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Investing is one of the best ways to set aside money for retirement or to grow your wealth. To do so, you'll need to open an account through a brokerage or trading platform.
Luckily for the average investor, it's easier than ever before to buy and sell investments through online brokers — many even offer smartphone apps. Most notably, the trading platform Robinhood is known for offering zero-commission trades through its mobile app, drawing younger investors to put their hard-earned dollars into the stock market.
Given the growing popularity of Robinhood — it has over 13 million users, 3 million of them joining in the first quarter of 2020 — many brokerages have responded by lowering their fees, with several now offering zero-commission trades. Plus, these firms often don't mandate account minimums and offer free stock trading platforms, making investing even more affordable. Combined with robust educational resources, these online brokers allow savvy investors to mostly go about investing on their own.
When you see a brokerage offering no trading or commission fee, it doesn't mean there aren't any fees. You won't be charged for the brokerage executing the trade but the individual investments themselves may charge expense ratios or management fees.
To help you get started, Select reviewed over 12 online brokers that offer zero-commission trading. We narrowed down our list to the top six, focusing on the platforms with the widest range of investment options, user-friendly technology, quality customer support and educational resources. (See our methodology for more information). It's important to note that whatever investment avenue you choose, it's imperative you understand what you're getting into, including the potential for losses.
Here is our list of the best zero-commission trading platforms that may be a great fit for your investing needs.
$0 commission on stocks, options and ETFs
Includes stocks, bonds, mutual funds, ETFs, options, Forex, and futures
TD Ameritrade is a brokerage platform offering something for everyone — from hands-off investors looking for mutual funds to more active traders interested in options and futures. Investors can get a lot of value out of its features such as high quality research, trading tools and guidance on building an investment portfolio.
For investors who are only interested in the zero-commission mutual funds, you'll find that TD's thousands of choices are on par with what other established brokerages offer. For example, you'll find ETFs and mutual funds with relatively low expense ratios and investment minimums.
Both TD Ameritrade's website and mobile apps are secure and user-friendly — both offer the ability to execute trades, access educational tools and receive a managed portfolio recommendation. Customers can reach customer service via a 24/7 hotline, in-person branches, text and direct messaging online.
Fees may vary depending on the investment vehicle selected. Self-Directed Trading has zero commission fees for stock, ETF, options trades; $0.50 per options contract. Robo Portfolios have zero management fees
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for Self-Directed Trading. $100 minimum for Robo Portfolios
Stocks, bonds, ETFs, options, mutual funds, margin account and forex trading
Like TD Ameritrade, Ally Invest offers an intuitive trading platform and robust research tools, and there are no account minimums. This brokerage is great for both novice or experienced investors — though you won't have the ability to trade futures. As long as you invest in eligible U.S. securities, such as stocks and ETFs, you won't pay commissions. ETF options include ones from iShares and Vanguard, both known for their low expense ratios.
Customers can also choose from the self-directed portfolio or managed portfolio option. With managed portfolios, Ally Invest requires a $100 minimum, but it doesn't charge any advisory fees. The robo-advisor selects diversified and low-cost ETFs and automatically rebalances your portfolio based on your financial goals.
Investors have access to educational and research tools such as a probability calculator and option chains — novice investors may not find these useful. To contact customer service, investors can do so via email, live chat or phone.
$0 commissions for online stocks, ETFs, options, and some mutual funds
Stocks, bonds, mutual funds, ETFs, options, and futures
E*TRADE has offerings for beginner investors such as mutual funds and ETFs, both with no transaction fee or commissions. Its ETFs have low expense ratios (such as ones from Vanguard) and the mutual fund selection is huge. However, if you select one that isn't fee-free, you'll have to pay $19.99 for each transaction.
We also like the educational resources E*TRADE provides to all levels of investors. Beginner inventors will find the brokerage's webinars useful, with topics such as how to diversify a portfolio and building an income seeking strategy with ETFs. More advanced traders can get training on Power E*TRADE, the brokerage's more advanced platform, as well as access to tools such as the market dashboard and technical charts.
While the brokerage's apps (the standard and Power E*TRADE app) are fairly intuitive, the website may take a bit more time to wade through to find relevant information. It's not a major deal breaker considering all the other benefits. This includes excellent customer service support channels, including phone, email, live chat and in-person branches.
Stocks, bonds, ETFs, mutual funds, options, CDs
Vanguard is known for its low-cost investing options — Jack Bogle, founder of the brokerage, invented index funds. You won't pay any commissions for trading mutual funds, stocks and ETFs. The website and mobile app are fairly easy to navigate, though you may have to search to do simple actions such as executing transactions or searching for the educational tools.
It's fairly clear that Vanguard is aimed at investors who want to buy and hold funds long-term because it doesn't have many tools for those who are more active traders or interested in short-term trading. While it does provide investment advice, it's done through the robo-advisor service Digital Advisor and Vanguard Personal Advisor Services.
Perhaps the best reason to use Vanguard is the cost — expense ratios for the ETFs and mutual funds are some of the lowest around, with an average of 0.10%, much lower than the industry average. Aside from the annual fee (which is easily waived), investors can feel confident they are paying minimal fees.
$0 commission for stocks, bonds, ETFs and some mutual funds
Stocks, bonds, fractional shares, mutual funds, ETFs, options, futures, CDs
In addition to the low-cost options for ETFs and mutual funds, Charles Schwab stands out because it allows investors to purchase fractional shares of stock. With these types of investments, you can purchase a small portion of a stock instead of purchasing an entire share at the full price. You can purchase shares starting at $5 and are currently limited to ones from the S&P 500.
Otherwise, investors can select from no-transaction-fee mutual funds and ETFs, some of which are Schwab's own proprietary lineup. You'll find that many of the expense ratios are extremely competitive, some as low as 0.05%
As for the educational tools, novice investors can use Schwab's ETF Select List to determine which funds are best suited for their investment needs. Investors can also take advantage of the Personalized Portfolio Builder tool, which helps to create a diversified portfolio based on information provided around financial goals. Advanced investors can get access to tools such as research and earnings reports, plus real-time news from sources like Morningstar and Credit Suisse.
Much like other large brokerages, customers can contact Charles Schwab by live chat, phone, email and in person.
$0 for stocks, ETFs, options and some mutual funds
Stocks, bonds, fractional shares, ETFs, mutual funds, options
Fidelity is another strong contender in our list of the best zero-commission trading platforms. Both passive and active traders will find options tailored to their situation, though those interested in forex and futures trading will need to look elsewhere.
Customer service is also excellent — you can contact them by email, phone, live chat or meet with a representative at any of Fidelity's in-person locations.
Investors looking to build a portfolio with virtually no fees can do that at Fidelity since the brokerage has index funds that don't have expense ratios. These funds — the Fidelity Zero Total Market Index Fund, the Fidelity Zero International Index Fund, the Fidelity Zero Large Cap Index Fund and the Fidelity Zero Extended Market Index Fund — combined with no commission fees, are a great choice. The brokerage also offers plenty of low expense ratio choices and mutual funds with no transaction fees.
Advanced and more active traders will find that the research tools are more than sufficient from third-party providers such as Thomson Reuters, Ned Davis Research and Recognia. Investors can also utilize ETF, options and stock research tools. Most of these are available on Fidelity's app and website.
Zero-commission trading is when a broker doesn't charge their own fees for executing a trade. However, you may have to pay third-party fees such as mutual fund transaction fees and for options contracts.
Each brokerage platform will charge different fees when trading. Aside from commissions from the brokerage itself, investors should look at fees such as per contract fees (for options), brokerage assisted trades, management or advisory fees and transfer fees (when switching brokerages).
Investing in the stock market can offer large potential gains, earning you considerable wealth in the long run. However, the stock market rises and falls daily, leading to gains and losses in the value of your investment portfolio. Due to the inherent risks, most experts recommend diversifying your portfolio by investing in a wide range of index funds, stocks and bonds. You should try to avoid investing money you can't afford to lose, and financial professionals typically recommend considering investing as a long-term project rather than a quick way to make fast cash. If you feel uncomfortable investing on your own, you may want to consider hiring a fiduciary financial planner to help you through the process.
An expense ratio is a fee charged annually to investors which covers the administrative and operating expenses of exchange-traded funds (ETFs) or mutual funds. This cost is expressed as a percentage and taken out from the amount you've invested, which lowers the amount of returns you receive.
For example, if you purchase a fund with a 0.50% expense ratio, $5 for every $1,000 you've invested. The higher the expense ratio, the more investors will pay in fees and reduce potential returns on their investment. That's why it's important to find ETFs and mutual funds offering the lowest expense ratios, so you can feel confident you're not losing money to large fees.
A fiduciary financial advisor is someone who is legally bound to the needs of their clients ahead of their own. In other words, they can't offer you advice based on the commissions they could earn, especially if it's not best for your financial needs.
Before choosing a reputable fiduciary financial advisor, understand what you're looking for, whether that's retirement planning, a review of your investment strategy or someone to help you manage your investment portfolio. Do some research in the ways financial advisors charge for their services — typically, fee-only or commission-based — and what you feel most comfortable with.
When you start your search, you can ask your trusted friends and family members for recommendations. Other sources include searching through the National Association of Personal Financial Advisors and The Garrett Planning Network. Once you narrow your search, speak with each financial advisor to determine whether they'll be a good fit for what you're looking for.
To determine which $0 commission trading platform offers the best services for consumers, Select narrowed down offerings to a list of 10 initial platforms. We then analyzed and compared each one based on the following factors:
- Account minimums
- Account types
- Account and advisory fees
- Customer support
- Expense ratios of available investments
- Selection of investments
- Trading fees
- Available technology, including mobile platforms
- Educational tools and resources
After reviewing the above features, we based our recommendations on platforms offering the widest range of investment options, robust educational tools and resources, user-friendly technology, as well as the lowest fees and expense ratios. We also looked into each company's customer support structure, available avenues of communication and app reviews.
Note that with all trading platforms, there are no guarantees you'll earn a certain rate of return or current investment options will always be available. To determine the best approach for your specific investment goals, speaking with a reputable fiduciary investment advisor is recommended.