Best online brokers in 2018

Top 2 trading platforms for Europeans
Saxo Bank DEGIRO
Best online brokers in 2018

To make sure you choose the best online broker for your needs we went ahead and did a thorough research for you. Without such research picking a broker based on ad-hoc preferences is just a guess game. The evaluation criteria contain but is not limited to fees, funding process, withdrawal methods, offered products, ease of account opening and the trading platforms each offer.

After testing 16 online brokers, 6 brokers made it to the top which we highly recommend for you. This selection contains Brokerchooser's four highest-ranked stockbrokers, the highest-ranked forex broker, and the highest-ranked CFD broker.

And now, without further ado… The top 6 picks for the best online brokers in 2018:

Broker Description From which regions you can open an account?
Saxo Bank Danish investment bank Worldwide except for the US
Interactive Brokers Leading discount broker from the US Worldwide
Strateo Swiss online broker Europe
DEGIRO Upcoming Dutch discount broker Europe
Pepperstone Australian discount forex broker Worldwide except for the US
IG Leading CFD broker from the UK Worldwide except for the US

Regarding the selected brokers, only Interactive Brokers is available for US clients. 

If you want to check precisely which broker is available from your country, visit our country selector.

  Saxo Bank Interactive Brokers Strateo DEGIRO Pepperstone IG
Fee structure ★★★★ ★★★★★ ★★★ ★★★★★ ★★★★ ★★
Funding and withdrawal ★★★★★ ★★ ★★★★ ★★★ ★★★★★ ★★★★★
Account opening ★★★ ★★ ★★ ★★★★ ★★★★★ ★★★
Product portfolio ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★ ★★
Trading platform (web) ★★★★ ★★ ★★★★ ★★★★ ★★★★★ ★★★★★
Overall rating 4.8 4.4 4.4 4.3 4.3 4.1

 

All selected broker's portfolio contains CFD products. They are complex and very risky, thus not suitable for everyone. You can easily lose all of your invested money. If you don't have clue what a CFD is, start by reading more about CFD trading. 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.

Best-online-brokers-blogpost

What is an online broker?

Thirty years ago if you wanted to buy a stock, you had to pick up the phone and call your broker, who executed the transaction in return for a commission. Brokers were like in the Wolf of Wall Street movie. They were checking the stocks' prices while holding telephone and shouting.

Everything changed after the internet appeared. Nowadays if you want to buy Apple shares, you open online an account, deposit money, and make the order through the brokers' online platform. These brokers are the online brokers.

Online brokers help you buying and selling securities, like stocks. After making your order, the online broker executes it immediately. Everything is online.

Best online brokers
What makes a good online broker?

Online brokers differ along many factors. At Brokerchooser we test online brokers through 60 criteria, but not to overwhelm you, these are the 5 most important criteria.

The 5 most important criteria for online brokers are:

1. Fee structure: The trading fee of a typical US equity trade can be 50 times higher at one online broker compared to another. Worth to check the fees.
2. Funding and withdrawal:  Transferring money to your account can be 5 times longer and more expensive at one online 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 online 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 online brokers
Fee comparison

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

You can compare trading fees, financing rates, and some non-trading fees. To find out more about how the fares compare between the different brokers, check out our ultimate comparison table.

Trading fees

In order to make trading fees comparable, we disclose stock, forex, and CFD trading fees.

A. Stock trading fees

Below you can see how much a $2,000 stock trading costs. The typical cost covers the commission.

The cost of a typical trade Saxo Bank Interactive Brokers Strateo DEGIRO Pepperstone IG
USA stocks $15 $1 $15 $1 NA NA
UK stocks $12 $9 $22 $5 NA NA
Germany stocks $14 $5 $17 $5 NA NA

NA = this asset class is not provided

As the table shows, the Dutch discount broker DEGIRO is the cheapest.

B. Forex trading fees

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

  Saxo Bank Interactive Brokers Strateo DEGIRO Pepperstone IG
Trading cost
EURUSD $3.2 $2.3 $12.6 NA $1.1 NA
NZDUSD $4.3 $2.7 $15.6 NA $2.1 NA
Usual spread, pip
EURUSD 0.2 0.3 3 NA 1.2 NA
NZDUSD 0.9 0.5 4 NA 1.5 NA

NA = this asset class is not provided

The trading cost includes the commission and the spread cost of a $20,000 trade. Pepperstone has the most favorable all-inclusive fee structure. However, Saxo Bank and Interactive Brokers have the lowest spreads. 

C. CFD trading fees

With regards to the CFD trading-related fees, online 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.

You can see below how much a typical trade costs at each broker.

Overall cost of a typical trade Saxo Bank Interactive Brokers Strateo DEGIRO Pepperstone IG
EURUSD CFD $15 $14 NA NA NA $13
Apple share CFD $42 $3 $42 $3 NA $32
BMW share CFD $29 $8 $29 $12 NA $25

NA = this asset class is not provided

Interactive Brokers and DEGIRO have the lowest, while Saxo Bank has the highest CFD costs. 

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.

The table below shows the brokers' financing fees.

Typical annual financing rate Saxo Bank Interactive Brokers Strateo DEGIRO Pepperstone IG
USD 9.5% 2.7% 2.5% 2.4% Not transparent 4.4%
EUR 8.0% 1.5% 3.5% 1.3% Not transparent 2.1%

At IG the financing fees were calculated from the overnight fee. Overnight fee is the cost you pay when you hold CFD positions overnight. DEGIRO leads the pack here as well.

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 traders taking out profits every month.

Fee category Saxo Bank Interactive Brokers Strateo
Inactivity fee $100 / 6 months, after 6 months of inactivity $10 / month if you do not generate any commission in that month CHF 25 / 6 months, after 6 months of inactivity or less than 5 trades in the previous year
Deposit fee No No No
Withdrawal fee No   One free/month, $10 for the rest. For exotic currencies, this can be higher. CHF 2 to a Swiss bank account and CHF 15 to foreign bank account

 

Fee category DEGIRO Pepperstone IG
Inactivity fee No No No
Deposit fee No 3% for credit/debit card, free for other deposits £15 for international transfers
Withdrawal fee No $20 for international bank transfer £12/month after 2 years of inactivity

Now that we compared the fees, trust us, you need to look into a bit deeper than just fees when selecting a broker. Let's investigate the best brokers one by one. 

Best online brokers
Best online brokers

Saxo Bank

BACKGROUND:

Danish investment bank specializing in online trading and investments.

RECOMMENDED FOR:

Investors aiming for a great research and trading platform with a broad access to the international markets.

MINIMUM DEPOSIT:

$2,000

OVERALL SCORE:

4.8/5

AWARD:

Research champion

Visit broker

best-online-brokers-blogpost-saxo-bank-web-trading-platform

1. Fee structure ★★★★☆

Saxo Bank has an okayish fee structure. Its trading fees are mid-range. Most of its non-trading fees are favorable, except the financing rate.

2. Funding and withdrawal – ★★★★★

Saxo has an easy interface and multiple options to fund and withdraw money. You can transfer money via bank transfer or credit/debit cards. Furthermore, the withdrawal is free of charge.

3. Account opening – ★★★☆☆

The opening process of your brokerage account is fast and seamless, your account will be functioning within three to four days. Furthermore, you can open an account in several currencies. On the flip side, a minimum amount of $2,000 is required.

4. Product portfolio ★★★★★

Saxo Bank will give you wide access to international markets in almost all asset classes: equities, ETFs, forex, bonds, options, futures, CFDs, cryptos. Only the mutual funds are missing from the product offer. 

5. Web trading platform – ★★★★☆

Saxo Bank's trading platform, the SaxoTraderGO is a great platform. It is easy to navigate and provides all trading tools. However, its customizability is limited.

 

Full Saxo Bank Review

 

Interactive Brokers

BACKGROUND:

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

RECOMMENDED FOR:

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

MINIMUM DEPOSIT:

$10,000

OVERALL SCORE:

4.4/5

AWARD:

Product portfolio champion

Visit broker

best-online-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 opening process of your brokerage account 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, mutual 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

 

Strateo

BACKGROUND:

Strateo is a Swiss-based online broker founded in 2009 as a subsidiary of Keytrade Bank in Belgium.

RECOMMENDED FOR:

Buy and hold investors with any experience level.

MINIMUM DEPOSIT:

$1,000

OVERALL SCORE:

4.4/5

AWARD:

Best for beginners

Visit broker

best-online-brokers-blogpost-strateo-web-trading-platform

1. Fee structure ★★★☆☆

Strateo has high trading fees and an ok non-trading fee structure. 

2. Funding and withdrawal – ★★★★☆

You can only fund and withdraw via bank transfer. However, the process is user-friendly and fast.

3. Account opening – ★★☆☆☆

Strateo brokerage account opening was not fully digital for our location, and rather slow. You can choose from 6 base currencies to open your account which is limited compared to Interactive Brokers and Saxo.

4. Product portfolio ★★★★★

It has an excellent product portfolio offering, you can find all asset classes: equities, ETFs, forex, mutual funds, options, futures, bonds, cryptos.

5. Web trading platform – ★★★★☆

Strateo's web platform offers a clean and easy-to-use interface. It can be easily navigated, and customers will have no problem understanding the basic functions. On the flip side, we missed the customizability and the price alerts.

 

Full Strateo Review

 

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

AWARD:

Fee champion

Visit broker

best-online-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, mutual 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

 

Pepperstone

BACKGROUND:

Pepperstone is an Australian discount forex broker.

RECOMMENDED FOR:

High volume FX traders.

MINIMUM DEPOSIT:

None

OVERALL SCORE:

4.3/5

AWARD:

Customer service champion

Visit broker

best-online-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 ★★☆☆☆

You can trade with only forex and CFDs. Pepperstone's forex offering is very broad. However, the CFD offering is average.  

5. Web trading platform – ★★★★★

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

 

Full Pepperstone Review

 

IG

BACKGROUND:

IG was established in the UK in 1974 and is one of the biggest CFD providers in the world.

RECOMMENDED FOR:

Traders with any experience level aiming for a great and easy-to-use trading platform.

MINIMUM DEPOSIT:

$300

OVERALL SCORE:

4.1/5

AWARD:

Web trading platform champion

Visit broker

best-online-brokers-blogpost-IG-web-trading-platform

1. Fee structure ★★☆☆☆

IG has pricey trading fees and mid-range financing rates compared to competitors.

2. Funding and withdrawal – ★★★★★

You have several options to transfer money. You can fund or withdraw via bank transfer, credit/debit card, and Paypal. Furthermore, the transfer process is user-friendly and fast. 

3. Account opening – ★★★☆☆

The opening process of your brokerage account is fast and fully digital. However, there is a $300 first-time deposit and the sales team is very pushy.

4. Product portfolio ★★☆☆☆

At IG, most clients can only trade with CFDs, but the CFD offering is the best among CFD brokers. Clients from the UK and some other countries have the possibility to trade with shares.

5. Web trading platform – ★★★★★

IG's platform is great and easy to use. Even beginners can get familiar with it in a short time. It has really diverse trading tools.

 

Full IG Review

Best online brokers
Keep in mind - Investor Protection

We recommend only quality brokers, so you can be sure none of the listed online 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. 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.

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.

  Saxo Interactive Brokers Strateo DEGIRO Pepperstone IG
Supervisory authority FSA, FCA FCA, FINRA FINMA DNB, AFM FCA FCA
Protection amount for European clients Cash up to €100,000 £50,000 CHF 100,000 €20,000 £50,000 £50,000
Securities up to €20,000
Protection amount for US clients Not available Cash up to $250,000 Not available Not available Not available Not available
Not available Securities up to $500,000 Not available Not available Not available Not available

Best online brokers
Innovative services

Some brokers have started to introduce amazing innovative services like social trading or roboadvisory.

Between our top picks for best online brokers Saxo Bank, Interactive Brokers, and IG provide the most innovative services.

Saxo Bank is catching up with the new social trading trend. On tradingfloor.com you can check other traders’ strategies and you can even follow them. This means you will be notified about trades, although the system does not automatically copy the trades as it does at eToro. So if you like what other traders are doing, you’ll have to copy them manually.

Interactive Brokers has an asset management service which enables clients to choose a professional portfolio manager who will invest their money. This service combines the benefits of an actively managed fund and a low cost, automated ETF. Furthermore, at IB you can also use a chatbot for trading.

IG's robo-advisory type of service is available for only UK residents. This robo-advisory service covers ETF portfolios managed by BlackRock, the issuer of iShares ETFs. 

Best online brokers
Bottom-line

If you are still uncertain which is the best online broker in 2018 for you, this little summary may provide further clarity.

We are certain you will manage to pick your favorite online broker.

BEST ONLINE BROKERS

Beginners can feel comfortable with Saxo Bank, while more advanced traders would appreciate its great tools, charts and a wide range of research. Its fee structure is middle range, not the most competitive.

 

Visit broker

best-online-brokers-blogpost-saxo-bank-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-online-brokers-blogpost-interactive-brokers-logo

Swiss Strateo is a good choice for those starting their investment journey and aiming for more research support. Frugal buy and hold investors might feel they are paying too much for a transaction here.

 

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best-online-brokers-blogpost-strateo-logo

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.

 

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best-online-brokers-blogpost-DEGIRO-logo

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.

 

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best-online-brokers-blogpost-pepperstone-logo

Traders with any experience level aiming for a great and easy-to-use trading platform should try IG. The CFD product portfolio is excellent. Funding and withdrawals are also easy, overnight rates are competitive, however, the trading fees are quite high. 

 

Visit broker

best-online-brokers-Blogpost-IG-Logo

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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