Guide to Brokerage Fees The Motley Fool

The online stock trading app Fidelity has no minimum balances or recurring fees. It offers commission-free stock and ETF trades with fractional shares available. You can invest in stocks, ETFs, options, mutual funds, bonds, CDs, and precious metals.

Volume-based discounts and a pro-level trading platform are enticing to many of these active traders. Interactive Brokers’ Trader Workstation (TWS) desktop platform offers Level II market data, advanced charting, technical analysis tools, scanners, alerts and Bloomberg TV streaming. Popular features among professional day traders, such as “hot keys,” are also available. Uncover the names of the select brokers that landed a spot on The Ascent’s shortlist for the best online stock brokers.

Fidelity can be a great choice for most investment needs, but it’s especially strong for investors with a long-term retirement focus. The combination of low fees and a focus on helping investors reach a successful retirement helped make it the top choice for retirement brokerage accounts. SoFi Active Investing’s $0 trading commission, fractional shares and $1 account minimum are attractive to new investors. More advanced investors will appreciate the company’s wide mutual fund selection and IPO access. Webull will appeal to the mobile-first generation of casual investors with its slick interface for desktop and mobile apps, but the brokerage also delivers an impressive array of tools for active traders. However, its relatively weak educational content may leave true beginners in the lurch, and it lacks access to a few common asset classes.

However, its constant 0.20% annual fee may appeal more to those with higher balances. A self-directed Vanguard brokerage account has a $0 minimum requirement with a 0% fee. Vanguard Digital Advisor requires a $3,000 minimum and charges a 0.20% fee.

The simple and easy-to-navigate platform shows kids the logos and companies they are familiar with in their investment portfolios. You can fund the account through a bank account or with stock gift cards. One SoFi login also gets you access to banking and lending services. Customers get free access to SoFi Relay, a personal finance data aggregator comparable to a lightweight version of Empower Personal Dashboard. Customers also get free access to career coaching and financial planning sessions. And, if you’re interested in continued learning around advanced trading strategies, be sure to research how well the broker supports its clients in helping them understand the risks of such strategies.

These group stocks by industry or other major categories to help you zero in on companies that make sense for your investment strategy. Public uses a commission-free pricing model so most users won’t pay any fees when they trade. Interactive Brokers has multiple pricing options depending on your level of trading activity and your personal trading needs. The basic account, IBKR Lite, gives you commission-free stock, ETF trades, and competitive fees for most other trades. Interactive Brokers is a top investment platform for all kinds of investors.

Most brokerage accounts on this list have no minimum balance or recurring monthly fees. After a major shift in pricing in 2019, most brokerage firms on this list also offer commission-free trades for stocks and ETFs. They also removed base fees for options trades but charged per-contract fees in most cases. You’ll also want to pay close attention to fees, but the brokers that made our list of the best options for stock trading don’t charge trading commissions on stocks or exchange-traded funds. Other fees may creep up — most commonly, brokers tend to charge fees to trade more complex investments like options, and there may be fees to transfer money out of your account. Most investors trade stocks and other investments through an online broker.

After having placed over 2,000 trades in his late teens and early 20s, he became one of the first in digital media to review online brokerages. Blain created the original scoring rubric for StockBrokers.com and oversees all testing and rating methodologies. Whether you are day trading, options trading or futures trading, I found Charles Schwab’s trading platform thinkorswim to be a winner in StockBrokers.com’s comparison testing. I prefer thinkorswim desktop for monitoring huge watch lists, charting, and watching streaming market news. Meanwhile, for casual investors, thinkorswim web gives traders an easy way to quickly manage their account while accessing essential trading features.

We opened accounts at each of the 20 brokers in our survey to perform hands-on, granular testing of their platform and services. However, because full-service brokers offer more services, they typically charge more. But if you don’t want to do your own investment research, full-service brokers can save you money, time and sweat. If you invest in a mutual fund or ETF, it will almost certainly have management fees, and these are known as the fund’s expense ratio.

SoFi’s self-directed “Active Investing” account has no fees for trading stocks and ETFs. You can buy fractional shares of stocks, which SoFi calls “Stock Bits.” SoFi also has a few of its exchange-traded funds that could be a fit for your portfolio. Active traders may want a little more out of their brokerage account. Some brokers offer highly customizable downloadable platforms with in-depth analysis tools, or access to additional research and data for an extra cost.

• Keep in mind that the fees may vary according to the type of industry and the broker involved.
• Betterment offers features that could be appealing to beginners, including an integrated high-yield savings account and the ability to invest in cryptocurrency portfolios.
• We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
• Hands-on investors are best served by the basic Schwab self-directed brokerage account, which gives you access to various investment choices.
• If you prefer to actively manage your own investment portfolio, an online brokerage account is essential.

No annual or inactivity fee; $50 for full transfer out of assets.

It alleges that the former Vanguard employee was wrongfully terminated after discovering billions of dollars worth of fraudulent tax behavior by Vanguard. David Danon, the employer, was fired less than a month after filing with the SEC. In 2023, a lawsuit was filed against Vanguard for supposedly mishandling target-date funds What is A Brokerage Fee and breaching fiduciary duty. Vanguard denies these allegations and is currently under investigation. In November 2023, Vanguard attempted to get the lawsuit tossed out by a federal judge. Although some of the plaintiff’s arguments against Vanguard were dismissed, the allegation of possible fiduciary breach will go to trial.

As you begin working with a broker, ask for a complete list of their fees, including context on when each fee may be charged. However, it’s just more than the initial capital that you put up. Most people don’t think beyond their initial investment or purchase price and completely forget about the fees involved.

Some brokers — especially those that are designed with frequent traders in mind — charge an inactivity fee if your account remains idle for too long. Before saving with a taxable account, consider the order of where you should save first to accomplish your financial goals best. Are you comfortable taking responsibility in making investment decisions? Taxable accounts can be a good vehicle if you can check all the boxes. Make it a point to contribute as frequently as you can, because that’s how wealth is built over time.