Brokerage Basics

Disclosure: This article contains affiliate links, which generate income for this free website at no additional cost to you. This article is written for informational purposes only and should not be construed as financial or any other type of professional advice.

Online brokerage firms offer investors the ability to buy and sell stocks, ETFs, mutual funds, etc. through web-based platforms using your desktop or mobile apps. Most offer educational content, investing tools, and resources that allow investors to choose investments and build a portfolio.

Most brokerage firms now offer zero-transaction fee trades. Differences may include the depth of ETF and mutual-fund offerings, nature and amount of early redemption fees, and whether trades are batched or executed in real time. Most traditional brokerage firms execute orders based on current trading information (that is, real time or close to real time). But a few execute certain orders at specific times throughout the day or at the end of the day. Note that the purchase and redemption of mutual funds occur at the end of the day at all brokerage firms.

Here’s a listing of several major firms and the basics to know before opening an account:

Ally Invest

Ally Invest is a financial services company that offers online brokerage and related services to investors. The company provides low and no-cost services for the purchase and sale of stocks, ETFs, mutual funds, and more. Investors can access educational content and technical research plus tap credentialed financial experts through its website.

Account Minimums

• Brokerage Account: $0
• IRA: $0
• Automatically managed portfolios (Ally Invest Managed Portfolios): $100

Online Transaction Costs

• Stocks and ETFs
  • Regular price: $0
  • Commission-free ETFs: $0
  • Short-term trading fee for ETFs (30 days or less): $9.90
• Mutual funds:
  • No-load, no-transaction-fee funds: $9.95
  • Load funds: $0.00

Free Services

• Stock/ETF trades
• 50+ Commission-free ETFs

Branches:

No

E*Trade

E*Trade is a financial services company that offers online brokerage and related services to investors. The company provides low and no-cost services for the purchase and sale of stocks, ETFs, mutual funds, and more. Investors can access educational content and technical research plus tap credentialed financial experts through its website.

Account Minimums

• Brokerage Account: $0
• IRA: $0
• Automatically managed portfolios (Core Portfolios): $500

Online Transaction Costs

• Stocks and ETFs
  • Regular price: $0
  • Commission-free ETFs: $0
• Mutual funds:
  • No-load, no-transaction-fee funds: $0.00
  • Transaction-fee funds: $19.99
  • Load funds: varies
  • Early redemption of no-load, no-transaction-fee funds (within 90 days of purchase): $49.99

Free Services

• Stock/ETF trades
• 4,500+ no-load, no-transaction-fee mutual funds
• 2000+ Commission-free ETFs

Branches:

Yes

Fidelity

Fidelity Investments offers discount brokerage services, including broad offerings of Fidelity and other branded mutual funds with no transaction fees and no sales loads. The company provides tools and education for do-it-yourself investors; investment guidance and recommendation; and managed solutions.

Account Minimums

• Brokerage Account: $0
• IRA: $0
• 529 Plan: $0
• Automatically managed portfolio (Fidelity Go): $0
• Professionally managed portfolios: $50,000

Transaction Costs

• Stocks and ETFs
  • Regular Price: $0
  • Commission-Free ETFs: $0
• Mutual funds
  • Fidelity funds: $0
  • No-transaction-fee, non-Fidelity funds: $0; $49.95 short-term redemption fee on these funds held less than 60 days
  • Transaction-fee, non-Fidelity funds: $49.95 per purchase; $0 for redemption

Free Services

• Stock/ETF trades
• 300+ No-load, no-transaction-fee mutual funds
• 1,000+ Commission-free ETFs

Branches:

Yes

Charles Schwab

Charles Schwab has a full range of offerings for investors including its discount brokerage along with portfolio management and advisory services. The company has mutual funds and ETFs available for trading at no cost.

Account Minimums

• Brokerage Account: $0
• IRA: $0
• 529 Plan/Coverdell ESA/Custodial (UGMA-UTMA): $0
• Automatically managed portfolios (Schwab Intelligent Portfolios): $5,000
• Professionally managed portfolios (Schwab Managed Portfolios): $25,000

Online Transaction Costs

• Stocks and ETFs
  • Regular price: $0
  • Commission-free ETFs: $0
• Mutual funds:
  • OneSource Funds: $0
  • Other funds: up to $49.95 to buy; $0 to sell
  • Short-term redemption fee (90 days or less) on OneSource Funds: $49.95

Free Services

• Stock/ETF trades
• Schwab Intelligent Portfolios (robo-advisory portfolio)
• 4,000+ no-load, no-transaction-fee mutual funds
• 500+ Commission-free ETFs

Branches:

Yes

TD Ameritrade

TD Ameritrade offers discount brokerage services and investment management services such as managed portfolios. The company provides technical and educational resources for individual investors.

Account Minimums

• Brokerage Account: $0 (electronic funding: $50)
• IRA: $0
• 529 Plan/Coverdell ESA/UGMA-UTMA: $0
• Automatically managed portfolios (Essential Portfolios): $5,000
• Professionally managed portfolios (Selective Portfolios): $25,000

Online Transaction Costs

• Stocks and ETFs
  • Regular price: $0
  • Commission-free ETFs: $0
  • Commission-free ETFs short-term redemption fee: $13.90
• Mutual funds
  • No-transaction-fee funds: $0.00
  • No-load funds: $49.99
  • Load funds: $0.00 (no transaction costs but may require payment of sales commission or “load”)
  • Short-term redemption fee: $49.99

Free Services

• Stock/ETF trades
• 1,800+ no-load, no-transaction-fee mutual funds
• 550+ Commission-free ETFs

Branches

Yes

Vanguard

Vanguard offers low-cost mutual funds and ETFs in addition to services aimed at buy-and-hold investors. It rewards customers with high account balances and lower-volume trading.  The company provides educational resources for individual investors.

Account Minimums

• Brokerage Account: $0
• IRA: $0
• Vanguard 529 Plan: $25
• ETFs/Stocks: Cost of one share plus any transaction costs
• Mutual Funds: $3,000 for most funds ($1,000 for Target Date Retirement Funds)
• Professional advisory services: $50,000

Transaction Costs

• Stocks and ETFs
  • Regular price: $0.00
  • Commission-free ETFs: $0.00
  • Commission-free ETFs short-term redemption fee (ETFs held 30 days or less): $19.99
• Mutual funds
  • No-transaction-fee funds: $0.00
  • No-transaction-fee early redemption fee (within 60 days of purchase): $50
  • Load funds: varies (see prospectus); up to 5.75% of purchase amount
  • Transaction-fee funds: $20 (for accounts with $500,000 or less)

Free Services

• 140+ no-load, no-transaction-fee mutual funds
• Approximately 1,800+ Commission-free ETFs

Branches

No

Webull

Webull offers free stock and ETF trades and requires no minimum balances. The firm’s app is easy to use for stock research and account management whether you’re funding the account or making stock/ETF purchases for free. The company provides educational resources for individual investors, primarily through its app.

Account Minimums

• Brokerage Account: $0
• IRA: $0

Transaction Costs

• Stocks and ETFs
  • Regular Price: $0.00
  • Short-term redemption fee: $0.00
• Mutual funds
  • None available

Free Services

• Stock/ETF trades

Branches

No