Best discount brokers in 2018

Top 2 trading platforms for Europeans
Interactive Brokers DEGIRO
Best discount brokers in 2018

Choose the best discount broker, we did the research for you. We tested in-depth only quality online brokers available for European and US customers. We evaluated fees, funding, withdrawal, product portfolios, account opening, trading platforms and more.

As a result, we filtered out the online brokers with the lowest fees and the highest quality.  

Our top eight picks for the best discount brokers in 2018 are:

Broker Description From which regions you can open an account?
Interactive Brokers Leading discount broker from the US Worldwide
DEGIRO Upcoming Dutch discount broker Europe
tastyworks Upcoming US low commission option broker Europe, US, Latin America
Tradestation Large discount broker from the US Worldwide
Pepperstone Australian discount forex broker Worldwide except for the US
Oanda US discount forex broker Worldwide
eToro CFD broker specialized in social trading Worldwide except for the US
Markets.com Discount CFD broker Worldwide except for the US

Head to our country selector to get detailed info on which broker is available in your country.

We have created three online broker categories: discount stockbrokers, discount forex brokers and discount CFD brokers. The three groups substantially differ in several areas, like fee structure, so it makes sense to create the three peer groups. This categorization will also help you to easily find a cheap stockbroker, forex broker or CFD broker.

The best discount broker for beginners is DEGIRO. It has an easy-to-use trading platform and very low fees.

 

BEST DISCOUNT STOCKBROKERS

  Interactive Brokers DEGIRO tastyworks Tradestation
Fee structure ★★★★★ ★★★★★ ★★★★★ ★★★★
Funding and withdrawal ★★ ★★★ ★★ ★★★
Account opening ★★ ★★★★ ★★★★
Product portfolio ★★★★★ ★★★★★ ★★ ★★★
Trading platform (web) ★★ ★★★★ ★★★★ ★★★
Overall rating 4.4 4.3 4.0 3.8

 

BEST DISCOUNT FOREX BROKERS

  Pepperstone Oanda
Fee structure ★★★★ ★★★★★
Funding and withdrawal ★★★★★ ★★★★
Account opening ★★★★★ ★★★★★
Product portfolio ★★ ★★
Trading platform (web) ★★★★★ ★★★★
Overall rating 4.3 4.1

 

BEST DISCOUNT CFD BROKERS

  Markets.com eToro
Fee structure ★★★★★ ★★★★
Funding and withdrawal ★★★★★ ★★★★
Account opening ★★★★★ ★★★★
Product portfolio
Trading platform (web) ★★★ ★★★
Overall rating 4.1 3.9

CFDs are complex and very risky products, thus not suitable for everyone. You can easily lose all of your invested money. Start by reading more about CFD trading if you don't have a clue what a CFD is. Just a short FYI for US customers: CFD trading is banned in the US.

Not sure which one to choose? For a personal broker recommendation, check out Brokerchooser's broker selection tool. You input your preferences and you get a personal recommendation fitting your needs.

Want to see more options? For comparing all the brokers, visit our comparison page.

What is a discount broker?

A discount broker by definition is a brokerage company that executes your buy and sell orders at a low trading fee. Discount broker's fees can be lower since they don't provide extra services like full-.service brokers. These extra services include research, personal investment advice, tax planning or robo-advisory.

Discount brokers were appearing with the wider penetration of the internet and the online broker services. Brokerage companies started to provide their service online and fully automatized. This was the rise of the 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 5-10 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 a 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 is planning to launch its trading app this year. Stay tuned, we will come out with a Robinhood and Freetrade broker reviews soon.

Best discount brokers
What makes a good discount broker?

 A good discount broker has low fees. Furthermore, it offers fast and easy funding and withdrawal options, user-friendly account opening, wide product portfolio and an easy-to-use web platform.

In this article, we have focused on online discount brokers, tested them on 60 criteria and now will concentrate on you the 5 most important criteria you should keep an eye on. Thus, you can easily find the best discount broker aligning with your trading style and preferences.

Our primary selection criteria was the fee structure.

The 5 most important criteria for discount brokers are:

1. Fee structure: Discount brokers' main advantage is the low cost. However, even discount brokers have significant fee differences. Worth to check the fees.
2. Funding and withdrawal:  Transferring money to your account can be 5 times longer and more expensive at one discount broker compared to another.
3. Account opening: Some online brokers require at least $10,000 to invest, others don't set a minimal first-time deposit. Check out what the best discount brokers require.
4. Product portfolio: You want to invest in Amazon and Bitcoin? They might not be available. Check the product coverage before opening an account.
5. Web trading platform: A user-friendly and well-equipped trading platform can significantly increase your trading comfort.

Best discount brokers
Discount stockbrokers

Fees, fees, and fees. We bet this is on top of your mind when you want to select the best discount stockbrokers. Let's kick off with fees then. 

You can compare below the trading fees, the annual financing rates and some non-trading fees of the best discount stockbrokers.

Trading fees

As the table shows, the Dutch discount broker, DEGIRO is the cheapest among all assets. Interactive Brokers is a bit behind, but still very competitive. Tastyworks and Tradestation also have favorable fee structures, but not the most competitive. To find out more about how the fees compare between the different online brokers, check out our ultimate comparison table.

The cost of a typical trade DEGIRO Interactive Brokers tastyworks Tradestation
US stocks $0.7 $1.0 $2.5 $5.0
UK stocks $5.4 $8.7 not provided not provided
US funds $10.6 $15.0 not provided $15.0
US stock index options $5.0 $7.0 $5.0 $10.0

A typical trade for the US stocks, UK stocks, and US funds is $2,000. We calculate with 10 stock index options when calculating the typical cost of the US stock index options. The typical cost covers the trading commission.

Financing fees

When you trade on margin you need to pay an annual interest rate for your online broker. This is the financing fee. The lower, the better. DEGIRO is leading the pack here as well.

Typical annual financing rate DEGIRO Interactive Brokers tastyworks Tradestation
USD 2.4% 2.7% 8.0% 8.5%
EUR 1.3% 1.5% not provided not provided

Non-trading fees

Non-trading fees can also lower your investment/trading performance. Inactivity fee is interesting for buy and hold investors, while withdrawal fee for those traders who are transferring out their profit every month.

  DEGIRO Interactive Brokers tastyworks Tradestation
Inactivity fee No $10 / month if you do not generate any commission in that month No $50-$100/year
Deposit fee No No No No
Withdrawal fee No $10 for USD

$25 for US citizens

$45 for non-US citizens

$25 for US citizens

$35 for Non-US citizens

Now that you have this comparison based on fees, trust us, you need to look a bit deeper into other aspects as well. Let's investigate the best discount stockbrokers one by one. 

 

DEGIRO

BACKGROUND:

Rapidly growing Dutch discount broker.

RECOMMENDED FOR:

Price-sensitive buy and hold investors and traders looking for only execution.

MINIMUM DEPOSIT:

None

OVERALL SCORE:

4.3/5

Visit broker

best-discount-brokers-blogpost-degiro-web-trading-platform

1. Fee structure ★★★★★

DEGIRO provides one of the lowest fee structures in the market. In most asset classes, it is more competitive than Interactive Brokers. It also provides one free ETF trading in a month, a great offer for buy and hold investors.

2. Funding and withdrawal – ★★★☆☆

There are only a few options to fund/withdraw your money. One option for transferring money is the bank transfer which takes usually 2-3 working days. Beside the bank transfer, you can use SOFORT, a third party, instant deposit service provider. The money transfer at SOFORT usually takes around 30 minutes.

3. Account opening – ★★★★☆

DEGIRO has a very easy and fast account opening process. As a plus, you don't need a minimum deposit. On the flip side, you can only change your base currency in a tricky way.

4. Product portfolio ★★★★★

You will have a wide access to international markets in all asset classes except forex. Available asset classes: equities, ETFs, funds, bonds, options, futures, CFDs, cryptos.

5. Web trading platform – ★★★★☆

DEGIRO’s web platform is simple and easy to use. Even beginners will find it easy to conduct simple transactions like share dealing. On the flip side, price alert function is missing and customization is limited.

 

Full DEGIRO Review

 

Interactive Brokers

BACKGROUND:

Interactive Brokers is one of the leading US-based discount brokers.

RECOMMENDED FOR:

Traders aiming low fees and can deal with a complicated trading platform. Not ideal for beginners.

MINIMUM DEPOSIT:

$10,000

OVERALL SCORE:

4.4/5

Visit broker

best-discount-brokers-blogpost-interactive-brokers-web-trading-platform

1. Fee structure ★★★★★

Interactive Brokers has very competitive commissions and fees among all asset classes.

2. Funding and withdrawal – ★★☆☆☆

Only bank transfer is available to European customers. For more information on US funding and withdrawal options, check IB's website.  

3. Account opening – ★★☆☆☆

The account opening process is overly complicated and slow. On the other hand, you can choose from a great variety of account base currencies and account types.

4. Product portfolio ★★★★★

All asset classes are available: equities, ETFs, forex, funds, options, futures, bonds, CFDs and cryptos. Beyond the wide product portfolio, Interactive Brokers gives you access to many international markets. 

5. Web trading platform – ★★☆☆☆

Interactive Brokers' web trading platform is good for execution with a very advanced order management panel. However, standard functions like technical analysis are missing or underdeveloped.

 

Full Interactive Brokers Review

 

Tastyworks

BACKGROUND:

Tastyworks is a US discount options broker. It is quite young, established in 2017.

RECOMMENDED FOR:

Price-sensitive option traders focusing on the US.

MINIMUM DEPOSIT:

Cash account: none

Margin account: $2,000

OVERALL SCORE:

4.0/5

Visit broker

best-discount-brokers-blogpost-tastyworks-web-trading-platform

1. Fee structure ★★★★★

Tastyworks has a competitive fee structure. At stock trading, it is among the bests, but a bit behind Interactive Brokers and DEGIRO. At options, it has the same price as DEGIRO and being better priced than IB. Additionally, it is quite unique that it does not charge an account fee or inactivity fee.

2. Funding and withdrawal – ★★☆☆☆

For US citizens multiple money transfers and withdrawal options are available, whereas non-US citizens have limited options. For non-US citizens, the bank transfer is the only way to fund or withdraw money.

3. Account opening – ★★★★☆

The account opening process is really fast. Tastyworks offers a 1 to 3 days approval time, but our account has been approved within the same day of registration.

4. Product portfolio ★★☆☆☆

Tastyworks has a limited product portfolio. Available asset classes: equities, options, futures.

5. Web trading platform – ★★★★☆

The trading platform is well structured, but it is also complex. It is equipped with a very strong option trading panel.

 

Full Tastyworks Review

 

Tradestation

BACKGROUND:

Tradestation is a US-based discount broker.

RECOMMENDED FOR:

Price-sensitive buy and hold investors with any experience level.

MINIMUM DEPOSIT:

Cash account: $500

Margin account: $2000

Futures account: $5000

OVERALL SCORE:

3.8/5

Visit broker

best-discount-brokers-blogpost-tradestation-web-platform

1. Fee structure ★★★★☆

The fee structure is fairly competitive. However, some non-trading fees like financing rate or inactivity fee are quite high.

2. Funding and withdrawal – ★★★☆☆

Funding and withdrawal options are very limited compared to other brokers. You can transfer money through bank transfer or check deposit. Furthermore, with the help of ACAT (Automated Customer Account Transfer), you can also transfer securities from one account to another.

3. Account opening – ★☆☆☆☆

It is slow, and not fully digital for non-US clients. As a non-US customer, you will need to physically mail a W8 (US tax) form to Tradestation, this can take up to a few weeks.

4. Product portfolio ★★★☆☆

Tradestation has a wide variety of US products available, however, international markets are missing. Available asset classes: equities, ETFs, funds, bonds, options, futures. 

5. Web trading platform – ★★★☆☆

It's a well-designed web trading platform. However, it lacks some functions, such as a clear fee report, order confirmation, and price alerts.

 

Full Tradestation Review

Best discount brokers
Discount forex brokers

Low fees are important for good long term returns, especially if you trade larger volumes. Let's see which forex brokers have competitive fee structures. 

You can compare below the trading fees, the annual financing rates and some non-trading fees of the best discount stockbrokers.

Trading fees

Both Pepperstone and Oanda has very competitive forex trading fee structures.

Below you can compare the all-inclusive cost of a typical forex trade and the usual spread of a major and a minor currency pair.

  Pepperstone Oanda
All-inclusive cost    
EURUSD $1.1 $1.1
NZDUSD $2.1 $2.2
Usual spread, pip    
EURUSD 1.2 1.2
NZDUSD 1.5 1.6

The all-inclusive cost includes the commission, the spread cost and the financing cost of a $20,000 trade that you hold for one week.

Financing fees

Oanda's financing rates are very competitive. Pepperstone's financing fees, unfortunately, are not transparent.

Typical annual financing rate Pepperstone Oanda
USD not transparent 1.7%
EUR not transparent 0.4%

Non-trading fees

  Pepperstone Oanda
Inactivity fee No €10/month after 2 years of inactivity on the account
Deposit fee 3% for credit/debit card, free for other deposits No
Withdrawal fee $20 for international bank transfer €15 for bank transfer

Now that you have this comparison based on fees, trust us, you need to look a bit deeper into other aspects as well. Let's investigate the best discount brokers one by one.

 

Pepperstone

BACKGROUND:

Pepperstone is an Australian discount forex broker.

RECOMMENDED FOR:

High volume FX traders.

MINIMUM DEPOSIT:

None

OVERALL SCORE:

4.3/5

Visit broker

best-discount-brokers-blogpost-Pepperstone-web-trading-platform​​​​​​

1. Fee structure ★★★★☆

Pepperstone provides competitive and transparent trading fees. However, gathering together the non-trading fee information is not a piece of cake. This is especially true for the financing cost information which is not provided at all.

2. Funding and withdrawal – ★★★★★

You will have a wide variety of funding and withdrawal options. You can transfer money through bank transfer, electronic wallets plastic cards and so on.

3. Account opening – ★★★★★

Pepperstone does a good job with their account opening, residents of most countries may open an account, and the process is straight-forward.

4. Product portfolio ★★☆☆☆

Only forex and CFD trading. Pepperstone's FX offering is very broad compared to Oanda. However, the CFD offering is tighter than Oanda's offer. 

5. Web trading platform – ★★★★★

Pepperstone offers well designed, user-friendly third-party trading platforms, MetaTrader 4 and cTrader. 

 

Full Pepperstone Review

 

Oanda

BACKGROUND:

Oanda is a privately held discount forex broker with US origins.

RECOMMENDED FOR:

Price-sensitive FX traders.

MINIMUM DEPOSIT:

Standard: None

Premium: $50,000

OVERALL SCORE:

4.1/5

Visit broker

​​​​​​best-discount-brokers-blogpost-oanda-web-platform

1. Fee structure ★★★★★

Oanda's spreads are almost the same as those of Pepperstone's. Its financing costs are transparent which is not true for Pepperstone.

2. Funding and withdrawal – ★★★★☆

Funding or withdrawal is possible via debit/credit card, PayPal, and bank transfer. Credit/Debit card funding is immediate, while bank wire transfer may take up to 5 business days. One withdrawal per month through credit/debit card or PayPal is free of charge.

3. Account opening – ★★★★★

From start to finish you can calculate with less than 10 minutes to be able to open your account. Beyond the speed, the account opening process is fully digital and straight-forward.

4. Product portfolio ★★☆☆☆

You can trade with only forex and CFDs. Oanda's forex offering lags behind Pepperstone's. However, Oanda has a wider CFD offering.

5. Web trading platform – ★★★★☆

Oanda's trading platform is very user-friendly and offers an easy learning curve.

 

Full Oanda Review

Best discount brokers
Discount CFD brokers

CFD broker fees are not easy to comapre, but we are here to help. Let's see which CFD brokers have advantageous fee structures.

You can compare below the trading fees, the annual financing rates and some non-trading fees of the best discount stockbrokers.

Trading fees

With regards to the trading-related fees, CFD brokers can charge commissions, spreads and overnight fees. To make your life easier we will compare three typical trading products for a real-life scenario and you can compare the aggregated trading-related fees.

These three products are:

  • forex - EURUSD
  • US equity - Apple share CFD
  • European equity - BMW share CFD.

And the real-life scenario is that we assume a $2,000 trade and holding it for one week, and then selling it.

Overall cost of a typical trade eToro Markets.com
EURUSD CFD $12.3 $15.4
Apple share CFD $3.0 $6.8
BMW share CFD $8.6 $7.4

Within CFD-only brokers, Markets.com and eToro are competing for the cost champion badge.

Both Markets.com and eToro incorporate their trading commission into the spread.

Overnight fees

When you hold your CFD position overnight, an overnight fee will be charged. eToro usually charges lower overnight fees.

Typical yearly overnight fee eToro Markets.com
EURUSD CFD 1.8% 3.10%
Apple share CFD 4.9% 6.20%
BMW share CFD 6.9% 6.20%

Non-trading fees

Markets.com has a more favorable non-trading fee structure.

Fee category eToro Markets.com
Inactivity fee $5/month if you do not log in for 12 months No
Deposit fee No No
Withdrawal fee $25 No

Now that you have this comparison based on fees, trust us, you need to look a bit deeper into other aspects as well. Let's investigate the best discount CFD brokers one by one. 

 

eToro

BACKGROUND:

eToro is an Israeli social trading broker established in 2006

RECOMMENDED FOR:

Social trading, e.g. following other traders’ trades.

MINIMUM DEPOSIT:

$200

OVERALL SCORE:

3.9/5

Visit broker

best-discount-brokers-blogpost-etoro-web-trading-platform​​​​​​

1. Fee structure ★★★★☆

eToro offers competitive trading fees, while non-trading fees are mid-range.

2. Funding and withdrawal – ★★★★☆

It is easy to deposit, there are a lot of funding and withdrawal options. You can use bank transfer, credit/debit cards, and electronic wallets like PayPal, Skrill or Neteller. Withdrawing money can take more time than it is disclosed, but at the end, you will receive your money.

3. Account opening – ★★★★☆

Account opening is completely hassle-free and super fast. On the other hand, you can have your account only in USD.

4. Product portfolio ★☆☆☆☆

As eToro is a CFD broker you can trade with only CFDs. Available asset classes within CFDs: equities, ETFs, indices, forex, commodities, and cryptos. Furthermore, it has some innovative CFD offerings, such as Copy Funds.

5. Web trading platform – ★★★☆☆

eToro’s web trading platform is simple and easy to use. However, we have experienced outages and breakdowns. 

 

Full eToro Review

 

Markets.com

BACKGROUND:

Markets.com is a CFD broker regulated in Cyprus and South Africa.

RECOMMENDED FOR:

Traders wanting to venture into CFD trading

MINIMUM DEPOSIT:

$100

OVERALL SCORE:

4.1/5

Visit broker

best-discount-brokers-blogpost-Markets.com-web-trading-platform

1. Fee structure ★★★★★

Markets.com has a competitive fee structure. Trading fees are almost the same as eToro's. No inactivity fee and withdrawal fee are applied. However, the financing rate is not transparent enough.

2. Funding and withdrawal – ★★★★★

At Markets.com you will have many options to transfer money. You can use bank transfer, credit/debit cards, and electronic wallets like PayPal, Skrill or Neteller.

3. Account opening – ★★★★★

The account opening process is seamless and easy to complete.

4. Product portfolio ★☆☆☆☆

As Markets.com is a discount CFD broker you can trade with only CFDs. Available asset classes within CFDs: equities, ETFs, indices, forex, commodities, and cryptos.

5. Web trading platform – ★★★☆☆

It is simple and easy to use, but the functionality is not sophisticated.

 

Full Markets.com Review

 

Best discount brokers
Keep in mind - Investor Protection

We recommend only quality brokers, so you can be sure none of the listed discount brokers are scams. However, also brokerage companies and other financial companies can go down. Remember Lehman Brothers?

In these cases, it is important to know what happens with your securities and cash on your account. These are usually held in segregated accounts, so even in case of the bankruptcy of the broker, 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.

The compensation amounts differ from country to country, so worth checking this before opening an account.

In the US, futures accounts are not covered by compensation and CFD trading is fully banned.

DISCOUNT STOCKBROKERS

  DEGIRO Interactive Brokers tastyworks Tradestation
Supervisory authority DNB, AFM FCA, FINRA FINRA FINRA
Protection amount for European clients €20,000 £50,000 Cash up to $250,000 Cash up to $250,000
Securities up to $500,000 Securities up to $500,000
Protection amount for US clients Not available Cash up to $250,000 Cash up to $250,000 Cash up to $250,000
Not available Securities up to $500,000 Securities up to $500,000 Securities up to $500,000

DISCOUNT FOREX BROKERS

  Pepperstone Oanda
Supervisory authority FCA FCA, CFTC
Protection amount for European clients £50,000 £50,000
Protection amount for US clients Not available No protection

DISCOUNT CFD BROKERS

  eToro Markets.com
Supervisory authority FCA, CySEC CySEC
Protection amount for European clients £50,000 for UK residents, €20,000 for non-UK €20,000

Best discount brokers
Bottom-line

We hope, you managed to pick your favorite from the recommended best discount brokers. If you are still uncertain which is the best discount broker in 2018, this little summary may provide further clarity.

DISCOUNT STOCKBROKERS

 

Price sensitive buy and hold investors and traders should consider DEGIRO with its highly competitive fees and wide market access. Even beginners can handle its trading platform, however, research and education are not provided.

 

Visit broker

 

best-discount-brokers-blogpost-DEGIRO-Logo

Interactive Brokers is designed for advanced traders and investors. We like it since it has tons of functions, a competitive fee structure, and great markets coverage, but stay away if you are a beginner.

 

Visit broker

best-discount-brokers-blogpost-Interactive-Brokers-Logo

Tastyworks is recommended for price-sensitive options traders focusing on the US. It is a relatively new broker, with a good fee structure and a great customer service. However, they lack a wide product portfolio, and their trading platform feels unpolished. 

 

Visit broker

best-discount-brokers-blogpost-tastyworks-logo

If you are a buy-and-hold investor looking for a US based broker, check out TradeStation. It offers a good level of investor protection, the fees are competitive, and it has a well designed mobile trading platform. However, the account opening can be lengthy, and it is lacking international product coverage. 

 

Visit broker

best-discount-brokers-blogpost-tradestation-logo

DISCOUNT FOREX BROKERS

If you are looking for a forex broker with competitive pricing, and a world class customer support, try Pepperstone. Account opening is quick and user-friendly, no minimum balance, with many funding options to choose from. However, it is a forex and CFD only broker, and it is lacking some research and fundemental data.

 

Visit broker

best-discount-brokers-blogpost-pepperstone-logo

When looking for a well-estabrlished broker with a forex focus, try Oanda. It has a very competitive forex pricing, fast and fully digital account opening, no minimum balance, and strong technical analysis tools. However, Oanda is a forex focused broker, other products are lacking, and the customer support needs improvement.

 

Visit broker

best-discount-brokers-blogpost-oanda-logo

DISCOUNT CFD BROKERS

 

eToro is a great place for social trading and its fee structure is also competitive. On the other hand, we experienced outages and breakdowns with it's trading platform quite often. 

 

Visit broker

Best-CFD-Broker-Blogpost-eToro-Logo

Markets.com offers fast account opening, has great fees, and it is easy to fund and withdraw your account. However, the trading platform is missing more sophisticated functionalities. 

 

Visit broker

Best-CFD-Broker-Blogpost-Markets.com-Logo

Still not sure? Get a personal recommendation.

 

 

AUTHOR

Gergely Korpos
Gergely Korpos
Co-founder, CPO
Gergely's aim is to bring more clarity into personal investing. He has 10 years of experience in financial markets with GE Money, KPMG and MOL. He concluded thousands of trades as a commodity trader and financial portfolio manager
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