How Do Online Stock Brokers Compare To Each Other? A Comprehensive Comparison
StockHax’s mission is to make the world of online investing and stock trading easy and accessible, which means whittling through the plethora of online brokerage firms to see which ones win out.
So, we’ve pitted a number of reputable, high-quality online trading companies against each other in a series of one-on-one comparisons. If you’re torn between two options for your stock trading solutions, we might just have the answer for you.
Check out the list below to see how each online broker stands up to the other, as well as links to our longer analyses of these matchups.
Betterment vs. Wealthfront
Betterment is fantastic for traders who are attracted to the low fee structure, especially for higher-tier investors who plan to work with more than $100,000 in their accounts. Wealthfront, by contrast, is much better for long-term passive traders who don’t plan to have very big balances in their account (the first $10,000 is always free to manage).
Both Betterment and Wealthfront offer wonderful incentives for smaller and more inexperienced traders, as they effectively have no fees for those not planning on throwing a fortune into their investment careers. If you want to start low, go with Wealthfront; but if you want to aim a bit higher, try Betterment.
E-Trade vs. Scottrade
The choice between E-Trade and Scottrade simply depends on what you’re looking for. At first glance, E-Trade edges out Scottrade in a number of ways, such as investment options and online trading tools. The lower investment minimum requirement ($500 to Scottrade’s $2,500) is also pretty tempting for brokers just looking to get started.
However, Scottrade has a big advantages — their commissions are much, much lower, which adds up as you invest. In this game, saving money at all steps of the process is important, so you need to keep that in mind.
Betterment vs. Vanguard
Both of these services have their pros and cons. Betterment is so incredibly easy to use, but you might not get quite as much out of your investments as you would with Vanguard. Vanguard’s personal touch is quite admirable, but you have to pay more to get it.
In the end, Betterment and Vanguard alike will serve you perfectly well, regardless of your level of experience. Investors who feel more comfortable with a real broker by their side might want to choose Vanguard, but Betterment’s online solutions are extremely convenient and work for most people.
Vanguard vs. Fidelity
Judging the relative merits of both Vanguard and Fidelity, each seems to be good for different types of traders. Depending on the needs of the investor in question, it might be easy to choose between the two. If your trading style is a bit more aggressive, you’ll want to go with Fidelity — the low trade cost and its online trading platform favors traders who are more hands-on.
Traders who wish to be more conservative, however, might want to go with Vanguard. Most of the service’s mutual funds are index-based, which means they are not quite as actively managed by their advisors as you might think. If you want a slow, steady set of dividends that you can let others handle for you, Vanguard is your best option.
TradeKing vs. Scottrade
Scottrade’s advantages are many; first, they have a good deal more experience and clout in the stock trading business, and have the plaudits to back it up. Because they are so established, you can benefit from the kind of security that comes from investing with them, including their commission-free mutual funds.
For everyone else, though, TradeKing might well be the best option. The generally lower fees and lack of account balance offer much greater flexibility and short-term return on investment, even if the available options for mutual funds trading is slightly lower.
TD Ameritrade vs. E-Trade
At first blush, both TD Ameritrade and E-Trade provide a lot of the same advantages people might look for in their online investment platform. Both have consistently low, flat rates on trades; consistently affordable fees; and excellent customer service.
Looking at both brokers with a close lens, TD Ameritrade just barely brushes past E-Trade in terms of sheer availability of resources and trading options. That said, E-Trade has TD Ameritrade beat on commissions, even if by just a hair. TD Ameritrade’s online platform, meanwhile, is simply more affordable and accessible to those traders who don’t have huge balances.
Optionshouse vs. TradeKing
While OptionsHouse and TradeKing have their differences, they both appeal to essentially the same kind of trader — newer traders who are hoping to dip a toe in the water and maintain low-cost trading without the pressure to maintain a high account balance.
With their nearly identical flat fee structures plus robust online platforms, mobile connections and interesting research options, OptionsHouse and TradeKing alike seem to offer plenty of resources for the intermediate trader who knows what they’re doing and want to frequently trade. TradeKing’s Autotrade feature, in particular, is useful for traders who have a clear plan for their investments.
TIAA CREF vs. Fidelity
If you’re a teacher or in a TIAA-qualifying occupation, you’re likely to go for TIAA-CREF, as the infrastructure is already there for you to integrate your investments into your financial life.
Fidelity, on the other hand, is great for traders who want to be more aggressive and active with their portfolios. They’ve got the same low trade cost, along with a robust online trading platform, to help traders actively manage their funds in a way that allows them to gain substantial ROIs. If you want to go for options trading as your primary mode of investment, Fidelity just edges out TIAA-CREF at $2 less per trade (and $1.25 less per contract).
USAA vs. Navy Federal
For the most part, both USAA and Navy Federal (the latter in particular) are best used by investors who just want to get a basic plan set up and not think too much about it later.
Traders who value reputable customer service might do well to go with USAA, as their highly-rated customer service stands head and shoulders above Navy Federal, which has had some problems in the past with accessibility. Comparing 24/7 customer service (USAA) with effectively a single phone number to a financial advisor (Navy Federal) is no comparison at all.
TD Ameritrade vs. Fidelity
Traders who value quality customer service can choose between TD Ameritrade and Fidelity equally, depending on what exactly they’re looking for. If you want a more personal touch, try TD Ameritrade — their physical branches and personal investment assistance offer more customizable trading experiences. More modern, online-focused investors might want to favor Fidelity’s many reputable customer service options.
Overall, both TD Ameritrade and Fidelity are perfectly reputable brokerage companies with a lot to offer their customers. With TD Ameritrade, you get better, more varied technology and no minimum deposit, while Fidelity’s international dealings and slightly cheaper trades might attract more active, long-term investors.
Scottrade vs. Fidelity
Low-balance traders would do well to pick Fidelity over Scottrade; while Scottrade’s features are reputable, and their interface incredibly easy to use, many traders don’t have the $25,000 required to use its premium platform. And even the basic version of Scottrade has a $2,500 account minimum.
While Scottrade’s initial deposits and account minimums are high, they’re a great resource for beginning traders to start themselves off in the investment biz due to their slightly lower commissions. However, if you want to work mostly with ETFs or Fidelity-family mutual funds, Fidelity might be the way to go.
Scottrade vs. TD Ameritrade
In many respects, TD Ameritrade and Scottrade offer virtually identical features to traders of all types — robust trading platforms, versatile mobile apps, quality research and education, and competitive fees. They also both offer the ability to go to physical branches to receive personalized assistance with your account, though Scottrade’s physical presence is greater.
Either way you go, you’ll have a lot of high-quality support from either TD Ameritrade or Scottrade as reputable, affordable online brokers. Whether you want better investment options, or better trading technology, or cheaper rates, each company beats the other out by a small margin, so finding the best company between the two is just a matter of degrees.
E-Trade vs. Fidelity
On the whole, active traders would do well to choose E-Trade. Their three-tiered commission system and fee structure heavily favors more active traders, as they can easily reach that $6.99 fee level and save just that much more than Fidelity.
Fidelity Investments is best or traders who want to stay similarly active, but want to be able to get their advanced platform without being a quarter-millionaire. Further, they’re better for traders who are focused more on mutual funds, due to their overall greater selection and wider range of no-load funds.
Fidelity vs. Schwab
Fidelity is a fantastic pick here, especially for active traders. You have access to an amazing trading platform in Active Trader Pro, and their commissions are just that much lower than Schwab. In the long run, with enough trades, you’ll likely get your money’s worth out of them.
Schwab’s combination of commission-free ETFs, low-minimum mutual funds, and top-quality research makes it the ideal pick for most traders, regardless of experience. Beginner traders will find their Intelligent Portfolios and easy-to-access platform user-friendly, while advanced traders can take advantage of Schwab’s many complex features and advanced tools.
Sharebuilder (Capital One Investing) vs. Scottrade
In the long run, Scottrade wins out for budget-minded brokers who still want some quality interaction with their accounts — they have better trading tools, more highly rated customer satisfaction, and a greater number of free services available.
Sharebuilder is also good for certain types of clients who have very specific needs. For instance, traders who want to automate their investments can take advantage of their automatic investment plans. Traders who want to buy a stock and just hold onto it can get a lot of mileage from Capital One Investing, particularly with PortfolioBuilder.
Scottrade vs. Vanguard
Scottrade’s low, flat $7 commission rate makes trades easy to justify and calculate, and it’s one of the more affordable rates out there, making it even more attractive to traders of all kinds.
Vanguard, meanwhile, has the better ETF options, which is always nice, and their personal advisor service for high-balance investors is a great way to keep your investments smart while not having to micromanage your accounts. However, it can be a bit of a struggle for beginner traders, as their education tools are lackluster, and the fee structure is complicated.
TradeKing vs. E-Trade
Between TradeKing and E-Trade, TradeKing comes out ahead in a lot of categories. Not only are their commissions some of the lowest in the business, beginner traders will find their numerous resources quite helpful in getting their investing careers started. They also require no minimum account balance, which makes them far more flexible than most other options.
E-Trade isn’t without its appeals, either; they offer some of the best bonds rates on the market, and their system rewards high-balance, buy-and-hold traders who want to sit on investments for awhile and keep them going for years.
Sharebuilder (Capital One Investing) vs. E-Trade
Sharebuilder provides a particularly advantageous set of features for traders who want to just set it and forget it — their automatic investing plans make it easy for traders to just buy-and-hold their shares. Asset allocation tools like PortfolioBuilder also help traders of all stripes secure a good portfolio they can just let run automatically, enjoying rock-bottom trade commissions along the way.
E-Trade, meanwhile, is better for long-term, infrequent investors, due to their competitive commission rates and so on. Ironically enough, their tiered fee structure also makes them ideal for active traders, as does their advanced platform E-Trade PRO. If you want to take advantage of the best E-Trade has to offer, you have to commit yourself to trading often and having a high balance.
What Should I Be Looking For in an Online Broker?
We at StockHax look at a few different categories when assessing the quality of an online broker — features, fees, asset allocation, investment options and what kinds of traders they’re meant for. When evaluating an online brokerage firm, you should look for a perfect balance of low fees, decent features, tools for trading, asset allocation, and research/education, among others.
Are you a new trader just starting out in the game? Or an experienced trader looking for a better deal or more incentives to be active? Whichever kind of trader you are, you have different priorities to consider. Active traders should keep an eye out for companies that provide low commission fees so your multiple trades don’t take too much extra cash.
Casual traders, meanwhile, can benefit from companies that don’t charge account maintenance fees or require trading minimums to access premium content like advanced trading platforms. It’s also best to find brokers that don’t charge a large initial deposit, especially if you don’t have much to start out with. Investments always build over time, so there’s nothing wrong with starting small.
Whether you’re an active trader who wants to take matters into their own hands, or a beginner who just want a no-fuss way for retirement, look through the online brokers available to you to find the perfect storm of functionality and price you need to start your trading career with a bang.