Choose the best discount broker in 2020 for citizens in the United States, we did the research for you. Fees, fees, and fees. We do not like them and surely you do not either. Checking carefully, we uncovered all the hidden fees. After testing 63 brokers, 5 made it to the top. And now, without further ado...
The top 5 picks for the best discount brokers for American citizens in 2020:
- Fidelity is the best discount broker in the United States in 2020. Low trading and non-trading fees, high fund fees.
- TD Ameritrade is the second. Low trading and non-trading fees, high fund fees.
- Interactive Brokers rounded out the top three. Low trading fees, average non-trading fee, free stock and ETF trading for US customers. Third place.
- Charles Schwab in the fourth place. Low trading and non-trading fees, high fund fees.
- E-Trade. Low trading and non-trading fees, high fund fees. Just made it to the list with being number five.
| Broker | Info | Fees score | |
|---|---|---|---|
| #1 | Fidelity | US stockbroker | 4.1 stars |
| #2 | TD Ameritrade | US-based stockbroker | 4.3 stars |
| #3 | Interactive Brokers | US discount broker | 4.3 stars |
| #4 | Charles Schwab | US discount broker | 4.4 stars |
| #5 | E-Trade | US stockbroker | 4.4 stars |
What makes a good discount broker? Certainly, damn low fees. This holds for commissions, financing rates, and a lot of people forget, non-trading fees like inactivity or withdrawal fees. Besides low fees, it also should offer access to a lot of markets and products.
Easy to list, but hard to figure it out. We are testing brokers along more than 100 criteria with real accounts and real money. We know what's up.
Not sure which broker? For a tailored recommendation, check out the broker finder tool. You can enter your country and it will show only the relevant brokers. Want more details? Compare brokers with this detailed comparison table.
And now, let's see the best discount brokers for American citizens in 2020 one by one, starting with the winner, Fidelity.
#1 Best discount broker
Fidelity
Fidelity is a US stockbroker, founded in 1946. It is regulated by top-tier regulators like the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Fidelity is considered safe because it has a long track record and is regulated by top-tier regulators.
Recommended for investors and traders looking for solid research and great trading platforms
| Pros | Cons |
|---|---|
| • Solid research tools | • Not fully digital account opening |
| • Great web trading platform | • High mutual fund fees |
| • US and international stocks | • Financing rates are high |
#1 Fidelity
Fees
Fidelity has low trading fees and low non-trading fees. There are no commissions for stock trading which is great. On the negative side, fees for some mutual funds and financing rates can be high.
| Pros | Cons |
|---|---|
| • Low non-trading fees | • High financing rate |
| • Free stock and ETF trading | • Higher fees for non-free mutual funds |
| • Some mutual funds are free |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| US stock | $0.0 | $0.0 | $1.0 | $0.0 | $0.0 |
| UK stock | $10.8 | - | $7.2 | - | - |
| EURUSD benchmark fee | - | $13.4 | $17.9 | - | - |
| Mutual fund | $37.5 | $50.0 | $15.0 | $24.8 | $20.0 |
| US Treasury bond | $0.0 | $0.0 | $5.0 | $0.0 | $0.0 |
| US stock index options | $6.5 | $6.5 | $6.5 | $6.5 | $6.5 |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Account fee | No | No | No | No | No |
| Inactivity fee | No | No | Yes | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#1 Fidelity
Account opening
Opening an account at Fidelity is easy and fast, but not fully digital. The application had to be mailed with the relevant ID's photocopy.
| Pros | Cons |
|---|---|
| • No minimum deposit | • Not fully digital |
| • Low minimum deposit | |
| • User-friendly |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Minimum deposit | $0 | $0 | $0 | $0 | $0 |
| Time to open account | 1-3 days | 1-3 days | 1-3 days | 1 day | >3 days |
#1 Fidelity
Deposit and withdrawal
Fidelity offers an exceptionally wide range of base currencies. Credit/debit cards are not accepted and the wire withdrawals are charged.
| Pros | Cons |
|---|---|
| • Free withdrawal | • Credit/Debit card not available |
| • No deposit fee | • $10 for outgoing wire transfers |
| • Several account base currencies |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Bank Transfer | Yes | Yes | Yes | Yes | Yes |
| Credit/Debit card | No | No | No | No | No |
| Electronic wallets | Yes | No | No | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#1 Fidelity
Markets and products
Fidelity offers a lot of asset classes, from stocks to options. There are international stocks too, not just US stocks. Forex and futures are missing.
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Stock | Yes | Yes | Yes | Yes | Yes |
| ETF | Yes | Yes | Yes | Yes | Yes |
| Forex | No | Yes | Yes | No | No |
| Fund | Yes | Yes | Yes | Yes | Yes |
| Bond | Yes | Yes | Yes | Yes | Yes |
| Options | Yes | Yes | Yes | Yes | Yes |
| Futures | No | Yes | Yes | Yes | Yes |
| CFD | No | No | Yes | No | No |
| Crypto | No | No | Yes | No | No |
#1 Fidelity
Web trading platform
Fidelity's web platform is easy to use, has a lot of order types, and provides a two-step authentication. On the negative side, the web trading platform is not customizable.
| Pros | Cons |
|---|---|
| • User-friendly | • Limited customizability (for charts, workspace) |
| • Clear fee report | |
| • Two-step (safer) login |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Web platform score | 4.5 stars | 4.3 stars | 4.3 stars | 4.2 stars | 4.0 stars |
| Mobile platform score | 4.5 stars | 4.8 stars | 3.5 stars | 4.2 stars | 4.5 stars |
| Desktop platform score | 3.8 stars | 4.5 stars | 3.0 stars | 4.0 stars | - |
#1 Fidelity
Verdict
Fidelity is one of the biggest US stockbrokers regulated by top-tier regulators.
Fidelity's research is outstanding and covers many tools, including trading ideas and detailed fundamental data. The web trading platform is easy to use and offers advanced order types. The product offer covers international stock exchanges besides the US market, not common among the US brokers.
Fidelity has some drawbacks though. The account is not fully digital, fees for mutual funds are quite high, also financing rate.
As the research tools are great, the web trading platform is user-friendly, and no inactivity fee is charged, feel free to try Fidelity.
| Fidelity | |
|---|---|
| Summary | Fidelity is a US stockbroker. It is regulated by top-tier authorities the SEC and FINRA. |
| Fees score | 4.1 stars |
| Recommended for | Investors and traders looking for solid research and great trading platforms |
#2 Best discount broker
TD Ameritrade
TD Ameritrade was founded in 1978 and it is one of the biggest US-based stockbrokers. It is regulated by top-tier regulators like the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission (CFTC).
TD Ameritrade is considered a safe broker since it has a long track record, is listed on a stock exchange, has a banking background, discloses its financials, and is regulated by top-tier regulators.
Recommended for investors and traders looking for solid research and a well-equipped desktop trading platform
| Pros | Cons |
|---|---|
| • Low trading fees (free stock and ETF trading) | • You can trade only in the US markets |
| • Superb desktop trading platform | • Slow and not fully digital account opening |
| • Great customer support | • No credit/debit cards and electronic wallets for money transfer |
#2 TD Ameritrade
Fees
TD Ameritrade provides free stock and ETF trading. The forex, bond, and options fees are low as well. On the other hand, they charge high fees for mutual funds.
| Pros | Cons |
|---|---|
| • Low trading fees | • High fund fees |
| • Low non-trading fees | |
| • Free stocks and ETFs |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| US stock | $0.0 | $0.0 | $1.0 | $0.0 | $0.0 |
| UK stock | $10.8 | - | $7.2 | - | - |
| EURUSD benchmark fee | - | $13.4 | $17.9 | - | - |
| Mutual fund | $37.5 | $50.0 | $15.0 | $24.8 | $20.0 |
| US Treasury bond | $0.0 | $0.0 | $5.0 | $0.0 | $0.0 |
| US stock index options | $6.5 | $6.5 | $6.5 | $6.5 | $6.5 |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Account fee | No | No | No | No | No |
| Inactivity fee | No | No | Yes | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#2 TD Ameritrade
Account opening
As a new client, you can change from many different account types at TD Ameritrade and as US citizen you will face no minimum deposit. Unfortunately, the process is not fully digital.
| Pros | Cons |
|---|---|
| • No minimum deposit | • Not fully digital |
| • Many account types |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Minimum deposit | $0 | $0 | $0 | $0 | $0 |
| Time to open account | 1-3 days | 1-3 days | 1-3 days | 1 day | >3 days |
#2 TD Ameritrade
Deposit and withdrawal
TD Ameritrade has user-friendly account funding and charges no deposit fees, but are several drawbacks as well. You can use only bank transfer and a high fee is charged for wire transfer withdrawals.
| Pros | Cons |
|---|---|
| • No deposit fee | • Credit/Debit card not available |
| • User-friendly | • High withdrawal fee for wire transfers |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Bank Transfer | Yes | Yes | Yes | Yes | Yes |
| Credit/Debit card | No | No | No | No | No |
| Electronic wallets | Yes | No | No | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#2 TD Ameritrade
Markets and products
At TD Ameritrade you can trade with a lot of asset classes, from stocks to futures and forex. We also liked the additional features like social trading and the robo-advisory service. On the other hand, the offered products cover only the U.S. market.
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Stock | Yes | Yes | Yes | Yes | Yes |
| ETF | Yes | Yes | Yes | Yes | Yes |
| Forex | No | Yes | Yes | No | No |
| Fund | Yes | Yes | Yes | Yes | Yes |
| Bond | Yes | Yes | Yes | Yes | Yes |
| Options | Yes | Yes | Yes | Yes | Yes |
| Futures | No | Yes | Yes | Yes | Yes |
| CFD | No | No | Yes | No | No |
| Crypto | No | No | Yes | No | No |
#2 TD Ameritrade
Web trading platform
TD Ameritrade offers a good web-based trading platform with a clean design. On the flip side, there is no two-step login and the platform is not customizable.
| Pros | Cons |
|---|---|
| • User-friendly | • No two-step (safer) login |
| • Clear fee report | • Limited customizability (for charts, workspace) |
| • Good variety of order types |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Web platform score | 4.5 stars | 4.3 stars | 4.3 stars | 4.2 stars | 4.0 stars |
| Mobile platform score | 4.5 stars | 4.8 stars | 3.5 stars | 4.2 stars | 4.5 stars |
| Desktop platform score | 3.8 stars | 4.5 stars | 3.0 stars | 4.0 stars | - |
#2 TD Ameritrade
Verdict
TD Ameritrade is one of the biggest US online brokers. Reflecting the wave of introducing commission-free trading at the end of 2019, TD Ameritrade now charges no commission of stock and ETF trades.
Research and education are outstanding and covers a lot of tools. The Thinkorswim desktop trading platform is one of the best on the market. The customer service is great, you will get relevant answers within a short time.
It has some drawbacks though. It charges high financing (margin) rates and it doesn't provide credit/debit cards and electronic wallets for money transfers. Furthermore, the product portfolio covers products only from U.S. markets.
As there are great education tools including a demo account, feel free to try it.
| TD Ameritrade | |
|---|---|
| Summary | TD Ameritrade is a US stockbroker, regulated by top-tier authorities the SEC and FINRA. The company is listed on NASDAQ and has a banking background as part of the TD Group. |
| Fees score | 4.3 stars |
| Recommended for | Investors and traders looking for solid research and a well-equipped desktop trading platform |
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#3 Best discount broker
Interactive Brokers
Interactive Brokers was founded in 1978 and is one of the biggest US-based discount brokers. The broker is regulated by several financial authorities globally, including top-tier ones like the UK's Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC).
As it has licenses from multiple top-tier regulators, the broker is considered safe. Also, having a long track record and publicly disclosed financials while being listed on a stock exchange are also great signs for its safety.
Recommended for traders looking for low fees and a professional trading environment
| Pros | Cons |
|---|---|
| • Wide range of products | • Extremely complex desktop trading platform |
| • Many great research tools | • Complicated account opening process |
| • Regulated by several authorities | • High inactivity fee |
#3 Interactive Brokers
Fees
Interactive Brokers has low trading fees and for US clients, stock and ETF trading is free. On the negative side, there is a high inactivity fee for non-US clients.
| Pros | Cons |
|---|---|
| • Low trading fees | • Inactivity fee |
| • Low stock and ETF fees | |
| • Low financing rate | |
| • Free stock and ETF trading for US clients |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| US stock | $0.0 | $0.0 | $1.0 | $0.0 | $0.0 |
| UK stock | $10.8 | - | $7.2 | - | - |
| EURUSD benchmark fee | - | $13.4 | $17.9 | - | - |
| Mutual fund | $37.5 | $50.0 | $15.0 | $24.8 | $20.0 |
| US Treasury bond | $0.0 | $0.0 | $5.0 | $0.0 | $0.0 |
| US stock index options | $6.5 | $6.5 | $6.5 | $6.5 | $6.5 |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Account fee | No | No | No | No | No |
| Inactivity fee | No | No | Yes | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#3 Interactive Brokers
Account opening
IB's account opening process is fully digital and the required minimum deposit is low. On the negative side, the online registration is complicated and account verification takes around 2 business days.
| Pros | Cons |
|---|---|
| • Fully digital | • Not user-friendly |
| • No minimum deposit for most accounts types | • Confusing messages throughout the process |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Minimum deposit | $0 | $0 | $0 | $0 | $0 |
| Time to open account | 1-3 days | 1-3 days | 1-3 days | 1 day | >3 days |
#3 Interactive Brokers
Deposit and withdrawal
Interactive Brokers offers many account base currency options and one free withdrawal per month. The main drawbacks are that you can only use bank transfer and the process is not user-friendly.
| Pros | Cons |
|---|---|
| • No deposit fee | • Credit/Debit card not available |
| • Several account base currencies | • Not user-friendly |
| • First withdrawal each month free |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Bank Transfer | Yes | Yes | Yes | Yes | Yes |
| Credit/Debit card | No | No | No | No | No |
| Electronic wallets | Yes | No | No | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#3 Interactive Brokers
Markets and products
Through Interactive Brokers you can access an extremely wide range of markets, with every product type available.
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Stock | Yes | Yes | Yes | Yes | Yes |
| ETF | Yes | Yes | Yes | Yes | Yes |
| Forex | No | Yes | Yes | No | No |
| Fund | Yes | Yes | Yes | Yes | Yes |
| Bond | Yes | Yes | Yes | Yes | Yes |
| Options | Yes | Yes | Yes | Yes | Yes |
| Futures | No | Yes | Yes | Yes | Yes |
| CFD | No | No | Yes | No | No |
| Crypto | No | No | Yes | No | No |
#3 Interactive Brokers
Web trading platform
Interactive Brokers's web platform is simple and easy to use even for beginners. On the negative side, it is not customizable.
| Pros | Cons |
|---|---|
| • User-friendly | • Limited customizability (for charts, workspace) |
| • Clear fee report | |
| • Two-step (safer) login |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Web platform score | 4.5 stars | 4.3 stars | 4.3 stars | 4.2 stars | 4.0 stars |
| Mobile platform score | 4.5 stars | 4.8 stars | 3.5 stars | 4.2 stars | 4.5 stars |
| Desktop platform score | 3.8 stars | 4.5 stars | 3.0 stars | 4.0 stars | - |
#3 Interactive Brokers
Verdict
Interactive Brokers is one of the biggest US-based discount brokers, regulated by several top-tier regulators globally. We recommend this broker for advanced traders.
On the plus side, IB has a vast range of markets and products available, with diverse research tools and low costs.
There are some drawbacks though: there is a high inactivity fee and the account opening process is complicated. The desktop platform is complex and hard-to-understand, especially for beginners.
If you have experience navigating complex platforms and you like transparent low-cost trading, Interactive Brokers could be a great fit for you.
| Interactive Brokers | |
|---|---|
| Summary | Interactive Brokers is a US discount broker. It is listed on a stock exchange and regulated by several authorities, including top-tier ones like the FCA and the SEC. |
| Fees score | 4.3 stars |
| Recommended for | Traders looking for low fees and a professional trading environment |
#4 Best discount broker
Charles Schwab
Charles Schwab was founded in 1971 and it is a US discount broker listed on the New York Stock Exchange.
It is regulated by several top-tier financial authorities, such as the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Financial Conduct Authority (FCA).
Recommended for investors and traders looking for solid research, low fees and great customer service
| Pros | Cons |
|---|---|
| • Free stock and ETF trading | • High fees for some mutual funds |
| • Outstanding research | • Product selection covers only the US market |
| • Great customer service | • Not well-structured educational platform |
#4 Charles Schwab
Fees
Charles Schwab offers free stock and ETF trading, while some mutual funds and bonds are also free. Non-trading fees are also low. On the negative side, the fees for some mutual funds are quite high.
| Pros | Cons |
|---|---|
| • Low non-trading fees | • High fees for non-free mutual funds |
| • Free stock and ETF trading | |
| • Some mutual funds and bonds are free |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| US stock | $0.0 | $0.0 | $1.0 | $0.0 | $0.0 |
| UK stock | $10.8 | - | $7.2 | - | - |
| EURUSD benchmark fee | - | $13.4 | $17.9 | - | - |
| Mutual fund | $37.5 | $50.0 | $15.0 | $24.8 | $20.0 |
| US Treasury bond | $0.0 | $0.0 | $5.0 | $0.0 | $0.0 |
| US stock index options | $6.5 | $6.5 | $6.5 | $6.5 | $6.5 |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Account fee | No | No | No | No | No |
| Inactivity fee | No | No | Yes | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#4 Charles Schwab
Account opening
Opening an account at Charles Schwab is easy, fast and fully digital. For US-clients there is no minimum deposit. If you open an account outside the US, there is a $25,000 minimum deposit.
| Pros | Cons |
|---|---|
| • Fast | • For non-US clients $25,000 minimum deposit |
| • Fully digital | |
| • No minimum deposit |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Minimum deposit | $0 | $0 | $0 | $0 | $0 |
| Time to open account | 1-3 days | 1-3 days | 1-3 days | 1 day | >3 days |
#4 Charles Schwab
Deposit and withdrawal
Transferring money is easy and user-friendly at Charles Schwab and there is no deposit fee. On the flip side, you can only use bank transfer and a high fee is charged for wire transfer withdrawals.
| Pros | Cons |
|---|---|
| • No deposit fee | • High fee for wire (bank transfer) withdrawals |
| • User-friendly |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Bank Transfer | Yes | Yes | Yes | Yes | Yes |
| Credit/Debit card | No | No | No | No | No |
| Electronic wallets | Yes | No | No | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#4 Charles Schwab
Markets and products
At Charles Schwab, you can trade with a lot of asset classes, from stocks to futures. Unfortunately, the product portfolio covers only US exchanges.
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Stock | Yes | Yes | Yes | Yes | Yes |
| ETF | Yes | Yes | Yes | Yes | Yes |
| Forex | No | Yes | Yes | No | No |
| Fund | Yes | Yes | Yes | Yes | Yes |
| Bond | Yes | Yes | Yes | Yes | Yes |
| Options | Yes | Yes | Yes | Yes | Yes |
| Futures | No | Yes | Yes | Yes | Yes |
| CFD | No | No | Yes | No | No |
| Crypto | No | No | Yes | No | No |
#4 Charles Schwab
Web trading platform
Charles Schwab offers a good web-based trading platform with a clean design. On the flip side, the platform is not customizable.
| Pros | Cons |
|---|---|
| • User-friendly | • Limited customizability (for charts, workspace) |
| • Clear fee report | |
| • Price alerts |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Web platform score | 4.5 stars | 4.3 stars | 4.3 stars | 4.2 stars | 4.0 stars |
| Mobile platform score | 4.5 stars | 4.8 stars | 3.5 stars | 4.2 stars | 4.5 stars |
| Desktop platform score | 3.8 stars | 4.5 stars | 3.0 stars | 4.0 stars | - |
#4 Charles Schwab
Verdict
Charles Schwab is one of the biggest discount US brokers regulated by top-tier regulators.
Reflecting the wave of introducing commission-free trading at the end of 2019, Charles Schwab charges no commission for stock and ETF trades. Its research is outstanding and covers many tools, including trading ideas and detailed fundamental data. The customer service is great, you will get relevant answers within a short time.
It has some drawbacks though. It charges high fees for some mutual funds and the product portfolio covers only US markets. Lastly, the educational platform is not well-structured.
As the trading and non-trading fees are generally low, research tools are great and the account opening is seamless, feel free to try it.
| Charles Schwab | |
|---|---|
| Summary | Charles Schwab is a US discount broker, regulated by top-tier US authorities the SEC and FINRA. The company is listed on the New York Stock Exchange and holds a banking license. |
| Fees score | 4.4 stars |
| Recommended for | Investors and traders looking for solid research, low fees and great customer service |
#5 Best discount broker
E-Trade
E-Trade is a US-based stockbroker founded in 1982. It is regulated by top-tier regulators like the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
E-Trade is considered safe because it has a long track record, is listed on a stock exchange, has a banking background, discloses its financials and is regulated by top-tier, US regulators.
In February 2020, E-trade was acquired by Morgan Stanley. In case you are curious, we have written an article about this in which you can find the reasons behind the acquisition.
Recommended for investors and traders looking for solid research and a great mobile trading platform
| Pros | Cons |
|---|---|
| • Low trading fees (free stock and ETF trading) | • Only US markets covered |
| • User-friendly mobile trading platform | • Slow account verification |
| • Great research tools | • No forex |
#5 E-Trade
Fees
E-Trade offers free stock, ETF trading. Some mutual funds and bonds are also free. The non-trading fees are low. On the negative side, the fees for non-free mutual funds are high.
| Pros | Cons |
|---|---|
| • Low non-trading fees | • Higher fees for non-free mutual funds |
| • Free stock and ETF trading | |
| • Some mutual funds and bonds are free |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| US stock | $0.0 | $0.0 | $1.0 | $0.0 | $0.0 |
| UK stock | $10.8 | - | $7.2 | - | - |
| EURUSD benchmark fee | - | $13.4 | $17.9 | - | - |
| Mutual fund | $37.5 | $50.0 | $15.0 | $24.8 | $20.0 |
| US Treasury bond | $0.0 | $0.0 | $5.0 | $0.0 | $0.0 |
| US stock index options | $6.5 | $6.5 | $6.5 | $6.5 | $6.5 |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Account fee | No | No | No | No | No |
| Inactivity fee | No | No | Yes | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#5 E-Trade
Account opening
The account opening is fully digital and user-friendly for US clients. On the flip side, the account verification process was slow.
| Pros | Cons |
|---|---|
| • Fully digital | • Slow |
| • User-friendly |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Minimum deposit | $0 | $0 | $0 | $0 | $0 |
| Time to open account | 1-3 days | 1-3 days | 1-3 days | 1 day | >3 days |
#5 E-Trade
Deposit and withdrawal
E-Trade charges no deposit fees and transferring money is user-friendly. On the flip side, you can only use bank transfer and a high fee is charged for wire transfer withdrawals.
| Pros | Cons |
|---|---|
| • No deposit fee | • Credit/Debit card not available |
| • User-friendly | • $25 fee for wire transfer withdrawal |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Bank Transfer | Yes | Yes | Yes | Yes | Yes |
| Credit/Debit card | No | No | No | No | No |
| Electronic wallets | Yes | No | No | No | No |
| Withdrawal fee | $0 | $0 | $0 | $0 | $0 |
#5 E-Trade
Markets and products
At E-Trade, you can trade with a lot of asset classes, from stocks to futures. On the other hand, there is US market only and you can't trade with forex.
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Stock | Yes | Yes | Yes | Yes | Yes |
| ETF | Yes | Yes | Yes | Yes | Yes |
| Forex | No | Yes | Yes | No | No |
| Fund | Yes | Yes | Yes | Yes | Yes |
| Bond | Yes | Yes | Yes | Yes | Yes |
| Options | Yes | Yes | Yes | Yes | Yes |
| Futures | No | Yes | Yes | Yes | Yes |
| CFD | No | No | Yes | No | No |
| Crypto | No | No | Yes | No | No |
#5 E-Trade
Web trading platform
E-Trade has a great web-based user-friendly trading platform with a clear fee report. On the negative side, there is no two-step login and cannot be customized.
| Pros | Cons |
|---|---|
| • User-friendly | • No two-step (safer) login |
| • Clear fee report | • Limited customizability (for charts, workspace) |
| • Good search function |
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Web platform score | 4.5 stars | 4.3 stars | 4.3 stars | 4.2 stars | 4.0 stars |
| Mobile platform score | 4.5 stars | 4.8 stars | 3.5 stars | 4.2 stars | 4.5 stars |
| Desktop platform score | 3.8 stars | 4.5 stars | 3.0 stars | 4.0 stars | - |
#5 E-Trade
Verdict
E-Trade is one of the biggest US stockbrokers regulated by top-tier regulators.
At the end of 2019, riding the commission-free trading trend in the USA E-Trade introduced zero commission on stock and ETF trades. E-Trade's research functions are high-quality and channel a lot of tools, including trading ideas, and strategy builders as well. We liked the easy handling and the personalizable features of the mobile trading platform.
It has some drawbacks though. E-Trade doesn't provide credit/debit cards and electronic wallets for money transfers and the product portfolio covers only US markets. In addition, the account verification process is slow.
As the trading fees are generally low, the research tools are great and no inactivity fee is charged, feel free to try E-Trade.
| E-Trade | |
|---|---|
| Summary | E-Trade is a US stockbroker, regulated by top-tier authorities the SEC and FINRA. The company is listed on NASDAQ and has a banking background. |
| Fees score | 4.4 stars |
| Recommended for | Investors and traders looking for solid research and a great mobile trading platform |
Best discount brokers
What makes a good discount broker?
Now you know the top three discount brokers. You are probably curious about how we came up with this list. Let's go over three points:
- What is a discount broker?
- Why do we think these brokers are safe?
- What are the most important factors when selecting the best discount brokers?
What is a discount broker?
A discount broker is a brokerage company that executes your buy and sell orders at a low trading fee. Discount brokers' fees can be lower since they don't provide extra services like research, personal investment advice, tax planning or robo-advisory as the full-service brokers.
Discount brokers were appearing with the internet and the online broker services. Brokerage companies started to provide their service online and fully automatized. This was the rise of online trading platforms. An online trading platform is basically a website, where you can insert your own orders and you get only a customer support, no investment advice.
The distance between the full-service brokers and discount brokers has been narrowing in the last years. Discount brokers started to provide extra services as well, like research, while full-service brokers started to lower their fees. The full brokerage and wealth management industry is under fee pressure thanks to the more and more cost-effective online broker companies.
Nowadays, the new discount brokers are the free-trade brokers. These provide commission-free trading and charge an extra fee for ancillary services, like after hour trading. The biggest free-trade online broker in the US is Robinhood. In the UK, Freetrade launched its trading app in 2018. Stay tuned, we will come out with the Freetrade broker reviews soon.
Are these brokers safe?
You can be sure none of them is a scam. They are regulated by at least one top-tier regulator.
However, also brokerage companies can go down. Remember Lehman Brothers? In these cases, it is important to know what happens with your securities and cash. These are usually held in segregated accounts, so even in case of a broker bankruptcy, you are safe.
If everything goes very bad and for example, the broker steals your assets, then you have a last resort, the compensation fund of the country where the broker is regulated.
How did BrokerChooser pick the best discount brokers?
At BrokerChooser, we test online brokers along more than 100 criteria, with a real account and real money. When we selected the best discount brokers, the primary selection criteria were fees.
We made the rank based on the trading fees of all asset classes, such as stock fees, and the fees not related to trading, like the withdrawal fees. We also scored positively if the broker provides a wide range of asset classes, because providing low fees in more than one asset class is not an easy job.
Best discount brokers
Bottom line
You saw the details, now let's zoom out. Here are best discount brokers in 2020 for citizens in the United States:
| Fidelity | TD Ameritrade | Interactive Brokers | Charles Schwab | E-Trade | |
|---|---|---|---|---|---|
| Fees score | 4.1 stars | 4.3 stars | 4.3 stars | 4.4 stars | 4.4 stars |
| Account opening score | 2.9 stars | 2.9 stars | 3.4 stars | 4.5 stars | 3.8 stars |
| Deposit and withdrawal score | 3.6 stars | 2.2 stars | 2.5 stars | 2.2 stars | 2.2 stars |
| Markets and products score | 3.9 stars | 3.9 stars | 5.0 stars | 3.3 stars | 3.0 stars |
| Web platform score | 4.5 stars | 4.3 stars | 4.3 stars | 4.2 stars | 4.0 stars |
| Visit broker | Visit broker | Visit broker | Visit broker | Visit broker |
Fidelity is our winner, the best discount broker in the United States in 2020. Low trading and non-trading fees, high fund fees.
All brokers are considered a great choice. Pick the winner, or any runner-up and save a lot of money on fees. Let us know what you think in the comment section.
Still unsure? Use the broker finder and find the best broker for you or learn more about investing your money.
