When first learning how to invest, one of the most important lessons to learn — right up there with “buy and hold” and “don’t try to time the market” — is to avoid commissions and fees. Fees for trading stocks eat into your nest egg, using up money that would otherwise be growing with compounding interest.
Fortunately, if you’re willing to narrow your scope, you can take advantage of options for stock trading without paying fees or commissions.
Here’s a look at the best online brokers for free stock trading and the top free trading platforms out there.
|6 Best Brokers for Free Stock Trading|
|Robinhood||No trading fees on stocks and ETFs||Relevant SEC & FINRA fees might apply|
|Charles Schwab||ETFs||Over 200 commission-free ETFs|
$4.95 commission on all other online ETF trades
|E-Trade||No load, no transaction fees for mutual funds||$49.99 fee on redemptions or exchanges of funds that are held less than 90 days|
|Fidelity||No load or transaction fees for mutual funds||10,000 mutual funds available to trade without fees|
|Merrill Edge||$0 dollar for mutual fund transaction||$39.95 short-term redemption fee applies if the|
fund is held less than 90 days
|TD Ameritrade||ETF and option trading|
Mutual fund trading with no commission fee
|For ETF and option trading, offer valid for one new Individual, Joint or IRA account opened by 9/30/2018 and funded with $3,000 or more within 60 calendar days of account opening|
For mutual fund trading, no-transaction fee funds (except ProFunds and Rydex) held 180 days or less subject to a Short-Term Redemption fee of $49.99, in addition to any fees addressed in the fund’s prospectus
Best Brokers for Free Stock Trading
“There is no such thing as free lunch” is a basic economic principle that says that free services in one place yield higher costs elsewhere. And although that’s true, consumers can potentially take advantage of these offers while avoiding the services where brokers make their money, essentially letting other investors pay their way. After all, if you’re going to learn to invest, you should learn how to do it at the lowest cost you can with as much commission-free trading as you can manage.
Review the details on the best brokers for free stock trading so you can better decide which is best for your investing strategy.
Best Broker for Free Stock Trading: Robinhood
Robinhood comes with the fewest catches for trading stocking and paying nothing, making it the closest to truly free investing of any of the options on this list. The app was built by technicians who had previously designed high-frequency trading platforms for Wall Street investment banks and realized the sort of minimal-cost investing that the major institutions enjoy could be extended to the general public.
Robinhood allows for free stock and ETF trades and has no minimum deposit, but those perks do come at a cost. Robinhood removes most other frills, including tools and research like most other brokers offer. What’s more, you’re limited to just buying a selling stocks and ETFs in a brokerage account, so that means no mutual fund offerings and no retirement accounts.
The no-fee trading offered by Schwab is limited in its scope, with about 200 ETFs available for zero-commission trading through Schwab ETF OneSource. But that absence of choices is only a liability if you have your heart set on specific ETFs. Schwab’s list of commission-free ETFs still offers plenty of options, and that can make for a free ride for ETF investors willing to accept shopping off of Schwab’s list.
Avoid These: Worst Fees in America
E-Trade has no-commission trades for anything off its list of fee-free mutual funds or ETFs. That does limit your options some, but the selection of ETFs offered without commission is robust, with a variety from almost 20 different fund companies including iShares, Global X, Direxion, Vanguard and WisdomTree. Likewise, the site also offers over 4,400 different no-load, no-transaction-fee funds that you can trade without paying a commission as you build your online portfolio.
Fidelity allows you to trade no-load or no-transaction fee mutual funds without paying commissions, much like TD Ameritrade, Merrill Edge and E-Trade. In Fidelity’s case, that means you’ll have a list of some 10,000 different mutual funds to select from. Clearly, if you’re interest in minimal maintenance fees on your funds or hand-picking stocks, Fidelity might not be the best choice for you in terms of free trading.
If you only trade mutual funds and like Fidelity’s platform, though, you could trade for free almost indefinitely.
Like E-Trade, Merrill Edge will let you trade no-load mutual funds without paying transaction fees. Additionally, you can qualify for up to 100 free trades a month when you’re a Preferred Rewards Platinum or Preferred Rewards Platinum Honors client — which requires banking with Merrill Lynch parent company Bank of America and maintaining a high account balance. For consumers who qualify, it can be another way to avoid paying commissions.
TD Ameritrade offers completely free trading of stocks and ETFs — just like Robinhood — but with the robust trading platform and resources. And if that sounds too good to be true, it is — sort of. That free trading is temporary — it’s a promotion available for just 60 days when opening an account with a deposit of $3,000 or more. You can also score up to $600 in bonus cash with larger deposits, and there’s indefinite free trading on no-commission mutual funds.
So, if you have an investing strategy that involves a lot of early trading activity before tapering off and then focusing on mutual funds, TD Ameritrade’s promotional offer might make for an ideal choice.
More on Investing and Brokerages
- 12 Essential Money Tips for Every Phase of Your Financial Life
- It’s Time to Ditch Your Stock Broker and Invest Through a Credit Union
- Best CD Rates From Vanguard, Fidelity and Other Brokerages
GOBankingRates is a personal finance and consumer interest rate website owned by ConsumerTrack, Inc., an online marketing company serving top-tier banks, credit unions, and other financial services organizations. Some companies mentioned in this article might be clients of ConsumerTrack, Inc., which serves more than 100 national, local and online financial institutions. Rankings and roundups are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone and have not been reviewed, approved, or otherwise endorsed by the companies included in the article. All fees and rates are subject to change at the issuers’ discretion, and some bonus offers might no longer be available on the issuers’ websites, depending on how you access the web page.