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Best Online Brokers for ETF Investing

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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

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders

TradeStation

TradeStation offers over 2,000 commission-free ETFs making it a valuable option for anyone interested in trading ETFs.

TradeStation’s platform leverages cutting edge trading technology for both active and passive individual traders in the U.S. TradeStation has fully customizable market monitoring, charting and analysis tools that allow you to identify and act upon opportunities.

TradeStation also boasts a spectacular mobile platform which investors on the go can access on their iOS or Android device. Your mobile account automatically synchronizes with your online accounts in real time.

See our TradeStation Review

TD Ameritrade

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

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  

E-Trade

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

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  

Wealthfront

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

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 2019.

Read Benzinga’s full Wealthfront Review

Best For
  • Active traders who make multiple trades a day or week
  • International traders looking for options support
  • Users who want an automated trading experience
  • Users who are most concerned about commissions and fees cutting into profits

eOption

eOptions has become known for more than options trading. Their notorious low costs of $3 per trade, even on ETFs, alleviate the high fees of active trading.

They’re a great option for traders that know what ETFs they’re looking to invest in, as their resource center and educational tools are not the most extensive.

To make your trades, eOption does have an easy-to-use and intuitive trading platform.

You can access your watchlist, news, charts, research, account information and more from their desktop platform or mobile trading app.

Read Benzinga’s full eOption Review

Charles Schwab

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

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
  • Active traders
  • Beginners looking to start trading
  • Low fees

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

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.

Broker Best For Commissions Account Minimum Choose your platform
TradeStation
  • Advanced traders
  • Options and futures traders
  • Active stock traders
$0 $0
Get started securely through TradeStation’s website
1 Minute Review

Founded in 1982 and headquartered in Plantation, Florida, Trade Station is apt for sophisticated traders. The firm offers free premium tools and real time data, charging no fees for software. ‘Amazing infrastructure’ and ‘innovative technology’ are the firm’s two selling points, which promise exceptional speed and reliability – a sine-qua-non for active and advanced traders. The firm also offers customized trading solutions for both international and domestic institutions.

Pros
  • Advanced trading platform
  • Vast amount of historical data that allows back-testing of trading ideas
  • Availability of many third-party add-ons
Cons
  • Less active traders are disadvantaged
  • No commission-free ETFs
Current Promotion

Open an account and save 20% on commissions.

TD Ameritrade
  • Beginner investors
  • Advanced traders
  • Investors who want portfolio-building advice.
$0 $6.95 for OTC Stocks $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

eTrade
  • Mobile traders
  • Traders looking for research and data
  • Investors looking for retirement planning guidance
$0 $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

Charles Schwab
  • Beginner investors
  • Advanced traders
  • Investors seeking commission-free etfs
$0 $0
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

Ally Investment
  • Active traders
  • Beginners looking to start trading
  • Low fees
$0 $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 are now $0.

Pros
  • Volume discounts available
  • Among the lowest fees in industry
  • Good for every experience level
  • Excellent customer service
Cons
  • Lacks physical locations
Current Promotion

$3.95 per stock trade for Active Traders at Ally Invest

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 free financial planning solution, powered by its automated financial advice engine 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. Wealthfront also offers a high-yield cash account with a 2.51% APY, FDIC insurance up to $1M, and no fees. Investors who wish to invest their savings can use its automatic investing suite 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 fee
  • Goals and risk tolerance based strategies
  • Time-tested and academically proven investment strategies
  • Tax optimization
  • Financial planning and results tracking
  • Referrals program
  • High-yield cash account
Cons
  • No partial shares allowed
  • Doesn't invest entire deposit
Current Promotion

None at this time

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

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