Those fees ranged from $19.95 at Firstrade to $100 at Interactive Brokers, which requires a 10,000-share minimum.) J.P. Morgan is also middle of the pack for bond-trading fees: $10 for a 10-bond order. And it's midrange for interest rates charged to investors who borrow to trade via a margin account, at 12.5%. (Interactive offered the best margin rate, 6.83%.)
Mutual fund fans might appreciate that E*Trade offers more than 4,000 funds without transaction fees. Firstrade has more than 5,000 mutual funds available with no transaction fee, and it charges no fees for trading options contracts.
Best online broker for your specific needs
If you want one-stop shopping: By banking with Merrill Edge parent Bank of America, you can easily transfer money between your checking and investment accounts or talk to a Merrill investment professional at any of more than 3,100 Bank of America branches nationwide. Once your combined balance passes six figures, you'll get perks including free ATM transactions and bonuses on BofA credit cards. And the annual fee for Merrill Guided Investing automated advice drops to 0.30% from 0.45%. Consolidators may also want to consider J.P. Morgan Self-Directed Investing, which is owned by JPMorgan Chase.
If you're an investing newbie: Fidelity's Fidelity Go robo advisory service will design and manage a low-cost portfolio for free, until you build up $25,000. Then it charges 0.35% of assets, but it gives you phone access to financial coaches. Fidelity also offers educational articles, videos and podcasts. Investors just building their portfolio will appreciate the ability to buy fractions of stocks or exchange-traded funds at Fidelity with as little as $1. For those who are okay with a more limited menu of investment choices, Robinhood, which is featured in our best small online broker feature, will match contributions to an IRA by 1%, or 3% if you pay $75 a year for "Gold" status. You must leave the funds at Robinhood for five years to keep the match.
If you're an options trader: You can't beat the prices at Firstrade or Robinhood. They are the only brokerages that charge no fees for options contracts.
If you're a bond investor: E*Trade offers the broadest menu of bonds and bond tools. It charges no fees for Treasury transactions, and it generally charges $1 per $1,000 face value of other bonds, with a minimum fee of $10. It also has the largest menu of new-issue corporate bonds. E*Trade is one of three brokers with an online tool to help you build a bond ladder (Fidelity and Schwab are the others). Traders on the go might prefer Interactive Brokers, the only firm offering bond trading on its mobile app. And it has the largest selection of municipal bonds and previously issued corporate IOUs.
If you're parking cash: Among the major brokerages, Fidelity pays the highest interest rate, recently 4.97%, on its default "sweep" account—the landing place for dividends and other cash waiting to be invested. If you're seeking decent returns on more-intentional cash allocations, Merrill Edge and WellsTrade offered as much as 5.34% on money market funds at the time of our survey.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
