DollarGeek Presents:

Best Online Brokers for Stock Trading - August 2020

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You’ve heard it a million times, “invest your money in the stock market”. Well, if you’re trying to build more wealth in 2020, opening an online brokerage account can be a great decision. DollarGeek has sorted through the top online brokers and provided you the information you need to open an account and start investing. Opening an online brokerage account gives you the ability to invest outside of your retirement accounts (like your 401K, IRA and Roth IRA) and provides you a diverse way to invest.

Browse the different perks each online stock trading broker can offer investors with DollarGeek.

Showing 1-10 of 10 accounts
OVERALL RATING:
(4.5)
on Robinhood's website

Min. Balance

$0

Fees

$0.00

per trade

Promotion

None

no promotions at this time

Minimum

$0

Fee

0

per trade
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OVERALL RATING:
(4.5)
on Ally's website

Min. Balance

$0

Fees

$0.00

per trade

Promotion

$3,000

cash bonus with qualifying deposit

Minimum

$0

Fee

0

per trade
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OVERALL RATING:
(4.5)
on E-Trade's website

Min. Balance

$0

Fees

$0.00

per trade

Promotion

60 days

of commission free trades

Minimum

$0

Fee

0

per trade
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OVERALL RATING:
(4)
on Merrill Edge's website

Min. Balance

$0

Fees

$0.00

per trade

Promotion

Cash Bonus

with qualifying deposit

Minimum

$0

Fee

0

per trade
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OVERALL RATING:
(4.5)
on Charles Schwab's website

Min. Balance

$0

Fees

$0.00

per trade

Promotion

Cash Bonus

with qualifying deposit

Minimum

$0

Fee

0

per trade
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OVERALL RATING:
(4.5)
on Fidelity's website

Min. Balance

$0

Fees

$0.00

per trade

Promotion

None

no promotions at this time

Minimum

$0

Fee

0

per trade
+ Show More Details
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OVERALL RATING:
(4)
on TradeStation's website

Min. Balance

$0

Fees

$0.00

per trade

Promotion

None

no promotions at this time

Minimum

$0

Fee

0

per trade
+ Show More Details
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OVERALL RATING:
(4.5)
on TD Ameritrade's website

Min. Balance

$0

Fees

$0.00

per trade

Promotion

Cash Bonus

with qualifying deposit

Minimum

$0

Fee

0

per trade
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OVERALL RATING:
(5)
on Vanguard's website

Min. Balance

$0

Fees

$0.00

per trade

Promotion

None

no promotions at this time

Minimum

$0

Fee

0

per trade
+ Show More Details
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OVERALL RATING:
(4.5)
on Interactive Broker's website

Min. Balance

$0

Fees

$0.01

per share ($1 min)

Promotion

None

Minimum

$0

Fee

0

per share ($1 min)
+ Show More Details
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Learn About A Brokerage Account

Gain some clarity with our geeky insight.

What is an online stock trading broker?

A stock broker acts as the connection between you and the exchange where stocks are being traded. Online stock brokers give you access to different investment products like stocks, ETFs, bonds, commodities, and other financial assets straight from your laptop or smartphone.

Do you need a lot of money to start an online brokerage account?

Luckily, only a small amount of money is necessary to start a brokerage account. Most discount brokers are offering anywhere between $0 and $500 account minimums, making it easy for anyone to get started with an online brokerage account.

What type of accounts can I have with the best online broker?

There are a number of types of accounts available at brokerages:

1. Cash Accounts

A cash account is a brokerage account in which a customer is required to pay the full amount for securities purchased, and buying on margin is prohibited. The Federal Reserve’s Regulation T governs cash accounts and the purchase of securities on margin. This regulation gives investors two business days to pay for securities.

2. Margin Accounts

A margin account is a brokerage account in which the broker lends the customer cash to purchase stocks or other financial products. The loan in the account is collateralized by the securities purchased and cash, and comes with a periodic interest rate. Because the customer is investing with borrowed money, the customer is using leverage which will magnify profits and losses for the customer.

3. Retirement Accounts

Brokerages offer all types of retirement accounts such as Traditional IRAs, Roth IRAs, SEP IRAs and 401(k)s.

Get familiar with these terms if you're going to open a online brokerage account:

There are some important terms you should be familiar with when opening a brokerage account:

1. Stock

A stock (also known as “shares” or “equity”) is a type of security that signifies proportionate ownership in the issuing corporation. This entitles the stockholder to that proportion of the corporation’s assets and earnings.

2. Exchange-Traded Fund (ETF)

An exchange-traded fund (ETF) is a collection of securities—such as stocks—that typically tracks an underlying index.

3. Mutual Fund

A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities such as stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund’s assets and attempt to produce capital gains or income for the fund’s investors. These money managers that allocate the funds assets have different investment objectives that can range from a variety of asset classes, like investing in strictly foreign stocks or commodities.

4. Bond

A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). You can think of a bond as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. You can get bonds from the federal government to a publicly traded company like Microsoft or Boeing.

5. Limit Order

A limit order is the use of a pre-specified price to buy or sell a security. For example, if a trader is looking to buy XYZ’s stock but has a limit of $18.50, they will only buy the stock at a price of $18.50 or lower. If the trader is looking to sell shares of XYZ’s stock with a $18.50 limit, the trader will not sell any shares until the price is $18.50 or higher.

6. Market Order

A market order is a request by an investor – usually made through a broker – to buy or sell a security at the best available price in the current market. A market order is widely considered to be the fastest and most reliable way to enter or exit a trade and provides the most likely method of getting in or out of a trade quickly. For many large-cap liquid stocks, market orders fill nearly instantaneously.

7. Market Capitalization

Market capitalization, which is often referred to as “market cap,” refers to the total dollar market value of a company’s outstanding shares. Market cap is calculated by multiplying a company’s shares outstanding by the current market price of one share.

Can I take money out of my online brokerage account?

Withdrawing your money from a brokerage is relatively straightforward. When you have money in a brokerage account it is generally invested into certain assets like stocks, bonds, etc. Sometimes there is cash left on the side that is in the account but not invested. This excess cash can always be withdrawn at any time similar to a bank account withdrawal. The other money that is invested can only be withdrawn by liquidating the positions held. This means selling the assets that you purchased like stocks, ETFs, and mutual funds. Once sold, you can withdraw that cash. Also, don’t forget that any gains you made on your investments that you liquidated will be taxed if its in a standard brokerage account (retirement accounts can have different tax treatment).

Review: Best Online Brokers for Stock Trading of August 2020

DollarGeek is here with you every step of the way when you're selecting the best online brokers. Find the best place to start growing your money.

Online Broker

Minimum Deposit

Management Fee/Cost Per Trade

Best For

Visit

$0

$0

Mobile App

$0

$0

Active Traders

$0

$0

Stock Research

$0

$0

Customer Service

$0

$0

Customer Service

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