Login

New to Benzinga?

Register

Already have an account?

Best Online Brokers for ETF Investing

The more popular ETFs have become, the more they’ve popped up. Here’s a look at the best online brokerages for ETF investors.

Investors who want to get exposure to the high returns of the stock market without risking the potential downside of individual stocks are increasingly choosing to invest in exchange-traded funds, or ETFs. 

Quick look – Best online brokerages for ETF investing

What is an ETF?

While mutual funds are priced just once a day based on their net asset value, ETFs trade on public exchanges just like stocks, making them extremely liquid and tradable.

But instead of a single stock, ETFs are funds that invest in dozens or hundreds of stocks, commodities and/or other securities all at once, allowing investors to achieve major diversity all in one swoop

There are two types of ETFs: index-based ETFs and actively managed funds. 

Why buy ETFs?

For some, ETFs are the right choice. Here’s why you may want to invest in them: 

  • Limit risk: Investing in a basket of stocks versus an individual stocks spreads risk around.
  • Save time: You don’t have to do the research on each individual company’s stock.
  • Have lower fees: For the most part, ETFs have low fees, but pay attention to the expense ratio.
  • Bought and sold during market hours: Unlike mutual funds, you don’t have to wait until the market closes to trade ETFs.

Here’s what you’ll have to watch out for. You can check the ETF’s prospectus via a Google search or the SEC’s EDGAR for this information:

  • Objective: What is the fund trying to achieve.
  • Historical performance: Not all ETFs are created equal. Check out the ETFs performance over time before you invest.
  • Investment strategy: How will the funds be managed and achieve its objective.
  • Risks involved: Specific risks should be outlined in the prospectus.

What to look for in an ETF brokerage

If you decide that you want to invest in ETFs, you’ll have to open a brokerage account. Both the big and small name brokerages offer ETF investing and the number of options can be a little overwhelming.

Here’s what to look for before you open an account to invest in ETFs:

  • Low commissions: Most ETF brokers offer some form of free trading or commissions for new clients. If the brokerage does charge commission, it usually hovers around $5 per trade.
  • Selection of ETFs: The bigger the selection, the better. Some brokerages offer over 200 ETFs to choose from.
  • Research: The brokerages should make it easy to look up data about the ETFs they offer. This includes the origin, objective, strategy, and historical performance.

Now that you understand a bit more about ETF investing and brokerages, take a look at our picks.

Best overall

Best For
  • Beginner investors
  • Advanced traders
  • Investors seeking commission-free etfs

Charles Schwab

No matter how many ways you look at it, 245 commission-free ETFs is tough to beat. But if you add low expense ratios, Schwab’s ETF Portfolio Builder tool, its quarterly list of prescreened ETFs and its world-class customer service team, Schwab becomes the top online destination for ETF investors.

Investors can customize a portfolio of ETFs based on their personal risk tolerance and financial goals. They can also browse through the categorized prescreened ETF lists and make sure their portfolio covers all the bases.

Schwab is still actively adding offerings to its commission-free ETF OneSource program, and investors never have to worry about early redemption fees. Outside of the program, commissions are free, expense ratios are low, and face-to-face feedback is as easy as going down to the local branch. Schwab has everything an ETF investor could ever want and offers a great starting point for retirement investors.

Read Benzinga’s full Charles Schwab Review

Best for commission-free ETF investing

Best For
  • Active traders
  • Beginners looking to start trading
  • Low fees
  • Penny stocks

Ally Invest

Ally Invest, one of Benzinga’s favorite online brokerages, started offering over 100 commission-free ETFs on its online trading platform.

Ally Invest‘s commission-free ETFs include the WisdomTree Smart Beta ETFs, iSHARES, and most of their popular ETFs. In order to trade free, you’ll have to hold the ETF for at least 90 days. If you sell before the 90 day period is up, you’ll be charged a $9.90, which is basically equivalent to their standard pricing for a buy and sell.

Outside of the commission-free ETFs, the standard pricing with no minimum balance is $4.95 per ETF trade. The select pricing, if you have a minimum balance of $100,000, is $3.95 per ETF trade.

On top of commission-free ETFs, Ally Invest currently holds promotions for sign-on bonuses, has great customer service, and mobile experience.

Read Benzinga’s full Ally Invest Review

Best For
  • Beginner investors
  • Advanced traders
  • Investors seeking commission-free etfs

Charles Schwab

Many brokers offer a handful of commission-free ETFs, which are funds typically geared toward retirement investors. However, Charles Schwab is the gold standard of commission-free ETFs, gets roughly 245 different funds from which to choose.

Schwab’s ETF OneSource program is still growing as well. As recently as July 2017, Schwab added 15 new free ETFs to its program. OneSource provides ETFs from 16 different providers that cover 69 different Morningstar asset categories, including equities, fixed income, international and commodities.

The cherry on top of the commission-free Schwab sundae is that there are absolutely no early redemption fees, meaning investors can buy and sell what they want when they want and not worry about being charged an arm and a leg.

Read Benzinga’s full Charles Schwab Review

Best For
  • Mobile traders
  • Traders looking for research and data
  • Investors looking for retirement planning guidance

E-Trade

Like its competitors, E-Trade offers over 250 commission-free ETFs, including some of the most popular ETFs among traders.

E-Trade makes doing ETF research easy, too. Their comprehensive list of ETFs tracks historical data from ETFs in a variety of asset classes in one easy-to-use webpage. Quotes are only delayed by about 15 minutes, too, making the data truly actionable.

If you’re looking to trade outside the of the commission-free ETFs, E-Trade charges $6.95 per ETF trade. This rate is a few dollars higher than their competitors, so if you’re looking to trade outside of the free ETFs, keep this in mind.

Read Benzinga’s full E-Trade Review

 

Best For
  • Beginner investors
  • Advanced traders
  • Investors who want portfolio-building advice.

TD Ameritrade

TD Ameritrade currently offers over 300 commission-free ETFs. Like E-Trade, TD Ameritrade’s ETFs are coupled with Morningstar research so investors can make most informed decisions. You’ll find today’s price change, last price, gross expense ratio, net expense ratio and ratings on one easy-to-understand page.

iShares, Wisdom Tree, and First Trust are among some of the popular ETFs that TD Ameritrade offers.

TD Ameritrade is one of Benzinga’s favorite online brokerages. It’s known for its great trading platform, technology, and excellent customer support.

Read Benzinga’s full TD Ameritrade Review

 

Best for beginners

Best For
  • Beginner investors
  • Advanced traders
  • Investors seeking commission-free etfs

Charles Schwab

Many ETF investors are retirement investors looking for funds to buy and hold. These investors may not necessarily be the savviest traders.

Charles Schwab makes ETF investing simple and cheap and provides plenty of guidance and support for new investors. Schwab charges just $4.95 per ETF trade, which is very competitive given the amount of resources available on its platform. In addition, it has 24/7 phone and email support, as well as live online chat and more than 300 local branches where investors can go and get face-to-face guidance.

But maybe the best part about ETF investing with Schwab is the 245 commission-free ETFs the firm offers for customers. Sure, $4.95 per trade is cheap, but there’s no beating free trades! You don’t need to be a Wall Street guru to start investing in ETFs with Schwab, and it won’t break the bank, either.

Read Benzinga’s full Charles Schwab Review

Best ETF robo-advisor

Best For
  • Passive investors
  • Lower fees
  • Beginning investors
  • Investors who don't want to manage money on their own

Wealthfront

For investors who are looking to leverage the full power of diversification and technology, letting the Wealthfront robo-advisor manage your portfolio of ETFs could be the best option.

Wealthfront offers ETFs from 11 different asset classes, including emerging market stocks, real estate, commodities, and government bonds. Wealthfront’s trading algorithm automatically rebalances the portfolio when assets generate uneven returns. It also reinvests dividends, adjusts to changing market conditions and automatically takes advantage of tax-loss harvesting opportunities. Aside from fees, mismanaging taxes is one of the most common reasons long-term investors miss their targets.

The average expense ratio of Wealthfront ETFs is only 0.12 percent. In addition, Wealthfront manages the first $10,000 of customer assets completely free of charge.

For investors looking for a set-it-and-forget-it portfolio, Wealthfront is the place to be. Just open up an account, set your personal preferences, and let the algorithm do all the heavy lifting.

Wealthfront also topped Benzinga’s Best Robo-Advisors list for 2018.

Read Benzinga’s full Wealthfront Review

Best ETF research

Best For
  • Retirement investors
  • Active traders
  • Premium research
  • Low fees
  • No-transaction-fee mutual funds

Fidelity

For ETF investors tired of scouring the internet looking for tradable news or fed up with trying to piece together an understanding of the market one metric at a time, Fidelity is the best one-stop research source out there. Fidelity offers market research from 20 different providers.

Users get access to analyst ratings, specialized ETF reports, Equity Summary Scores, and even mutual fund fact sheets.

Fidelity offers 91 commission-free ETFs, and its personalized research quiz allows customers to get access to the research that matters and not get overwhelmed with useless information.  

With so many ETFs out there, it can be difficult to know which ones are the best choices for long-term investors. Top-tier research can provide the information and confidence ETF traders need to put their great investing ideas to work.

Read Benzinga’s full Fidelity Review

Best broker for active ETF traders

Best For
  • Retirement investors
  • Active traders
  • Premium research
  • Low fees
  • No-transaction-fee mutual funds

Fidelity

Fidelity offers all the tools advanced ETF traders need at a cost of only $4.95 per trade. Fidelity also provides roughly 100 commission-free ETFs that can be a godsend for active traders, as long as they make sure to avoid the $12.95 early redemption fee for iShares funds.

When it comes to trading tools, Fidelity offers advanced traders access to Active Trader Pro, a fully customizable trading platform with real-time streaming quotes and market data updates. Traders can also use the Real-time Analytics tool, and Strategy Ideas and Trade Armour features to streamline and optimize their trading strategies.

Traders who trade at least 36 times per year and maintain an account balance of at least $25,000 get access to Wealth-Lab Pro, an advanced strategy-testing tool which allows traders to backtest multiple strategies at once by utilizing up to 20 years of historical data. The best part is that all these advanced features are customizable for your own personal trading style.

Finally, Fidelity has an easy-to-use mobile platform for active traders on the go.

Read Benzinga’s full Fidelity Review 

Compare ETF brokerages

Broker Best For Commissions Account Minimum Choose your platform
Charles Schwab
  • Beginner investors
  • Advanced traders
  • Investors seeking commission-free etfs
$4.95 $1,000 waived if you set up an automatic monthly transfer of $100 through direct deposit
Get started securely through Charles Schwab's website
1 Minute Review

Charles Schwab is known for high quality competitive trading platforms, a large selection of commission-free exchange traded funds and no-transaction-fee mutual funds. Consistently winning awards with J.D Power, Fortune, and Inventors Business Daily, Charles Schwab is praised for its heritage of innovation, modern wealth management capabilities and customer service.

Pros
  • $4.95 standard trade commissions
  • Powerful research tools
  • Low cost index funds (no minimums)
  • Excellent customer service
Cons
  • $1,000 minimum balance
  • No Forex
Current Promotion

$100 referral award for first-time clients

eTrade
  • Mobile traders
  • Traders looking for research and data
  • Investors looking for retirement planning guidance
$6.95 for fewer than 30 trades/quarter. $0
Get started securely through eTrade's website
1 Minute Review

E-Trade is best known for its user-friendly browser, desktop and mobile trading platforms and its extensive research and educational information. E-Trade may not have the lowest commissions compared to discount online brokers, but customers certainly get their money’s worth from E-Trade’s comprehensive offerings.

Pros
  • Extensive resources
  • Full banking services
  • Easy-to-use platforms
Cons
  • Limited access to ETrade Pro
  • Higher commissions than discount brokers
Current Promotion

60 days of commission-free trades with deposit of $10,000 or more

Ally Investment
  • Active traders
  • Beginners looking to start trading
  • Low fees
  • Penny stocks
$4.95 volume discount available $0
Get started securely through Ally Investment's website
1 Minute Review

If investors are on the hunt for a bargain broker, Ally Invest could be the one. With low commissions across the board, Ally Invest (formerly TradeKing) stops potential investors in their tracks with its especially low mutual fund commissions. Commissions on stocks and ETFs are notoriously inexpensive as well, and for more active traders or those with larger account balances, commissions can dip as low as $3.95 per trade.

Pros
  • Volume discounts available
  • Among the lowest fees in industry
  • Good for every experience level
  • Excellent customer service
Cons
  • No commission free ETFs
  • Lacks physical locations
Current Promotion

$3.95 per stock trade for Active Traders at Ally Invest

TD Ameritrade
  • Beginner investors
  • Advanced traders
  • Investors who want portfolio-building advice.
$6.95 $0
Get started securely through TD Ameritrade's website
1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Pros
  • Superior technology
  • No account minimum balance
  • Excellent customer support
  • Premier data and news partnerships
Cons
  • Slightly higher commissions
  • Can be for more advanced users
Current Promotion

Trade commission–free for 90 days & get up to $2500

Fidelity Investments
  • Retirement investors
  • Active traders
  • Premium research
  • Low fees
  • No-transaction-fee mutual funds
$4.95 $0 for IRAs. Some accounts may require a minimum opening balance of $2,500
Get started securely through Fidelity Investments's website
1 Minute Review

Fidelity's customized market research for individual investors is unmatched. Fidelity is best for experienced traders willing to make a minimum 36 trades per quarter. Not only does Fidelity offer 24/7 customer support, there are branches nationwide that offer in-person seminars and webinars to ensure that customers are always informed on the latest market research and technologies.

Pros
  • Low cost trade commissions
  • Commission free ETFs
  • Excellent customer support
Cons
  • Platform can be complex
  • Minimum investment balance of $2,500
Current Promotion

Commission-free trades good for 2 years

Wealthfront
  • Passive investors
  • Lower fees
  • Beginning investors
  • Investors who don't want to manage money on their own
0.25% annual fee $500
Get started securely through Wealthfront's website
1 Minute Review

Wealthfront offers automated investment services, customized according to the risk tolerance and investment goals of every investor. For assessing clients basic financial health, Wealthfront has designed a financial planning solution called Path. If you link all your accounts, Path can analyze your financial habits and help you determine where are your habits going to lead you in the future. Investors who wish to invest their savings can use an automatic investing feature called PassivePlus at low cost. It offers the following strategies: Tax-Loss Harvesting, Stock-level Tax-Loss Harvesting, Smart Beta and Risk Parity.

Pros
  • Relatively small fess
  • Goals and risk tolerance based strategies
  • Time-tested and academically proven investment strategies
  • Tax optimization
  • Financial planning and results tracking
  • Referrals program
Cons
  • No partial shares allowed
  • Doesn't invest entire deposit
Current Promotion

None at this time