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Choosing an online broker can seem daunting when you are faced with dozens of reputable financial companies competing for your business. However, by focusing on several key factors, such as cost, account type, customer service options, and tools available, you can quickly narrow down your options and help you identify the best broker for your needs.
Find out the key areas to consider when choosing a broker. All these factors and more are evaluated in Bankrate broker reviews. This provides a detailed analysis of the pros and cons of each platform for different levels of investors.
Type of online brokerage company: Which is best for you?
If you decide to invest online, there are a few ways to get the job done. Here are several types of online brokers.
Discount Broker
This is probably what you think when imagining an online broker. Discount brokers are perfect for do-it-yourself investors looking for a low-cost way to trade and invest.
There’s no shortage of options when it comes to discount brokers, but Charles Schwab, Robin Hood and e-Trade are the most popular. These brokers allow you to purchase securities such as stocks and ETFs.
If you’re just starting out, Fidelity is a great broker for beginners. Bankrate’s 2025 award was won as the best broker and also based on a wide range of research, educational content and strong customer support, for beginners based on low transaction costs and account fees.
Robo Advisor
Robo-Advisors (or automated portfolio management services) are a popular option for those looking for an easy way to develop an investment portfolio at a lower cost than what traditional financial advisors charge.
Robo-Advisors such as WealthFront and Betterment build their investment portfolios based on answers to a few questions about goals, time vision, and risk tolerance. They provide features such as automatic rebalancing and tax LOSS harvesting. This helps reduce taxes on individual and joint tax accounts. Check out Bankrate’s Robo-Advisors reviews to determine which one is best for you.
Micro Investment
If you’re just starting out in investing and don’t have many ways to save, micro-investment may be for you. You only need a few dollars to get started. You can consistently donate your savings over time to help you build your portfolio.
Personal financial apps such as Acorns and Stash allow you to complete purchases purchased in the nearest dollars with a connected debit card and invest additional amounts in ETFs and stock shares. While you may need to increase your savings by more than a few dollars per month to achieve your retirement goals, microinvestment is a great way to get started early.
Considerations when deciding on an online broker
- Fees and fees
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Almost all online brokers offer commission-free transactions on stocks and ETFs, but if you are interested in buying and selling options, investing in crypto, investing in certain mutual funds, or purchasing bonds, you can pay a commission. Consider the type of assets you are most likely to invest in and choose a broker with a lower fee in your area. Also, please note that if you choose to provide a broker’s robo-advisor, you will typically be charged an annual management fee of 0.25% to 0.50% of your assets.
- Account Type
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You’ll also want to pay attention to the type of account each broker offers. Individual taxable accounts are the standard of the securities company. (Don’t forget to pay taxes on capital gains and dividends you earn on this type of account.)
Most online brokers also offer retirement accounts such as traditional and Ross IRAs, which are popular investment vehicles for many people. However, certain tax accounts such as the SEP IRA and Solo 401(k) plan are not widely available. The same applies to custody investment accounts, so consider your needs when shopping.
- Minimum account value
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Most online brokers don’t have very low or account minimums, but if you choose to use a robo-advisor, you can see the minimums for accounts above $5,000 and various thresholds for premium services, such as tax failures and access to one-to-one financial advice from certified financial planners. Before opening an account with a broker, make sure you are able to meet the account requirements.
- Reliability
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In an era of extreme market volatility, some brokers had problems with their platforms going down. Stopping is never a good thing, but it can be particularly frustrating when it’s market stressed. Check with the broker you are considering to see if they have a history of technical issues when their activities increase. If you are hoping to become an active trader, this could be a red flag.
- Tools and other features
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Brokers can provide far more than simply trading services. Consider the depth and availability of educational resources (which can be particularly useful for new users of investment), research, screening tools, trading simulators, and other tools to manage. Many brokers have begun offering fractional shares. This allows investors to purchase small amounts of the company’s stock.
- Customer Support
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No one needs to reach out to customer support to help in the matter, but whenever you need it, it’s nice to get someone right away. Some online brokers provide support through phone calls and online chats for the majority of the day, but others have difficulty reaching out. Some new online brokers have received customer service-related complaints, so be sure to understand how to get help with your account when choosing a broker. (Our broker reviews include details on the availability of customer support for each provider.)
Benefits of working with an online broker
One of the greatest benefits of working with an online broker is that you are likely to avoid paying commissions on transactions that include stocks or exchange trading funds (ETFs). Some brokers even offer commission-free options trading.
Additionally, online brokers typically have low or no account minimums, allowing you to open an account for just a few dollars. This is an advantage over a full-service broker who usually only works with wealthy clients and charges fees for basic transactional purposes. You may receive investment recommendations or additional services from a full-service broker, but online brokers have a huge cost advantage.
Conclusion
Choosing an online broker is an important first step towards investing. To ensure a long and prosperous partnership, take a little time to identify priorities a little while ago and find the best broker for your current and future needs.
– Dayana Yochim from Bankrate contributed to the update of this article.