Do you recall the days when you needed to call up a stock broker in order to make a stock trade?
And you needed to make the trade in a “round lot” (you had to buy 100 shares)?
Did I just date myself?
Thanks to the internet that’s no longer the case and it’s easy for anyone to invest in stocks with an online brokerage.
But where do you go to trade online?
You want a brokerage that’s easy to use, has cheap trading costs, and has tools to help you track your trades and the market in general.
So what are the best online discount brokerages for cheap trades?
Take a look below and see which one is best for you:
Best Online Discount Brokerages for Cheap Trades
TradeKing
With Trade King you are getting an online broker with $4.95 for stock trades, and this includes broker-assisted trades.
They were rated #1 in customer service in 2010 and 2011 by SmartMoney magazine while Barron’s gave TradeKing four stars five years in a row.
They offer a full suite of trading and research tools for you to use. You can also connect to their Trader Network where you can see what other traders are doing and why. There are no surprise fees or account minimums to worry about. When you refer a friend you both earn $50. Also, transfer your brokerage account to TradeKing from another brokerage and they will cover transfer fees up to $150.
See our review of TradeKing.
Visit TradeKing for more information and to sign up.
Capital One ShareBuilder
As the name implies, ShareBuilder is part of Capital One (ING DIRECT is part of Capital One now) so right off the bat you are getting the great customer service that Capital One offers.
Real-time trades are $9.95 for stocks and ETF’s. If you place Automatic Trades (trades that occur once a week automatically) then the cost is $4 per trade (a great way to invest automatically and grow your portfolio). With this option you can also purchase partial shares.
If you are looking to invest in no-load mutual funds, ShareBuilder offers over 250 funds that have no transaction fees. Other funds they offer are $19.95 per trade or $4 per automatic investment.
There is also a monthly Advantage Program which is $12/month which offers 12 free automatic investments per month and only $1 after; real-time trades at $7.95; and premium stock research not available to basic members.
All account holders have access to their free guidance and basic stock research tools. There are no account minimums, no investing minimums, and no inactivity fees.
Personally, I love that since ShareBuilder is part of Capital One I can transfer money from my Capital One 360 account to ShareBuilder instantly. There is also a mobile app for you to check your accounts and trade. Refer a friend and earn 10 free trade credits. If you transfer an account from another brokerage you can get a $100 bonus. See our review of ShareBuilder’s redesigned site.
Visit ShareBuilder for more information and to sign up.
Betterment
Betterment is a unique online discount brokerage.
See, you can really only invest in two funds – Stocks or Treasury Bonds, each made up with a basket of various ETF funds.
Betterment is for the beginning investor that wants to invest in the market without having to figure out where to start.
That’s why there are only two choices.
On top of the ease of choice, Betterment doesn’t have commission fees when you buy or sell. Instead you are charged an annual fee of up to 0.9% on your account balance. If you decide to add to your account every week you won’t be paying a commission each time (the same is true if you decide to take money out).
Your account is linked to a checking account to make adding money easy. This is great for those who want to grow a portfolio little by little. Betterment will also automatically rebalance your portfolio and re-invest any dividends your funds earn. This way your portfolio maintains the allocation of stocks and bonds you choose.
There are no minimum, transaction, or hidden fees. Betterment is an easy way for an investor to put money into thousands of companies at once. See our Betterment review for more details.
Betterment is running a promotion for a $25 bonus if you open up an account with at least $250.
Visit Betterment for more information and to sign up.
Scottrade
Scottrade started serving traders over 30 years ago and they offer customer support via email, online chat, phone, or in-person at one of over 500 branch locations (important if you feel you want to speak with someone face-to-face).
Stock trades at Scottrade are $7. You need a low initial deposit of $500 and there are no account maintenance fees or inactivity fees. In fact, there are also no account closing or transfer fees should you ever decide to move your investing elsewhere.
They offer a number of research tools as well as Scottrade Mobile, which allows you to trade from a mobile device. Scottrade also offers 15 zero-fee, low-expense ETF’s to choose from, allowing you to easily start building up an index portfolio.
Visit Scottrade for more information and to sign up.
TD Ameritrade
TD Ameritrade offer up a flat-fee commission of $9.99 on many of their online trades. You can trade stocks, ETF’s, mutual funds, options, Forex, and more.
They have been in business for over 35 years.
You have a number of tools at your disposal including their Trade Architect™, thinkorswim platform, and QuoteScope™. They offer over 100 commission-free ETF’s to choose from. There is also a robust knowledge center available to help you become a better investor.
Kiplinger’s rated TD Ameritrade the #1 online broker while Barron’s gave 4 1/2 stars for Long Term Investing and rated it Best for Options Traders.
TD Ameritrade had a current promotion where you can trade commission free for up to 60 days as well as get up to $600. See our TD Ameritrade review for more.
Visit TD Ameritrade for more information and to sign up.
E*Trade
E*Trade may be one of the best known online discount brokers in this list, what with their memorable Superbowl commercials and all. Cute commercials isn’t all you get though, you also get a well-respected and highly rated brokerage.
Stock trades are $9.99 or less (higher balances can net you a lower commission structure). Managing your money is made more efficient with access to E*Trade bank (checking and saving).
You have access to free investing education tools including 3-minute educational videos, live and on-demand web seminars, and more. Account holders also have access to independent research from likes of Reuters, S&P, and Morningstar. Use E*Trade’s mobile for research and trading on-the-go.
There are no account services fees.
SmartMoney gave E*Trade 5 stars for their trading tools; Kiplinger’s gave them 5 stars for customer service; and Barron’s gave 5 starts for Research Amenities, all three magazine ratings were in 2011.
E*Trade has a promotion going where you can get free trading for the first 60 of opening your account (you must the account with at least $2,000).
Visit E*Trade for more information and to sign up.
Conclusion
As you can see, it shouldn’t cost you an arm and a leg to start trading. There are clearly a number of great companies to choose from to get you on your way to investing.
These are some of the best online discount brokerages for cheap trades that I know of. If you have a favorite that isn’t listed let me know.
Which is your favorite online discount brokerage for cheap trades?
