Online Brokerages

Discover the Magic of Online Brokerages

The Individual Retirement Account (IRA) is a self-directed investment account. Put simply, you can use an IRA to fully specify which investments you want and which trustees you want to manage them. Fortunately, passive investors and even active traders  can use online brokerages as trustees to handle their IRAs. Check out some of the best online brokerage firms at your disposal.

Some of the Best Online Brokerages

Know your trading style? Not yet sure how to trade? Make no mistake—choosing the right online brokerage is an important decision. After all, some online brokerage firms are better than others, which will impact the way you invest online. Therefore,to provide some insight, we’ve separated the top online brokers into categories.

Charles Schwab — The most appropriate for an IRA. This company holds a reputable and established financial history with a massive $3 trillion worth of client assets. It was founded in 1973, but successfully transitioned into the digital era with its excellent trading platform that offers extensive planning tools for retirement. With the aptly named Schwab Insights, you receive vital market research from Schwab’s 26 in-house financial gurus. More importantly, this brokerage has no minimum deposit requirement, no fees for stock trades and Exchange Traded Funds (ETFs), and a $0.65 option trade fee per contract.

Interactive Brokers — Professional traders know this online brokerage well. This year, Interactive Brokers left behind their stock trading fees and option trading fees. In addition to reducing the minimum deposit to zero. If you want global access to marketplaces, there is no better option than Interactive Brokers. They have offices in 26 countries with over 135 markets, providing the most diversified collection of ETFs, mutual funds, and securities.

Fidelity — Due to its 16 outstanding market analytics tools, Fidelity is quickly becoming the best online stockbroker. You will never have to fear that lack of investment research tools will cost you money with Fidelity. Furthermore, alongside standard zero-commission stock trades and zero minimum deposit, you will enjoy Fidelity’s sleek and intuitive retirement management. To round out its excellent offering, Fidelity gives its user fantastic educational resources.  

TD Ameritrade — Excellent choice for beginner traders. Offering a full suite of easy-to-use tools for trading and researching stocks, TD Ameritrade offers over 200 guides in the form of short educational videos. This gamified mini-university covers every aspect of stock trading. Fully adapted to the current year, its think-or-swim tech platform is the only one to provide linking to Twitter, Alexa, Facebook, and Apple Chat. Suffice to say, TD Ameritrade is the best brokerage company for beginners with no commission fees, advanced technology, and in-depth market research capabilities.

Advantages of an Online Brokerage

  • No barrier to entry—low to zero trading fees have ensured the democratization of high finance. What was previously only reserved for the privileged—a personal financial advisor—is now accessible to everyone for almost no cost.
  • You can keep as much control over your investments without any intermediaries.
  • You can promptly react to the market’s ups and downs, which greatly hones your skills in short-selling and day trading.
  • Deep market research tools are created by the smartest minds in the financial domain. They allow you to remove doubt when committing a trade.
  • Online brokerages eliminate broker bias, as they no longer rely on communication with persons who are inclined to sell you their financial products to receive commissions.

Disadvantages of an Online Brokerage

  • Constant access to market tools and trading may have you always chasing returns, no matter how many failed trades you conduct.
  • Overexposure to stock market data may result in overinvesting and overselling.
  • Connectivity lag may result in errors such as doubly committed trades. Thankfully,most brokers have accounted for this by tweaking the interface.

What to Consider when Choosing an Online Brokerage

If you are interested in building your retirement strategy around an IRA, you should prioritize it when choosing an online brokerage. Otherwise, online brokerages are pretty similar and the market is pretty competitive at the moment. All have dropped their trading and minimum deposits to zero, with some slight variation in options trading.

Hence, you are left to consider the company’s history and legacy. Does it have deep pockets, does it employ experts who give you market quotes every week, integrated education resources, and intuitive interface across the board. The above-listed best online trading platforms will not disappoint.

Online Brokerage FAQ

What is an Online Brokerage

An account that connects you to the markets via sophisticated trading apps. With these apps, you can not only engage in investing in stocks, mutual funds, options, and ETFs but also grasp the stock market with analytics tools and educational material.

How to Choose an Online Broker?

Pick your stock trading style. Do you want to engage in short-selling as a daily trader or use your online broker as a means to your retirement? The former will require constant immersion into market charts and numbers, taking up much of your valuable time. The latter is a more relaxed set-and-forget approach.

Afterwards, gauge your own learning abilities. Can you understand the stock market by yourself, or do you want a full-service brokerage instead of a discount brokerage?

Verify if an online brokerage is a FINRA (Financial Industry Regulatory Authority) member. Additionally, check the average wait time for customer support services. Many sites have collated this data into tables.

Lastly, pick online brokerages with little to zero trading fees for a variety of assets, such as stocks, ETFs, mutual funds, and options.