Though the best online brokers charge low fees, you’ll likely be responsible for covering certain costs as you invest.
Lei Deng, founder of Savor Financial, says you are looking for trade commissions, other transaction fees, and advisory fees if you plan to delegate your investing to a broker.
Here are the most common types of fees you can expect:
Commission Rates for Trades
You might be charged a trade commission when you trade a stock, ETF or other security. Though many brokers, including those listed on this page, offer no-commission trades, you might still be responsible for a contract fee. For example, you may be able to trade options without a base commission, but you’ll be charged a fee—often around $0.60—per options contract. If you’re an active trader, you’ll want to take these rates into consideration.
Withdrawal and Transfer Fees
An online broker may charge you to transfer money into your account or to withdraw your funds. “If you were in any way unsatisfied with a broker, how easy is it to break up with them?” Deng asks. “Look into any potential transfer fee such as ACAT fees, and if they offer to transfer your investment in kind or you have to sell all investments (and incur fees and taxes) before you can take your money out.”
Some of the best brokers on our list—Charles Schwab, Fidelity and IBKR—don’t charge for withdrawals. The remaining brokerages charge between $50 and $125.
Fees for Account Management or Inactivity
The best online brokerages usually don’t charge a monthly account management fee.
Some, however, charge an inactivity fee. eToro and TradeStation are the only brokerages on our list that charge an inactivity fee.