In addition to almost all major brokerage firms eliminating commissions on stock trades, the process of buying and selling stocks is now simpler than ever. And a major factor in this is the superb commission-free trading platforms that are readily available and enable stock trading as well as other activities.
In this article, we’ll discuss some of the best free trading platforms from top stock brokers as well as some factors to take into account when determining which is the right option for you.
Best Free Trading Platforms 2022
By allowing commission-free transactions on assets including stocks, ETFs, options, and cryptocurrencies, Robinhood has transformed the idea of free stock trading. Over 5000 unique stocks and ETFs can be traded using Robinhood’s user-friendly web and mobile trading platforms. In addition to trading services, Robinhood also provides a cash management account that pays a dividend on unused cash of up to 0.30 percent annually. Users of Robinhood have free access to charts, expert opinions, and statistics data.
The margin debt is subject to a 2.5 percent interest rate from Robinhood. Users need to upgrade to a Robinhood Gold account in order to use the margin trading service. Users must keep $2,000 in their accounts, as required by industry regulations, in order to conduct margin trading. Because it offers $1.25 million in insurance from the Federal Deposit Insurance Corporation, Robinhood is a highly favored trading platform.
Comparing Robinhood’s customer service to that of other trading platforms, it is not very user-friendly. On Robinhood’s website, all straightforward questions regarding account opening, commissions, and expenses have been answered.
2. TD Ameritrade
Both novice and seasoned traders can use the low-cost trading platform TD Ameritrade. It allows trading in stocks, ETFs, and options and has a $0 minimum deposit requirement. On the trading site of Ameritrade, an investor can also access over 700 mutual funds with the lowest 0.5 percent expense ratio.
A number of free research tools and excellent stock trading courses are also provided by Ameritrade. Ameritrade’s customer service is excellent since it is always accessible across all 300 of its branches for online, telephone, and in-person support. It offers two trading systems, Thinkorswim and Ameritrade Web.
Because of its virtual trading simulator, TD Ameritrade is preferred by the majority of new investors. With this simulator, you have access to the margin account and $100,000 in practice money. Inexperienced traders can take advantage of this chance to practice trading and evaluate the platform without risking any real money.
When compared to its competitors, TD Ameritrade has slightly higher margin lending rates. The margin trading interest rate at Ameritrade is 9.5 percent for debts under $10,000. The margin interest rate drops to 7.5% if the total debt exceeds $0.25 million. If the total debt exceeds $0.5 million, traders can chat with customer service to get the margin interest rate reduced even more.
The absence of fractional investment is Ameritrade’s lone drawback. Fractional investing would have allowed novice investors to buy a small stake in fundamentally sound companies that trade above $1,000.
3. Interactive Brokers
One of the most established stock brokers around the globe is Interactive Brokers. Its 2019-released IBKR Lite account, which allows free trading on stocks, ETFs, and options, is offered by the company. Through IBKR Lite membership, Interactive Brokers would also make investing in mutual funds and fixed income securities easier. Additionally, IBKR Lite customers would have access to a global pool of 26,000 funds. For consumers looking to invest in ETFs, Interactive Brokers is the finest trading platform because it has a mutual funds replication that makes it easy to find inexpensive ETFs. This stockbroker serves 135 markets globally and operates in 33 countries.
If you have no prior expertise in trading or investing, you can use Interactive Brokers’ automatic portfolio management services. For an annual asset-based management fee of 0.12 percent, the advisor team would assist novices in creating a superior portfolio of assets based on their level of risk tolerance.
Users with extensive trading needs might choose an IBKR Pro account. Users would have access to various tradable securities, intelligent order routers, and reduced margin rates with the Pro account.
The lowest margin loan rates in the market are offered by Interactive Broker. For debts up to $25,000, its margin interest rate is 1.59 percent. The margin interest rate falls to 0.86 percent if the total debt surpasses $3.5 million.
4. Ally Invest
One of the user-friendly trading systems that enable commission-free trading is Ally Invest. Both new and seasoned traders can use this trading platform to transact in UK equities, ETFs, and options. Ally Invest will be the top free trading platform in 2022 thanks to features including automatic portfolio management, a sizable collection of technical indicators, and access to 11,200 mutual funds with no transaction fees.
To entice new traders, Ally Invest offers a number of discounts. For instance, it provides a $100 cash incentive on a minimum deposit to the trading account of $10,000. For a cash deposit of more than $2 million, the cash bonus can reach a maximum of $3,000.
To the investors who use sizable amounts of margin, Ally Invest offers reasonable rates on margin lending. For sums up to $10,000, its 7.75 percent margin loan rate is applicable. If more than $1 million is involved, the financing rate drops to 3.25 percent.
Several features are available on Ally Invest’s browser-based trading platform, including real-time data streaming and a personalized dashboard. Ally Invest also offers trading applications for mobile devices, including Ally Mobile and Ally Forex. For a seamless trading experience, it provides 117 charting indicators, 36 drawing tools, and 21 field watchlists. Ally Invest offers average client service. Email, chat, and phone assistance is all available around-the-clock.
For novice investors, E*TRADE offers mutual funds and ETFs, both of which have no transaction fees or commissions. Its ETFs have low expense ratios (like Vanguard’s), and it offers a wide variety of mutual funds. Choose one that charges a fee, though, and each transaction will cost you $19.99.
We particularly appreciate the educational tools E*TRADE offers to investors of all experience levels. The webinars offered by the brokerage on subjects like diversifying a portfolio and developing an income-seeking strategy with ETFs will be helpful to novice inventors. Advanced traders can access resources including the market dashboard and technical charts as well as training on Power E*TRADE, the brokerage’s more sophisticated platform.
While the brokerage’s apps (the basic and Power E*TRADE apps) are quite user-friendly, it may take a little longer to search through the internet to discover what you’re looking for. Given all the other advantages, it’s not a deal-breaker in the extreme. This includes top-notch customer care channels like phone, email, live chat, and physical locations.
A top contender on our list of the top free trading platforms is Fidelity. Although those interested in FX and futures trading will need to search elsewhere, both passive and active traders will discover options suitable for their circumstances.
The company’s customer support is also top-notch; you can get in touch with them by phone, email, live chat, or by visiting one of Fidelity’s physical offices.
Fidelity’s index funds offer no-cost ratios, allowing investors wishing to create a portfolio with almost no fees to do so. The brokerage also provides a wide selection of mutual funds with low expense ratios and no transaction costs.
Advanced and more active traders will find that the research resources offered by third-party vendors like Thomson Reuters, Ned Davis Research, and Recognia are more than adequate. Research tools for ETFs, options and stocks are also available to investors.
Factors for choosing the Best Free Trading Platforms
Despite the fact that all of the brokers on this list are theoretically commission-free, you’ll notice a few elements that have something to do with price. That is due to advising or fund fees, which brokers cannot directly manage or treat differently from commissions.
Some brokerages offer a wealth of analytical tools and resources for market research, helping traders and investors become better at what they do. Others are less forgiving on this front and force their users to look for information elsewhere.
Similar to this, some brokerages feature trading tools that are far more advanced, enabling quick execution and advanced order management. These are the platforms you want to utilize if you’re a serious trader or aspire to be one. You don’t need their firepower if you’re not seeking to outperform the market or make money from quick, time-sensitive bets.
Access to UK-listed equities is available from each of the brokerages on this list. Most also provide access to ETFs with UK listings.
Beyond that, the platform you choose does matter. Your options may be significantly more constrained if you’re looking for quick, inexpensive access to the best alternative investments like forex and cryptocurrency.
The main indicator is whether or not a platform is licensed or regulated; in that case, it raises a red flag. There is no assurance that your cash will be secure on the platform if it isn’t governed or licensed by a financial regulatory body, and you can’t even file a complaint if your broker steals your money. Therefore, make sure any free trading platforms you choose are regulated before using them.
You should also consider the Minimum Investment as a key metric. Make sure the trading platform you select enables you to start with the smallest capital. Naturally, you won’t have much prior trading experience if you’re a newbie. This indicates that there is a potential you could lose more of your investment, or possibly everything. Therefore, it is preferable to start with the least amount possible so that you won’t have to worry about losing it all if you lose it. So, before selecting any trading platform, make sure you can start trading with a minimal investment.
Deposits and Withdrawals
The majority of free platforms allow you to deposit or withdraw money without paying anything. However, a few free trading platforms still impose small withdrawal or deposit fees. For instance, you can deposit money for free using ACH on Robinhood’s free trading platform, but $8 is charged when you use a bank wire.
Every free trading platform provides a range of payment methods for depositing money and withdrawing it. Therefore, before deciding on a trading platform, be sure that it has a selection of payment options that are accepted in your country or location.
Overall, a number of trading platforms provide services for commission-free trading. Traders might need to assess each broker and choose the best one. The six top free trading platforms mentioned in this post provide commission-free trading services. They also have legitimate permits from regulatory agencies and are trustworthy.
We advise beginning traders to use trading platforms with features like automated portfolio management and paper trading. Paper trading aids in the development of suitable trading techniques and the acquisition of trading expertise. If you want a straightforward trading platform, Robinhood is the best option. Ameritrade offers free access to a virtual trading simulator, making it a good alternative for new traders.
Frequently Asked Questions
What is free trading platforms?
When a broker doesn’t charge their own costs for carrying out a trade, this is known as a free trading platform. You might, however, be required to pay third-party fees, such as those for options contracts and mutual fund transactions.
Which fees ought I watch out for when trading?
When trading, there are various commissions charged by each brokerage platform. Investors should consider expenses such as contract fees (for options), brokerage-assisted transactions, the management or advisory fees, and transfer fees in addition to commissions from the brokerage itself (when switching brokerages).
What are expense ratios?
An expense ratio is a yearly fee that investors pay to exchange-traded funds (ETFs) or mutual funds to cover their administrative and operational costs. The number of returns you receive is reduced because this expense, which is indicated as a percentage and deducted from your investment, is incurred.