Save money on your stock investments with the top 15 retail brokerage firms with zero trading fees.
Commissions have long been a source of revenue for retail brokers. When Charles Schwab decided to cut commissions to zero, other brokers followed. As the oldest and largest retail broker-dealer in the US, many of the other large retail firms have chosen to remove commissions.
This is great for both active traders and more passive investors. However, it’s important to remember that low commissions can sometimes mean less efficient pricing on transactions. A retail broker still has to make money, and getting a favorable price from customers for market making is one way for zero commission brokers to bring in revenue.
15 Stock Brokerage Firms with Zero Commission Fees
15. M1 Finance
M1 Finance is a retail broker focused on automated trading and a highly customizable trading interface. Additionally, they have financial advisor services available for investors who want to consult with a professional for managing their portfolio.
14. Axos Invest
Axos Invest is a platform for building automated trading strategies, and the broker also offers managed accounts for its clients. It is a great choice for beginners who want to pay low fees for a carefully and professionally diversified portfolio in equity markets.
13. Robinhood
Robinhood is likely the simplest and easiest to use of all the brokers in this zero commission list. Like many other zero commission brokers, Robinhood makes money by executing orders on favorable broker prices. This is a good option for beginner investors seeking discretion.
12. TradeStation
TradeStation is a broker that is focused on advanced and affluent traders who are active in market participation. It is designed to support algorithmic traders, automated traders, and financial analysts who use quantitative methods.
11. Ally Invest
Ally Invest is good for beginner investors as well as experienced traders and investors in stocks. It also offers access to markets beyond stocks as well as the option for an automated portfolio, and it has a featured web-based application for investing.
10. SoFi Invest
SoFi Invest is mostly geared towards beginner investors. It features an automated portfolio option for a hands-off approach to investing, and it has tools for more actively managed stock investors. This is a good choice if you are getting started with stock investing for the first time.
9. E*TRADE
E*TRADE is mostly targeted towards advanced activity investors and high-net-worth individuals. The investment platform features a very robust and detailed interface for developing strategies and applying financial expertise to markets.
8. JPMorgan Chase & Co
JPMorgan Chase & Co is the largest regulated bank in the US, and it offers a retail brokerage service for individuals who want to invest in the stock market. This is a good option for beginners who want a no-frills approach to stock market investing.
7. Merrill Edge
Merrill Edge is the retail brokerage arm of Bank of America, and it is mostly aimed at casual stock market investors. It includes advanced market research and tools to help new investors make the most of their capital in the stock market.
6. Tastyworks
Tastyworks is a retail broker platform that is designed for low-cost investing in options. This broker is aimed at new and experienced active investors who want to trade often and access the derivative market.
5. Interactive Brokers
Interactive Brokers was founded by Thomas Peterffy, an inventor who pioneered the use of computers in stock market investing. It is the best choice for advanced investors who want to use technology and algorithms to place automated trades.
4. TD Ameritrade
TD Ameritrade is a retail broker that offers the proprietary Thinkorswim trading platform for retail traders. This broker offers a very advanced trading platform and is especially suited for investors who seek to use derivatives like option stocks with zero commissions.
3. Fidelity
Fidelity has long been one of the top major retail brokers in the industry. It automatically sweeps cash into a money market account to grow interest while not actively invested, and it is designed to serve most individual stock market investors.
2. Vanguard
Vanguard is the best choice for low-cost investing, and the company is known to offer many of the most important products on the financial market. It is not designed for active traders, but it is a good choice for long-term investors who seek a simple interface.
1. Charles Schwab
Charles Schwab has long been the largest retail broker in the US, and it pioneered the model of zero commission retail investing. The platform offers research and education in stock markets, and it is a good general choice for most investors.
Which Is Right for Me?
Deciding on a retail broker can be difficult, and you can always transfer your investments to a new broker with an ACAT transfer. If your investment style changes or you want to try out new software, this transfer will allow you to switch brokers for little to no cost.
Factors to Consider When Choosing a Retail Broker
The most important factor for choosing a retail broker is your investment style. If you simply want to invest for retirement and make a handful of long-term stock investments, then a simpler retail broker geared towards basic stock investing is your best choice.
If you seek to become an active trader or investor in the stock market or other markets, then a retail broker that offers advanced features and a comprehensive software package will be preferable. This rules out many of the more basic long-term investment brokers.
Finally, the zero-commission model comes with a few drawbacks. Because the broker does not collect commission on each trade, they will execute your orders on prices that allow them to collect a profit. This means a wider range for buying and selling prices or a wider spread.
If getting a tight spread and filling your market orders at the best possible prices is important to you, then you may look beyond zero commission brokers. However, it has become standard practice, and most retail investors don’t require tight spreads and high-frequency trading.
Featured Image: Twenty20
