Best Online Discount Brokers for 2017

I‘ve been investing nearly 25 years, long before online brokers came on the scene. During that time I’ve used several of the best online discount brokers, including Scottrade, OptionsHouse, and even Vanguard’s brokerage services.  Based on that experience and a lot of research, I’ve complied this list of the top options. Note that I have accounts at each of these firms and have personally tested their trading platforms, research, and other tools. Here’s a quick look at the top brokers.

Best Online Discount Brokers of 2017

Over the years I’ve learned three important things about brokerage firms.

First, there are a lot of them. You’ve probably heard of many discount sites that allow you to trade stocks online (e.g., Scottrade), but I’m guessing there are a lot of online brokers you’ve never heard of (Sogotrade may be one example).

Second, while on the surface they can all seem similar, when you dig deep into what these brokers offer, you’ll find big differences. For example, not all of them offer the same account types. With some you can’t buy mutual funds, while others offer more mutual funds than most. And the stock trading tools available to you vary from one discount broker to the next.

And the third thing I’ve learned is that the cost of these discount firms can be tricky to understand, and in the end, may not be the most important factor. Because I watch every dime we spend, it may seem odd that cost isn’t the most important factor to me (after all, we are talking about “discount” sites, not full service brokerage firms). I’ll come back to that in a moment, but first, it’s important to understand a few things about the fees discount online brokers charge.

Summary Of The Best Online Discount Brokers

scottrade-logoScottrade – Best Broker with Physical Offices

Scottrade is high on my list of potential discount brokers for my IRA account. There are several reasons why I’m leaning toward Scottrade. First, the cost is reasonable, with stock trades costing $7. Broker-assisted trades are $32, but I’ll rarely if ever use a broker. Scottrade ranks well in broker surveys, including Smart Money’s 2009 survey. Its one downside according to Smart Money is its banking services, but I’m not going to be using its banking services. It offers a number of account types, including IRAs and other retirement accounts. And with a Scottrade IRA account, there are no opening, closing, annual or custodian fees. I also like the look-and-feel of the site. It’s well organized and easy to navigate. The account minimum is just $500, and there are no inactivity or maintenance fees.

Scottrade has one other feature that I like; physical locations. Among discount online brokers, Scottrade has the largest network of branch offices. While I expect the vast majority of my transactions will be online, it’s good to know that I can talk to a person face to face if I need to.

Scottrade Summary:

  • Trade Stocks: $7 flat fee
  • Trade Options: $7 + $1.25/contract
  • Margin Rates: 5.25% to 7.75%
  • Broker Assist Fee: $32
  • Mutual Funds: $0 to $17 per trade
  • Minimum Deposit: $2,500 (There is no minimum deposit requirement to open a retirement account, custodial account or Coverdell Education Savings Account.)

You can get more information in our Scottrade review or open an account by visiting Scottrade.

optionshouse-logoOptionsHouse – Best Low-Fee Online Broker

At first, the word “options” in the name led me to believe that OptionsHouse only allowed you to trade options. Not true. With OptionsHouse, you can trade stocks, options or spreads. The cost to trade stocks is a flat $4.95, making it one of the lowest cost stock trading alternatives. There are no maintenance fees or monthly minimums, either. According to OptionsHouse, it offers a professional-grade trading platform backed by It is from this platform that OptionsHouse offers an array of professional trading tools.

To give you an idea of the look-and-feel of the OptionsHouse trading platform, here is a screen shot of its online design:



Now you might be a bit confused by the screenshot above because the URL shown is  When you take into consideration the logo shows “OptionsHouse by E*Trade”, you might wonder “How many brokers am I using at the same time?!”  Well the correct answer is three, OptionsHouse and TradeMonster were purchased by E*Trade so if you attempt to visit, you’ll be redirected to OptionsHouse, which is now owned by E*Trade.

OptionsHouse Summary:

  • Trade Stocks: $4.95 flat fee
  • Trade Options: $0.50 per contract + $4.95 base
  • Margin Rates: Ranges from Fed Funds Rate + 1.75% to Fed Funds Rate + 6.25%
  • Broker Assist Fee: $25
  • Mutual Funds: $20 per trade

For more information check out our OptionsHouse review or visit OptionsHouse.

TradeKing logoTradeKing – Best All-Around Online Broker

TradeKing is one of the lowest cost discount brokers, with both market or limit stock trades costing $4.95. And there is no additional cost for broker-assisted trades. It has been ranked #1 in customer service by SmartMoney Magazine and Kiplinger’s. Here’s what Kiplinger’s had to say about Trade King’s customer service:

In this category, TradeKing reigns. We were speaking with a friendly representative within 20 seconds when we called on a busy Monday morning for the stock market. Our e-mail asking a question about our account balance was returned in 7 minutes. You can also contact TradeKing representatives via instant messaging (only Schwab, E*Trade, Siebert and Scottrade lack the IM function on their Web sites).

TradeKing Summary:

  • Trade Stocks: $4.95 flat fee
  • Trade Options: $0.65 per contract + $4.95 base
  • Margin Rates: 4.50% to 9.25%
  • Broker Assist Fee: $20 + Regular Commission
  • Mutual Funds (Load): $0
  • Mutual Funds (No Load): $9.95
  • Minimum Deposit: None

The final thing I’ll mention about TradeKing is what it calls the Trader Network. Through the Trader Network, you can connect with other traders, share strategies and trading tips, and see the hottest trades of the day. To get more information check out our TradeKing review, or to open an account, visit TradeKing.

td-ameritradeTD Ameritrade – Best Online Trading Platform

The most expensive discount broker on our list, TD Ameritrade counters it’s cost with some of the best online trading tools.  It’s platform “Trade Architect” is my favorite portal to use, specifically designed for casual investors like myself.  If you’re looking for a more hardcore approach, they also have a thinkorswim platform that offers more date, more 3rd party research and more functionality.

Again, TD Ameritrade decided to cater to both casual and advanced investors by creating two separate mobile apps.

  1. TD Ameritrade Mobile (for the casual investor)
  2. TD Ameritrade Mobile Trader (for the advanced investor)


TD Ameritrade Summary:

  • Trade Stocks: $9.99 flat fee
  • Trade Options: $0.75 per contract + $9.99 base
  • Margin Rates: 6.50% to 9.25%
  • Broker Assist Fee: $44.99
  • Mutual Funds (Load): $0
  • Mutual Funds (No Load): $49.95
  • Minimum Deposit: None
  • Sign up Bonus: 60 days commission free trade + up to $600

For more information check out our TD Ameritrade review or visit TD Ameritrade.

How Much Will You Pay To Buy And Sell Equities Online

All of the firms make a point to advertise how much you pay to buy or sell stocks, mutual funds, options, or other equities. Today most trades at discount sites run from about $2.50 to $12 per trade. The key to remember, however, is that many of these firms charge additional fees, depending on how you use your account. These additional fees may include fees for large buy or sell orders, fees to buy or sell stocks trading at less than $1, account maintenance fees, account inactivity fees, and of course interest if you buy on margin.

Because these fees vary among discount brokers, the starting point is to understand how you will use your stock trading account. Will you trade frequently or just once or twice a month (or quarter)? Do you want to set up an automatic investment plan? Will you be buying stocks and mutual funds, or do you also plan to trade options? The answers to these questions will help you narrow the selection and ultimately pick the best broker for you investing needs.

Factors To Consider Other Than Cost

But just like most anything we buy, the cost is just one of many factors to consider. And the same is true when selecting a discount broker. So what are the factors besides cost that we should consider when selecting a discount stock broker? There are several, and they include ease of use, customer service, types of accounts offered, investing tools, type of investments you intend to buy, and account minimums. I’ve highlighted these and other factors below in the summary of the best online discount brokers. But just like cost, it’s important to know your investing goals when you evaluate your options. For example, account minimums may be a non-issue for you if you plan to invest a significant amount of money. Likewise, if you are looking for a specific account time (like an IRA), you can quickly eliminate those discount stock brokers that do not offer that account type.

Topics: Investing

32 Responses to “Best Online Discount Brokers for 2017”

  1. Would you please provide a recommendation of a discount broker that facilitates stock trades on foreign exchanges, specifically Toronto, Australia, and Hong Kong?



    • Bill, there are several alternatives for discount brokers that enable you to buy stocks on foreign exchanges. In researching the alternatives, it is important to understand that for many of these brokers, you can’t buy foreign stocks online, you must use a broker assisted transaction. Still, the cost of the discount brokers is relatively low, depending on your trading volume.

      That said, here are some alternatives:

      Scottrade: Scottrade has foreign exchange trades and offer separate commission schedules for Canadian Orders versus other foreign stocks.

      E*Trade: Etrade offers a global trading platform that covers exchanges in Canada, France, Germany, Hong Kong, Japan and the UK.

  2. Wendi Thiessen

    I’ve been using Interactive Brokers for the past two years. They have a powerful system, incredibly quick fills and charge $1 per 100 shares round trip ($2 /100 shares for Canadian trades). You can trade in most international markets. They have great options and futures capability but seem to exist out of the spot light.

  3. There are two things I look for that are hard to find in a discount (or any) broker. 1) Good and safe options for cash. When I don’t like the market, I sometimes go six or seven figures into cash. It’s important that that amount of money is earning something and is safe as it is well above FDIC and other guarantee limits. Scottrade is good in this respect. They break up your cash among several banks, if necessary, to keep full FDIC coverage. 2) Good bond trading capabilities on a commission and not a principal basis. Brokerage houses that trade bonds on a principal basis are generally ripping you off. E*Trade is not great, but good. Others have been very disappointing.

    Any suggestions?

  4. I use Interactive Brokers (trading account) and E*Trade (IRAs). IB is good, but it’s definitely for the experienced trader. You need to know the exchanges, symbols, etc. Easy for stock trading, a lot less so for futures, options & Forex. You actually can’t trade Forex on IB until you take a little exam they have, and have prior experience. While good for position / short term trading, wouldn’t use them for day-trading – the user interface isn’t conducive to it. For quantities of options (10-50), E*Trade actually approaches or beats IB’s rates. E*Trade is good for IRAs / SEP-IRAs, as it’s easy to get your funds in when you need to.

  5. Thanks for the tips. I use a comsec account to trade about once a month. I’d like to use E*trade or Scottrade as you recommend to save a few bucks (and encourage the CBA to be a bit more competitive). But how can I transfer the trades I’ve already made in comsec to a new online account? It doesn’t seem easy to switch between online brokers once you’ve invested some money.

  6. If you choose to open an account with scottrade, you can get three free online trades (worth $21). Enter the code XEPG6413 in the box after selecting “referred by friend/received a promo code” on the application page.

  7. I think SOGOTRADE is pretty good. It only cost $3 to make a trade (unlimited shares). They have good online and phone support, quick execution and a good inventory of shares that you can short! Oh and you only need $500 to open your account. You also get 100 free trades when you open your account. Can’t beat that.

  8. For Toeser, I use Scottrade, and am looking for cheaper but with good support. Think or Swim is never mentioned in any of these articles, and they are $5/trade, and I forgot what they charge for options. They are real brokers, and give advice if nec., and do not charge extra for broker-assisted trades. So that’s good. BUT, I had to stop using them because their platform is so sophisticated and difficult, and it’s easy to make a mistake.
    As far as bonds go, I made the mistake of puchasing bonds through Scottrade, and then found a bond broker, Hennion & Walsh(no-I do not work for them). It was cheaper to buy from them. Scottrade had to buy through a bond-broker, and charged extra fees.

    • Sue, thanks for the comment. I’ve been meaning to review Think or Swim, and will do so soon. You hit on the main problem, however. The Think or Swim platform is really designed for very sophisticated traders. For those of us that trade less frequently and take a more passive approach to investing, there are better options for online discount brokers. Interesting insight on bonds. I’ve bought all of my bonds through mutual funds. I assume you are buying individual bonds.

  9. Don Griswold

    You state “Zecco was one of the pioneers of online discount stock brokers.” , the firm is approx. 5 years old ( online discount brokers started out inthe early 1980’s). What criteria are you using to define them as pioneers?

  10. Size Trader

    What this analysis completely ignores is margin interest rates. Sogo is reasonable but the rest of them charge exorbitant rates.

    For low rates and reasonable commissions, look at, and You may pay (literally) a few dollars more per trade but you will save many thousands on interest.


  11. Gail Balcaen

    Just wanted to let you know, this Page(s) of information is the best I’ve ever come across to help me find solid, valid solutions to the problem of where to go to start investing my own money with Security, Expertise and Economy. Thank you, so-o MUCH !!! – – – CHIQUITA VIVA aka Gail Balcaen, Saskatoon, SK S7M OZ8 CANADA

  12. I believe is a great options trading broker. They have a great desktop platform and the data feeds are free with your trading account. If you are trading options, seriously consider, which was curently purchased by TD Ameritrade.

  13. Ivan Basic

    I am kind a professional, but I stick to the equities. I am from Europe and interesting for Toronto and Germany. I like to day-trade, sell short, I want to skip additional cost like custodian fees. Any suggest?
    Btw. If you trade with futures, could you trade them intraday and could you do that each day?

    Tnx in advance!

  14. Hello,
    I’m very high on Scottrade. I have been with them for over 10 years with out any troubles at all. If you would like to try them out you can get 3 free trades just to see if you like them They have a good streamer.. They are all anybody would ever need.

    Happy trading !!!


  15. Randall

    TDAmeritrade is one of the best on-line discount brokers. One feature that makes them high on the list is their no fee list of ETFs where you can purchase as little as one share for no cost. They also have the longest list of ETFs with this feature. You do have to hold your purchases for more than 30-days to avoid a $19 early trading fee. That is a small penalty for having access to a list of 100+ outstanding ETFs.

  16. Marilyn

    My husband and I are in T. Rowe Price funds. I am retired (60), and my husband will retire in august. He is 57. We were told to kick up domestic value stock (20%). Any recommendations?

    • Rob Berger

      Marilyn, increasing domestic value stock seems like an odd suggestion. Not that it is “wrong,” but rather that without more context, it’s difficult to evaluate. Do you have more details you can provide.

  17. Dale Harp

    I have managed to save pretty well, and the thought of investing have stayed on the back burner for some time. Now, I am ready to invest, yet all I read is “…dark pools,…large institutional high frequency trading,…algorithms,…..the market is rigged…”.

    It’s interesting how our SEC never sees anything. Example: Bernie ‘Madoff’, for years scalped investors for billions, under the nose of the SEC. Now, the flash crash. Yet again, our SEC stands and hears, and sees nothing.

    I may dig my hole and ‘safely’ bury my money, yet again.

    • Rob Berger

      Dale, if that’s all you read, you need to read something else! Yes, there are bad people and bad investments on Wall Street. But there are also great businesses with great management that make excellent investments.

  18. Jenny Johnson

    Hello Rob,

    Thanks for sharing such a vast wealth of information. I Notice yours research/publication was back in 2009. Would you rate those company the same way today. Are there any new companies you would like to add to the list?

  19. What about Robinhood? It offers free stock trading… Obviously nothing is truly free, but at first glance, they don’t seem to make money directly off of me, unless I keep cash just sitting in my investment account instead of the market… Can you comment?

    • Rob Berger

      K, Robinhood does offer free trades. That might be ideal for an active trader. For those who trade at most occasionally, however, the trading costs are not the most important factor.

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