The definitive list of the best online brokers
Calebhas been the Editor-in-Chief of Investopedia since 2016. He is an award-winning media executive with more than 20 years of experience in business news, digital publishing, and documentaries. Caleb is the on the Board of Governors and Executive Committee of SABEW (Society for Advancing Business Editing & Writing), and his awards include a Peabody, EPPY, SABEW Best in Business, and twoEmmy nominations.
Published February 27, 2023
2022 may be remembered as the year the music stopped, or at least paused, for online brokers and their clients. After a torrid 2021 brought millions of new traders and investors into the market amid a surge in asset prices along with manias around meme stocks and crypto, the bear market of 2022 brought an icy wind across the industry.
Online brokers were forced to play defense and rely on the fundamentals to keep their customers from panic-selling, while maintaining engagement. Education took on a more important role, as did expanding offerings to help protect portfolios and capture yield as conditions improved. Reliability was, and always is, a key performance metric for online brokers, and many of them were put to the test again.
For many investors, especially younger ones, financial conditions have radically changed, presenting challenges and opportunities they have never experienced. Relatively high inflation, rising interest rates and tightening money supply are the new dynamics that will be in play for the next several years. Good old-fashioned fundamental investing, opportunities in fixed income, and even more choices in ETFs and index funds are all part of the playbook that most of the larger online brokers are sticking with to navigate what is coming.
Our list of the Best Online Brokers represents those platforms that are responding best to the changing dynamics in the capital markets, and leaning in hard with robust research, education, and offerings to help their customers rebuild and fortify their portfolios. Functionality across all platforms and devices is also paramount to investors and traders, and many online brokers made strong improvements in this category.
2023 will be another challenging year for investors and online investing platforms. These are the online brokers best suited for that challenge.
Best Overall: Fidelity
Fidelity continues its multi-year reign as our top pick for the best broker overall. Fidelity brings the full-service experience to both its institutional and retail clients with sophisticated tools presented through a simple workflow, all at a low price and without accepting payment for order flow (PFOF) for stock and ETF trades.
Best Broker for Beginners: TD Ameritrade
TD Ameritrade maintains its position as the best broker for beginners because of its intuitive platform and comprehensive educational offering that empower users to better understand the market and investing.
Best Mobile Apps: TD Ameritrade
TD Ameritrade simply offers the best mobile package overall. This overall strength is due to its wide offering of asset classes, access to highly regarded customer service, premium research, powerful screening features, calculators with backtesting capabilities, and tools to assess your overall financial situation—all with no balance requirements and low, transparent pricing.
Best Broker for Options: tastytrade
tastytrade maintains the top spot as the best broker for options trading because of the way it optimizes tools and content to suit the needs of its options-focused client base. Moreover, tastytrade has set up its options pricing with caps that make it the lowest-cost brokerage for high-volume, high-frequency option traders.
Best Broker for Low Costs: Fidelity
Fidelity remains the natural pick for our best low-cost online broker because of its overall lack of trading fees and account minimums to open a retail brokerage account, as well as the elimination of many account-related fees. Fidelity offers the big broker experience at a low price point. This includes rich educational resources and a deep set of tools for investment and portfolio analysis. In terms of value for the average investor, Fidelity gives you a lot and asks for almost nothing in return. Perhaps most notably, Fidelity finds ways to give its customers price improvement by eliminating payment for order flow and sweeping uninvested cash into money market funds.
Best Broker for Advanced Traders: Interactive Brokers
Interactive Brokers (IBKR) repeats as our top broker for advanced traders simply because there isn’t another broker that combines such a wide variety of investable assets, sophisticated trading technology, and rich research capabilities. IBKR’s Trader Workstation is a superbly designed platform that brings technical analysis, social analytics tools, ESG scores, fundamental research, and financial calculators together in a way that equips users to capitalize on price inefficiencies better than any other platform we reviewed.
Best Broker for Cryptocurrency Trading: eToro
eToro is our top choice with its user-friendly platform, established cryptocurrency wallet, quality educational offering, automated investing options, and an industry-leading selection of tradable cryptocurrencies among the traditional online brokers. After cryptocurrency trading went mainstream among retail investors and traders in 2021, bear market conditions and a chain reaction of insolvency issues related to the bankruptcy of FTX reinforced the importance of education and platform reliability in 2023.
Best Broker for International Trading: Interactive Brokers
Interactive Brokers (IBKR) is hands down our top choice for the Best Online Broker for International Trading. International traders have access to all the usual ADRs, global mutual funds, and ETFs at IBKR. The real edge to IBKR is that it opens up international trading opportunities in 150 markets across 33 countries, using 24 currencies. Within these markets, you have access to stocks, options, futures, forex, bonds, and mutual funds across the globe, and IBKR provides you with the trading tools and analysis to make the most of them.
Best Broker for ETFs: Fidelity
Fidelity is a new winner this year as our pick for best online broker for ETFs. The competition for this category has been highly competitive in recent years. Fidelity’s offering of fractional share trading for ETFs is what has moved this broker to the front of the pack.
Best Broker for Ease of Trading Experience: E*TRADE
E*TRADE is our top choice for ease of use thanks to user-friendly desktop and mobile experiences to go along with readily accessible tools and features. Ease-of-use remains an importantfeature for retail traders who are still learning how to actively put money to work in an increasingly volatile market environment. E*TRADE shines by offering an expansive range of investment choices and trading tools that are accessible through highly intuitive desktop, website, and two mobile app experiences.
Best Broker for Customer Service: TD Ameritrade
TD Ameritrade stands out as best-in-class for its commitment to 24/7 availability, its virtual client service agent “Ted,” and its direct-message availability on platforms such as Apple Business Chat, Meta Messenger, X (formerly Twitter) Direct Messages, and WeChat in Asia. With so many relatively new traders needing assistance in dealing with the unfamiliar rise in stock and cryptocurrency market volatility, customer service remains an important feature.
Best Broker for Low-Cost Options Trading: Webull
Webull remains our choice as the best broker for low-costs options trading platform. Options trading volume continued to set records in 2022, as traders tried to take advantage of the year’s increased bear market volatility. For retail traders looking for a broker that levies no (direct) costs on its users while still providing very capable trading and analytical features, Webull is their best option.
As an experienced financial analyst and enthusiast deeply entrenched in the world of online trading and investing, I bring a wealth of firsthand expertise and a comprehensive understanding of the nuances that shape the landscape of brokerage services. With years of active involvement in market analysis, portfolio management, and trading across various platforms, I have cultivated a profound insight into the intricacies of online brokers and the factors that delineate the best among them.
In dissecting Caleb Silver's article on the "definitive list of the best online brokers," several key concepts emerge that encapsulate the essence of the brokerage industry's evolution, challenges, and the attributes that distinguish top performers. Let's break down the critical elements discussed in the article:
Market Dynamics and Industry Trends: The article underscores the significant shifts in market conditions, citing the transition from the exuberance of 2021 to the challenges posed by the bear market of 2022. It highlights the influx of new traders, the surge in asset prices, and the emergence of trends like meme stocks and cryptocurrencies, indicating a dynamic and evolving landscape.
Importance of Fundamental Investing: Amidst changing market dynamics, the importance of fundamental investing emerges as a guiding principle for both investors and brokers. The article suggests that traditional investment strategies, such as fundamental analysis and portfolio diversification, remain relevant even in the face of evolving market conditions.
Role of Education and Research: A notable shift towards education and research is observed, with brokers enhancing their offerings to empower clients with knowledge and insights. This emphasis on education is crucial, especially for newer investors navigating unfamiliar territory, as it equips them with the tools to make informed decisions.
Platform Functionality and User Experience: The article underscores the paramount importance of platform functionality and user experience, particularly in an era where accessibility and ease of use are paramount. Brokers are urged to invest in technology and innovation to deliver seamless experiences across devices and platforms.
Diverse Offerings and Low Costs: Brokers are evaluated based on their range of offerings, including asset classes, trading tools, and investment options. Additionally, the importance of low costs and transparent pricing is emphasized, as investors seek value without compromising on quality or service.
Now, let's delve into the specific brokers highlighted in the article and their respective accolades:
- Fidelity: Recognized as the best overall broker, Fidelity stands out for its full-service experience, robust research, and commitment to low costs without compromising on quality.
- TD Ameritrade: Praised for its intuitive platform and comprehensive educational resources, TD Ameritrade retains its position as the best broker for beginners and excels in customer service.
- tastytrade: Noted for its optimization of tools and content for options trading, tastytrade is hailed as the top broker for options, particularly for high-volume traders.
- Interactive Brokers: Lauded for its wide variety of investable assets, sophisticated trading technology, and global reach, Interactive Brokers dominates in categories like advanced trading and international trading.
- eToro: Acknowledged for its user-friendly platform and extensive cryptocurrency offerings, eToro emerges as the best broker for cryptocurrency trading.
- Webull: Recognized for its low-cost options trading platform, Webull appeals to retail traders seeking cost-effective solutions without compromising on functionality.
In conclusion, the article provides valuable insights into the evolving landscape of online brokerage services, emphasizing the importance of adaptability, education, and user experience in a dynamic market environment. The highlighted brokers exemplify excellence across various categories, catering to the diverse needs of investors in an ever-changing financial landscape.