Rating stock brokerages

Investors nowadays have many options to choose from when it comes to brokerage firms. From small brokers to large, from new entrants to old dogs, traders can choose an investment company that fits their particular needs. In a very competitive market, brokerage firms must maximize profit in some areas while cutting fees in other areas to attract customers.

So who comes out on top in this competitive environment? TD Ameritrade is a well-known and heavily-advertised brokerage. The company is among the five biggest brokerages in the U. In late October , TD Ameritrade announced an agreement to acquire Scottrade. TD's purchase of Scottrade is expected to close in the second half of fiscal Meanwhile, both brokerage houses continue offering the highest possible brokerage services to their customers.

Unlike Scottrade, TD Ameritrade has no minimum opening deposit, which is a great way to explore the broker's trading platform before committing any money. TD Ameritrade offers the best in the industry intuitive Thinkorswim trading platform at no charge to all customers. New Investors can start with the website-based trading platform and switch to either of its two free advanced trading platforms as soon as their trading skills progress.

The majority of other brokers charge steep fees for their advanced trading tools. In exchange for a little bit higher than the industry average commissions, TD Ameritrade offers a wide spectrum of services that are either not offered by other firms or offered for a fee.

Free advanced trading tools, great customer support, personalized services at branches, a broad set of instruments, including great selections of mutual funds and one of the best selections of commission-free ETFs, and the safety and security of a large company make TD Ameritrade stand out among other investment companies on the list. TD Ameritrade was Barron's top online broker for long-term investors and novices.

Also, the brokerage ranked among the best online brokers for in-person service and for options traders thinkorswim platform. Ally Invest and Optionshouse are the other high-rated brokerage firms that do not require a minimum investment to open an account and provide an opportunity to explore their tools at no charge.

These companies offer the lowest commissions on stocks and options. Mutual fund commissions are also among the lowest among the largest discount brokers. Ally Invest gets top marks for a history of excellent customer service, and for its trading platform Ally Invest LIVE that is fully customizable and user friendly. While Ally Invest's platform is beginner friendly, Optionshouse's advanced trading platform is created for experienced traders.

My struggles and mistakes as a beginning investor that you could learn from. Optionshouse charges per options contract slightly less than Ally Invest though.

Other advantages of Optionshouse include no-fee IRAs, no inactivity fees, no account fees and a sophisticated mobile platform. On the other hand, Ally Invest offers special rates for active options traders and high net worth investors. Both companies are among the top five Barron's online brokers for options trading. Further down the list, there are three big-name companies which are offering services of both a traditional full-service brokerage house and a discount broker.

Rated four stars, these companies are Fidelity Investments, Charles Schwab and Etrade. Customers receive more personalized services and some features that are not available at other online discount brokers.

Buy-and-hold investors and those who prefer a more personalized approach will be satisfied. All three companies offer advanced trading platforms for active investors. However, unlike TD Ameritrade's thinkorswim, platforms come at a high price. The company allows investors to buy a basket of up to 30 stocks or ETFs in a particular sector for a low flat fee.

Motif Investing lacks a minimum funding level to open an account. The company offers intentionally straightforward and clear fees.

USAA Investments is next on the list. The brokerage offers good investment services, loyalty, integrity and honesty to the military members and the general public. The firm's fees are clear and straightforward. Self-Directed Investor Satisfaction Study, USAA Investments ranked higher than Scottrade, the No. However, it was not included in the final rankings.

According to the JDPower. TradeStation and Interactive Brokers are highly rated brokers for experienced and active traders. These companies offer the lowest per-share commissions, advanced trading platforms and access to international markets.

With their main focus on high-volume frequent traders, both brokers require high minimum deposits to open an account. TradeStation's direct-access trading platform is highly customizable and one of the best in the industry. Interactive Brokers was the cheapest online broker for occasional and frequent traders by Barron's estimate. Scottrade also offers its clients more than brick-and-mortar locations throughout the United States. A unique dividend reinvestment program called the Flexible Reinvestment Program FRP is another great advantage of the firm.

This requirement will not be a problem for traders who want to park a large deposit with the broker. Since being acquired by Charles Schwab, Optionsxpress has the backing of a large financial institution. At first glance, it is clear that Optionsxpress is not the cheapest for options trading. However, the brokerage has some advantages when it comes to options trading. The firm makes it easy to get the most out of online options trading experience with free comprehensive options trading education and a lot of powerful trading tools to help investors find, analyze and monitor their options investments.

Lightspeed Trading is a good fit for sophisticated traders. Fast execution speed is the major advantage of the web-based trading platform Lightspeed Trader. However, the platform has little to offer in terms of research. Merrill Edge offers flat-rate commissions, no minimum funding or balance requirements and no maintenance or inactivity fees for its brokerage or IRA accounts.

The broker offers mediocre services in comparison with the leading discount brokerages. However, current Bank of America customers might find Merrill Edge services very convenient. Combined with research tools, IRA accounts and a link to Capital One deposit accounts, this brokerage might be attractive for existing Capital One customers.

Everyone can find better options. Suretrader website is operated in compliance with the laws of the jurisdiction in which its office in the Bahamas is physically located.

The brokerage allows to day trade freely with 6: Suretrader is not a member of FINRA. Mutual fund investors would do better at Scottrade or Fidelity. Complaints from its customers regarding the website and customer service knock off 2 stars.

A steep quarterly inactivity fee is another drawback. Further down the list is Firstrade, earning 3 stars. This broker has 10 commission-free ETFs and free DRIPs.

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Marsco offers very low trading commissions. The firm's trading tools lack sophistication. Nowadays, there are better solid brokers on the market.

Another 3-star rating goes to Sogotrade. However, this low-cost brokerage has a history of customer service complaints. Its maximum rating at this time is only 3 stars.

SpeedTrader is focusing on active traders. Advanced trading platforms are offered for high fees. No research is offered. Trading Block is one of the companies that participated in the Barron's survey. Unfortunately, its rankings are very low in most categories. The company finished next to last. The well-known Vanguard comes in at just 3 stars.

Unfortunately, Vanguard has annual fees on its IRAs and has poor trading tools.

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Small investors with low account balances would do better at TD Ameritrade or Firstrade. WellsTrade offers a rather high commission, poor trading tools and some fees that are not charged by many other brokers. On the bright side, the brokerage offers good banking services. Investrade offers an average trading commission and fairly good trading platforms. Its annual IRA fees are another drawback.

There are companies with cheaper pricing on options for stocks. Rounding out the list, Just2trade and Low Trades are two affiliated firms controlled by the same parent, the Success Trade Securities, Inc. What can investors expect at the low end of the brokerage list? Recently, the self-regulatory securities organization FINRA issued a cease-and-desist order against Success Trade Securities, accusing the firm of fraudulent activities, which pretty much sum up the risks of doing business at the bottom of the heap.

Which brokerage is best is ultimately a subjective question. Firms with no minimum deposit requirement, such as Ally Invest and USAA Investments, would be a good choice for investors who have low capital to trade with. Investors who don't trade frequently should consider the higher ticket charges of TD Ameritrade or Etrade in exchange for their advanced tools.

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The old adage to "know yourself" is the first step in choosing the right broker. There are some good ones out there, but stay away from the worst-ranked. Only the largest discount online stock brokers are included in our list of top 10 brokerages Firms' star-ratings, trading commissions, and minimum initial deposits to open an account are also provided in the table.

Brokers are rated based on a 5-star rating system, with the highest score being 5 stars, and the lowest score - 1 star. We considered a variety of ranking factors, including broker's commissions, additional account fees annual, maintenance, and inactivity fees , customers reviews, investments offered, trading platforms, customer service, educational materials, and investment research.

We did not not include in this list full-service brokerage firms and wealth management companies. Please visit a list of top full-service brokerages for information about the traditional brokerage houses.

If you have experience positive or negative of investing with an online discount broker from the list above and you would like to share your opinion, please visit a company's review page to post your feedback, or leave your comment below. We do our best to maintain the most up-to-date information across all our pages.

If you see any inaccuracies in this article, please contact us through our Contact Us page. Best Brokers New Investors Best IRAs Brokers List. Best Rated Brokers 1. Ally Invest Review 2. TD Ameritrade Review 3.

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