Choosing the Best Online Brokerage Accounts

Choosing the best online brokers is no easy task. There’s so much variation in this industry from company to company, and then you have to factor in the type of trader or investor who’s opening the brokerage account.

Here’s how I got started:

• I conducted research to compile a list of every online broker.
• I narrowed the list down to just under 50 brokers by eliminating those that did not allow U.S. stock trading.
• I individually researched each broker, visited their websites, and analyzed rankings and reviews across the web.
• I concluded that there were 15 online stock brokers worth digging into.

My next step was to come up with measurable data to compare these brokers.

I had to be aware that comparing a full-service broker to a discount broker or options broker was going to be difficult. I didn’t want to penalize companies for specializing, but I also needed to reward the full-service firms for offering additional resources.

These were my next steps:

• I came up with 10 important categories of features to measure each company.
• Some of these features included costs and fees, access to investment products, research, education, trading technology, and financial resources.
• I compared each of the 15 online brokers across these features.

Once this comparison was complete, I was left with four of the best online brokers that excelled in specific areas. These four online brokerage firms cover the spectrum for anyone who would sign up for an investment account. I knew I could recommend one of them to a specific group of investors or traders.

Here are the final steps I took:

• I tested out each of the top four brokers (I actually tested several in the top 15) and simulated the trading experience.
• I analyzed the unmeasurable aspects of each broker that the data could not account for, like usability and functionality, and downloaded all the mobile apps.
• I looked for additional features unique to each online broker that I also did not capture in the data.

Investment Calculator

To help you determine what to expect from your investment, we’ve created this investment calculator. Simply enter your investment details and our calculator will let you know if your goals are achievable and if it’s not, how far you are from it.