Online Discount Stock Brokers - Compare and Review
Finding information for online stock brokers isn’t easy. Every company is unique and the important things aren’t always obvious. To complicate things even more, companies that review brokers provide contradictory comparisons. For example, the top pick for SmartMoney in 2007 wasn’t even on JD Power’s list. Not to be outdone JD Power’s top pick is dead last in SmartMoney’s review. With these kinds of reviews it’s difficult to come to any definite conclusion on who’s the best. I’ve tried to be objective and pick the best brokers based on a broad range of factors. The research also made it clear that different brokers are better for different kinds of trading.
To make this concise there are some companies I deliberately left off. The three reasons most companies didn’t make the list is that they 1) didn’t have a mature offering 2) they weren’t technically online discount brokers 3) They were so close in price and offering to other players that including them would have been redundant. For example, Ameriprise is not on the list because they aren’t a true discount broker. They are more interested in using financial advisors instead of individuals trading. Another one I left off is BuyandHold.com due to their oversimplified offering. Lastly, there are many companies I left off because their pricing all hovered around $19.95/order and their offering was very close to Wells Fargo or Vanguard.
This list is a sample of the market in general with emphasis on unique discount stock brokers. Here are the results:
Best all around winner: TRADEKING.com
Pros:
- Very low online trading cost $4.95
- Lowest broker assisted trades at $4.95
- No minimum balance required
- Lowest amount of fees compared to other brokers
- IRA friendly with no maintenance fee.
- Trade Stock, Options, Mutual Funds, Bonds, and CDs
- Top rated website for usability.
- Generous interest rate on cash balances
- Best interest rates on margin accounts for small and medium accounts
- Full suite of investing tools
- No gimmicks or subscriptions to get the best price and service
Cons:
- They are lower on their cash balance interest rate than Sharebuilder’s money market sweep. But it’s only by 0.7%.
- For accounts with $1 Million+ OptionsXpress and Fidelity’s Margin interest rate is 5.25% instead of TradeKings flat rate of 7.25%. If you have less then a million dollars in your account TradeKing smashes the competition in their margin interest rate.
- If you trade heavily with options they are second place to Zecco’s price.
- No checking or debit card.
Absolute Low Cost Leader: ZECCO
With Zecco there are no minimum balances to open an account. To get 10 free trades a month a $2,500 minimum is required. They have very little fees with the exception of a 30 annual fee on IRA accounts. When I signed up for Zecco the paperwork was a nightmare but I think they’ve fixed that now. They seem to be adding more and more to their offering and will be a viable broker into the future.
Long term stock investing:SOGOINVEST.com
Only $3 in and out for stock purchases. No maintenance fee on IRA or any other accounts. Allow fractional share purchases, automated stock purchases investing, and dividend re-investment. The only downside is a $2,500 minimum investment.
Most diverse trading:OptionsXpress.com
Actively trade Stocks, Futures, Mutual Funds, Advanced Orders, Contingents, Options, Bonds, Spreads, ETFs, and SSFs. They are very competitive on pricing across the board with extra low cost on option trading. No unexpected fees and no maintenance fee on IRAs or any other account.
Best mid-range broker: Scottrade.com
This is for the best broker that is in the middle between Premium and Standard discount brokers. Scottrade offers competitive rates with a lot of service and tools. They have the most physical branches than anyone else in the country. Scottrade is a broker that you can grow into and still feel comfortable with. They accommodate the small and large accounts nicely.
These are the complete numbers from the research:
Stock and Equity Trades
|
Base Rate
|
Phone Order
|
Broker Assisted
|
|
| Bank of America |
14.00
|
32.50
|
42.50
|
| Charles Schwab |
12.95
|
12.95
|
32.95
|
| E-Trade |
12.99
|
N/A
|
52.99
|
| Fidelity |
19.95
|
0
|
0
|
| Firstrade |
6.95
|
16.95
|
26.95
|
| OptionsXpress |
14.95
|
N/A
|
14.95
|
| Scottrade |
7.00
|
17.00
|
27.00
|
| Sharebuilder |
4 Buy/15.95 Sell
|
N/A
|
N/A
|
| SogoInvest |
3.00
|
N/A
|
N/A
|
| TD Ameritrade |
9.99
|
34.99
|
44.99
|
| TradeKing |
4.95
|
N/A
|
4.95
|
| Vangaurd |
25.00
|
40.00
|
45.00
|
| Wells Fargo |
19.95
|
19.95
|
44.95
|
| Zecco |
4.50
|
N/A
|
19.99
|
| AVERAGE |
11.87
|
24.91
|
32.47
|
Account Details |
|||||
|
Minimum Balance
|
Fractional Shares
|
Branches
|
Inactivity Fee
|
Sign-up Bonus
|
|
| Bank of America |
0
|
-
|
Bank
|
100
|
-
|
| Charles Schwab |
1,000
|
-
|
303
|
0
|
-
|
| E-Trade |
1,000
|
-
|
28
|
160
|
-
|
| Fidelity |
2,500
|
-
|
118
|
0
|
-
|
| Firstrade |
0
|
-
|
-
|
0
|
Yes
|
| OptionsXpress |
0
|
-
|
-
|
0
|
-
|
| Scottrade |
500
|
-
|
326
|
0
|
-
|
| Sharebuilder |
0
|
Yes
|
-
|
0
|
-
|
| SogoInvest |
2,500
|
Yes
|
-
|
0
|
-
|
| TD Ameritrade |
1,000
|
-
|
103
|
0
|
Yes
|
| TradeKing |
0
|
Yes*
|
-
|
0
|
-
|
| Vangaurd |
4,000
|
-
|
-
|
30
|
-
|
| Wells Fargo |
1,000
|
-
|
Bank
|
60
|
-
|
| Zecco |
0
|
-
|
-
|
0
|
-
|
*Only with dividend reinvestment
Option Cost & Margin Rate |
||||||
|
Option Trading Costs
|
Margin Interest Rates
|
|||||
|
Base
|
Per Contract
|
Exercises
/Assign. |
Under 10K
|
50-100K
|
1 million +
|
|
| Bank of America |
19.95
|
1.50
|
42.50
|
?
|
?
|
?
|
| Charles Schwab |
9.95
|
0.75
|
10.75%
|
8.50%
|
7.50%
|
|
| E-Trade |
12.99
|
0.75
|
19.99
|
9.49%
|
8.49%
|
6.49%
|
| Fidelity |
19.95
|
0.75
|
?
|
10.33%
|
8.83%
|
5.25%
|
| Firstrade |
6.95
|
0.75
|
?
|
9.00%
|
8.75%
|
5.75%
|
| OptionsXpress |
0.00
|
1.25
|
?
|
9.50%
|
7.75%
|
5.25%
|
| Scottrade |
7.00
|
1.25
|
17.00
|
9.75%
|
8.75%
|
7.25%
|
| Sharebuilder |
15.95
|
1.00
|
30.00
|
10.50%
|
8.00%
|
7.50%
|
| SogoInvest |
N/A
|
N/A
|
N/A
|
9.50%
|
9.25%
|
7.00%
|
| TD Ameritrade |
9.99
|
0.75
|
19.99
|
11.00%
|
9.25%
|
8.25%
|
| TradeKing |
4.95
|
0.65
|
9.95
|
7.25%
|
7.25%
|
7.25%
|
| Vangaurd |
30.00
|
1.50
|
$30 + $2.50
|
?
|
?
|
?
|
| Wells Fargo |
9.95
|
1.00
|
34.95
|
9.50%
|
8.25%
|
7.25%
|
| Zecco |
4.50
|
0.50
|
4.50
|
7.95%
|
7.45%
|
7.45%
|
Cash Issues |
||||||
| Cash Balance Interest Rates | Accessing Cash | |||||
|
Under 5K
|
50-100K
|
1 million +
|
Check Writing
|
ATM
|
Bank Account
|
|
| Bank of America |
?
|
?
|
?
|
-
|
-
|
Yes
|
| Charles Schwab |
0.50%
|
0.50%
|
2.05%
|
-
|
-
|
Yes
|
| E-Trade |
0.05%
|
2.65%
|
3.50%
|
Yes
|
Yes
|
Yes
|
| Fidelity |
?
|
?
|
?
|
Yes
|
Yes
|
Yes
|
| Firstrade |
1.50%
|
1.75%
|
2.00%
|
-
|
-
|
Yes
|
| OptionsXpress |
3.76%
|
3.76%
|
3.76%
|
-
|
-
|
Yes
|
| Scottrade |
0.50%
|
3.25%
|
4.75%
|
Yes
|
-
|
Yes
|
| Sharebuilder * |
4.18%
|
4.18%
|
4.18%
|
-
|
-
|
Yes
|
| SogoInvest |
1.25%
|
2.25%
|
3.25%
|
-
|
-
|
Yes
|
| TD Ameritrade |
0.05%
|
0.30%
|
1.85%
|
-
|
-
|
Yes
|
| TradeKing |
3.41%
|
3.41%
|
3.41%
|
Yes
|
-
|
Yes
|
| Vangaurd |
?
|
?
|
?
|
-
|
-
|
Yes
|
| Wells Fargo |
?
|
?
|
?
|
-
|
-
|
Yes
|
| Zecco ** |
4.08
|
4.08
|
4.08
|
-
|
-
|
Yes
|
*Sharebuilder uses DBMXX money market account.
**Zecco uses DWS Scudder money market accounts.
Mutual Funds Details |
||||||
|
Mutual Fund Trading Costs |
||||||
|
# of No |
No-Load No
Fee Program |
No Load Fee
|
Load Funds
|
|||
| Bank of America |
1,300
|
Yes
|
45
|
45
|
||
| Charles Schwab |
2,000
|
Yes
|
49.95
|
49.95
|
||
| E-Trade |
1,175
|
Yes
|
19.99
|
19.99
|
||
| Fidelity |
1,400
|
Yes
|
19.95
|
19.95
|
||
| Firstrade |
Yes
|
9.95
|
0
|
|||
| OptionsXpress |
N/A
|
No
|
14.95
|
14.95
|
||
| Scottrade |
1,150
|
Yes
|
17
|
17
|
||
| Sharebuilder |
N/A
|
No
|
N/A
|
N/A
|
||
| SogoInvest |
N/A
|
No
|
N/A
|
N/A
|
||
| TD Ameritrade |
1,300
|
Yes
|
49.99
|
0
|
||
| TradeKing |
-
|
No
|
14.95
|
14.95
|
||
| Vangaurd |
N/A
|
No
|
N/A
|
N/A
|
||
| Wells Fargo |
800
|
Yes
|
35
|
25
|
||
| Zecco |
-
|
No
|
10
|
N/A
|
||
IRA Details |
||
|
IRA Costs
|
||
|
Annual Fee
|
Termination
|
|
| Bank of America |
0
|
75
|
| Charles Schwab |
0
|
0
|
| E-Trade |
160
|
60
|
| Fidelity | ||
| Firstrade |
0
|
0
|
| OptionsXpress |
0
|
0
|
| Scottrade |
0
|
0
|
| Sharebuilder |
25
|
50
|
| SogoInvest |
No IRA Available
|
|
| TD Ameritrade | ||
| TradeKing |
0
|
50
|
| Vangaurd |
30
|
|
| Wells Fargo |
30
|
50
|
| Zecco |
30
|
30
|
April 13th, 2008 at 8:18 am
great page, thanks!