Online Brokers: What Actually Matters When You’re Picking One
I’ve had accounts at four different brokers over the years. Moved money around more than I probably should have, learned some things the hard way, and eventually settled on a setup that works for me. The good news is that the differences between major brokers have shrunk dramatically — commission-free stock trades are standard now, apps are generally good, and the basics are covered everywhere. The differences that still matter are more subtle.
What to Actually Compare
Every “broker comparison” article lists the same features. Here’s what I’ve found actually matters in practice:
- Fees beyond stock trades: Zero-commission stock and ETF trades are table stakes now. Where fees still bite: options contracts ($0.50-0.65 per contract at most brokers), margin interest rates, mutual fund transaction fees, and account transfer fees. If you trade options regularly, that per-contract fee adds up.
- Account minimums: Fidelity and Schwab have no minimums. Some brokers still require $500-1,000 to start. If you’re starting small, this matters.
- The actual trading platform: This is where brokers diverge the most. Some platforms are built for active traders with advanced charting, options chains, and real-time data. Others are dead simple — buy, sell, done. Neither is wrong; it depends on what you’re doing.
- Account types: Most offer individual brokerage, Roth IRA, traditional IRA, and joint accounts. If you need something more specific — custodial accounts, trusts, HSAs, solo 401(k)s — check availability before signing up.
- Customer support: You don’t think about this until something goes wrong. When it does, the difference between a broker with 24/7 phone support and one with a chatbot is enormous.
The Brokers I’ve Actually Used
Fidelity
Fidelity is where I keep most of my money now. Zero-commission trades, no account minimums, solid mobile app, and the best selection of no-transaction-fee mutual funds I’ve found. Their customer service has been excellent every time I’ve called — actual humans who know what they’re talking about. The research tools are deep without being overwhelming. If you’re a buy-and-hold investor who occasionally wants to dig into a stock’s fundamentals, Fidelity handles that well. Their fractional shares feature is also useful for building positions in expensive stocks without needing thousands of dollars.
Charles Schwab
Schwab was my first “real” brokerage account. Very similar to Fidelity in most respects — zero commissions, no minimums, good research tools, strong customer service with 24/7 availability. They merged with TD Ameritrade, which means Schwab clients now get access to the thinkorswim platform for advanced trading. If you want institutional-quality research and the option to escalate into serious trading tools, Schwab covers a wide range. Their checking account with ATM fee reimbursement is also genuinely useful if you travel.
Robinhood
I used Robinhood briefly when they were the only free-trading option. The app is clean and intuitive — great for beginners who don’t want to be overwhelmed by a Bloomberg Terminal-style interface. But the research tools are thin, customer support has historically been frustrating (improving, but still behind the big brokers), and the gamification of trading encourages behavior that’s not great for most people’s financial health. Fine for a small account where you’re learning the basics. Not where I’d put serious retirement money.
E*TRADE (now part of Morgan Stanley)
E*TRADE has a solid platform that splits the difference between simple and advanced. Their Power E*TRADE platform is good for options trading specifically — the options chain interface and strategy builder are better than what most competitors offer at zero commission. The education section is thorough. I used E*TRADE for a couple of years and had no complaints; I just consolidated at Fidelity for simplicity.
Fees That Catch People Off Guard
The commission-free headline obscures some real costs. Options trades still carry per-contract fees. Margin interest rates vary significantly — Robinhood charges about 5% while Fidelity and Schwab charge more but offer better rates for larger balances. Some brokers charge for real-time data on certain exchanges. Mutual fund transaction fees can be $20+ per trade on funds outside the broker’s free list. And if you ever want to transfer your account to a different broker, expect a $75 transfer fee at most platforms.
Read the fee schedule. The whole thing. It’s boring but the surprises are expensive.
The Research and Education Factor
If you’re the kind of person who wants to actually understand what you’re investing in — reading earnings reports, analyzing balance sheets, watching sector trends — the quality of a broker’s research tools matters a lot. Fidelity and Schwab both provide institutional-grade research from firms like Morningstar, Argus, and CFRA. Robinhood gives you a stock’s price chart and a few sentences of description. The gap is significant.
For newer investors, educational resources matter too. Fidelity’s learning center is genuinely good — articles, videos, and webinars covering everything from “what is an ETF” to advanced options strategies. Schwab (via the TD Ameritrade integration) offers paper trading accounts where you can practice with fake money, which is the best way to learn without risking real dollars. If you’re still figuring out how markets work, choose a broker that invests in teaching you.
Security Basics
All major US brokers carry SIPC insurance, which protects your account up to $500,000 ($250,000 for cash) if the brokerage fails. This doesn’t protect against market losses — just against the broker itself going under. Most major brokers also carry excess SIPC insurance through Lloyd’s of London or similar insurers, covering amounts above the SIPC limits. Make sure two-factor authentication is enabled on your account. Use a unique password — not the same one you use for email or social media. Don’t access your brokerage account on public Wi-Fi without a VPN. Basic stuff, but people skip it, and the consequences of a compromised brokerage account are worse than a compromised Instagram.
What I’d Tell Someone Starting Out
Pick Fidelity or Schwab. Either one. Open an account, set up automatic contributions on a schedule (biweekly matches most people’s paychecks), buy a broad index fund like VTI (total US stock market), VXUS (international stocks), or a target-date fund if you want it even simpler. Focus on consistently adding money rather than agonizing over which broker has the slightly better mobile app.
The broker matters less than the habit of investing regularly. People spend weeks comparing brokers and then don’t actually start investing for months. That delay costs more in missed market returns than any fee difference between platforms. You can always move your money later if you find features you need that your current broker doesn’t offer — the transfer process takes about a week and most receiving brokers will reimburse the transfer fee.
