There have never been more options for traders looking to buy and sell stocks on the cheap. Heightened competition and industry consolidation has led to pricing wars among online brokers, and commissions have now been falling for several years.
With lower commissions across the board, it’s easy to assume there’s no difference between a $6.95 full-service broker and a $4.95 discount stock broker. However, for traders making just 5 trades per day, that extra $2 per trade can end up being $6,500 in extra fees over a 5-year period. Here is Benzinga's list of the best discount stock brokers.
5 Best Discount Stock Brokers
While avoiding fees is important, many discount brokers offer bare-bones platforms and limited features. That’s fine for advanced traders who already know what they’re doing. But new investors looking to learn how to trade could be left high and dry if they choose the wrong discount brokerage.
At the end of the day, traders tend to get what they pay for when it comes to online brokers, and discount brokers are at a discount for a reason. However, there are a few hidden gems out there that offer both low commissions and top-tier features.
1. Lowest Fees Overall: IBKR
For day traders and other active traders who want to experience the feel of a Wall Street trading desk at a discount brokerage price, it doesn’t get any better than Interactive Brokers' Trader Workstation.
Interactive Brokers was designed from the ground up to meet the needs of day traders.
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Interactive Brokers also offers a wide range of tools that are designed to give day traders that split-second advantage that is critical for their success, including programmable hotkeys, customizable order types and algorithmic trading support.
- Works very well for day traders
- Low fees
- Trading tools designed just for day traders
- Algo trading support
- Customizable orders
- Vast scope of the platform may seem a little confusing for some traders
2. Best Tools and Research: Robinhood
A downside of most discount brokers is they don’t provide the same level of information and trading tools as their premium peers. With Fidelity, research and tools are never a problem. Fidelity provides traders with free market research from 20 different 3rd-party providers.
Users get access to analyst ratings, specialized ETF reports, equity summary scores and even mutual fund fact sheets. Traders also have access to Fidelity Viewpoints articles that help point them in the right direction.
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, 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 that 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.
- Wide range of reports and data
- Customizable dashboard and tools
- Real-time analytics
- Platform has a history of halting trading
3. Best Mobile App: E*TRADE
Traders on the move can find everything they need to make winning trades on one of two award-winning E-Trade apps.
For the standard trader, the E-Trade mobile app provides all the functionality you would ever need and an easy-to-use interface. App users get access to third-party research, live streams of CNBC TV and breaking stock market news alerts.
Advanced users can take advantage of the premium features that come for free in E-Trade’s OptionsHouse app. The OptionsHouse app has professional-grade tools for stock and option traders, including customizable options chains and 4-legged chains.
Check out Benzinga's recommended Best Investment Apps for a more comprehensive look at app options.
- Quality mobile app
- Quite a bit of access to third-party research
- News alerts
- Customizable options chains
- May not have the range of trading tools some traders desire
4. Best for Long Term Investors: Magnifi
Magnifi is a marketplace that allows you, as the investor, to use common brokerage tools and AI to make the best decisions for your portfolio. Because you can pull up all the information you need on a given asset, you can easily invest in the assets that will give you the results you deserve and better match your strategy.
Search for the investment options that meet your needs, invest in specific categories or scan for assets in a price range that’s affordable for you.
Best for long-term investors and those who require a bit of client support, you can also learn more about investing from this platform, utilize the AI-powered investing assistant, enjoy commission-free investing, try the mobile app and take advantage of over 15,000 possible investment options. This makes Magnifi a good place to trade for both seasoned and novice traders.
- Automated trading can save traders some time
- Easy to find information on assets
- Quality customer support
- Some trading may not prefer AI trading
5. Best for Stock and ETF Investors: Public.com
Public.com is a discount broker that offers both individual and joint brokerage accounts. The company has been around since 2019 and provides competitively low trading fees, as well as a wide range of investment options. Public.com makes investing simple and easy for beginners by providing an intuitive interface, educational resources, and various portfolio-building tools.
The company has a $0 brokerage account minimum, so you can open an account regardless of how much money you have to invest. Public.com also offers commission-free trades for stocks and ETFs with no minimum balance required.
- Commission-free stock and ETF trading
- Research and analysis tools
- Encrypted security for all accounts
- Ability to observe what others in the trading community are investing in
- No desktop version is available
- 1% commission fee on crypto trades
What is a Discount Broker?
A discount brokerage is a type of financial intermediary that provides services to investors without providing advice or engaging in traditional broker activities. Discount brokers typically offer lower commission rates than full-service brokers, allowing them to help clients focus on achieving their investment objectives with minimal costs. They have become increasingly popular in recent years with the rise of online trading and the availability of low-cost services from a variety of discount brokerage firms.
Sign Up with Your Discount Brokerage Now
Discount brokers can't offer all the bells and whistles of a full-service firm, but you can find that diamond in the rough that offers low commissions and the features you need. Get started today with our recommended discount brokers and open a brokerage account today.
Find the brokerage that meets your priority needs and check out a new account today.
Frequently Asked Questions
How much do discount stock brokers charge?
The fees vary, but most discount stock brokers charge between $5 and $30 per trade.
Where can I find the best discount stock brokers?
You can find the best discount stock brokers on the list above.
What are the disadvantages of discount stock brokers?
One of the disadvantages you may experience from a discount stock broker is that you may not the same level of customer servcie as you do a full-service broker.