There are dozens of trading apps and platforms that allow investors to invest cash in a variety of securities with minimal to no fees. With the increase in choices, here are the best free stock-trading platforms and how they compare.
7 Best Free Stock Trading Platforms
Whether you're a beginner investor or have been playing the market since before the last recession, free stock trading platforms and apps provide a great opportunity to maximize your returns and keep trading easy and simple.
These investment platforms are top-notch.
Although E*TRADE (ETFC) - Get Report accounts aren't always free, there are some promotions and accounts that allow investors to invest for free. Currently, E*TRADE is having a promotion when you open a new account. The promotion offers 60 days of commission-free trading for up to 500 trades with a minimum deposit of $10,000 or more.
The site offers 24/7 customer service, easy mobile trading, data and research information, and has trading vehicles that range from ETFs to options. And while E*TRADE's commissions usually hit just under the $7 mark for normal (nonpromotional) trades, the site is still very popular for its ease of use and retirement services.
The free stock trading app has seen a meteoric rise in popularity in recent years, accumulating 6 million users in 2019 - and with good reason. Robinhood seems to be the darling of commission-free trading - as a fintech startup founded by Baiju Bhatt and Vlad Tenev in 2013 with their free stock trading model.
Although there has been some speculation over how Robinhood makes money (given their free trading model), the app is very popular for its easy, free trading and variety of investment vehicles - including options and even cryptocurrency.
To get started, you simply have to submit an application to Robinhood and meet a few basic requirements (although if you are planning to participate in options trading, additional requirements are necessary) - with no account minimum. As a bonus, there are no maintenance fees.
As somewhat of a drawback, Robinhood doesn't currently allow fractional investing (you can only buy whole shares). But for its cost-efficiency and easily-accessible app format, Robinhood is clearly a crowd favorite for a reason.
3. Charles Schwab
Ideal for investors looking to get into ETFs, Charles Schwab (SCHW) - Get Report has an impressive array of 200 ETFs to choose from, all commission-free. And, as a bank and stockbroker all-in-one, the Schwab app is a great one-stop-shop for investors.
Schwab also has no-transaction-fee mutual funds, with around 4,000 available. Their regular trades will set you back around $5 apiece. There is no minimum balance requirement (although normal accounts typically come with a $1,000 minimum).
Because of their wide selection of the commission-free ETFs and mutual funds, Schwab is a strong contender for free stock trading.
If you're a beginner investor looking to make money in stocks, Acorns is the perfect introductory stock trading app.
Acorns specializes in micro-investing - that is, investing your spare change in stocks. There is no minimum to create an account, but there is a $5 minimum to start investing.
The app takes the spare change you've got from linked debit or credit cards to invest in commission-free ETFs. There are no fees for inactivity.
Boasting around 1,800 commission-free ETFs (just shy of Robinhood's 2,000,) Vanguard offers a wide selection of free trading options. The platform offers over 3,000 transaction-free mutual funds to boot - including S&P 500 index funds.
The trading platform doesn't have a minimum account requirement, but they do charge $20 a year for a service fee.
6. TD Ameritrade
Much like E*TRADE, TD Ameritrade (AMTD) - Get Report offers a free trading promotional if you open an account. You can get up to 60 days of commission-free trading for options, ETFs and other equities, as well as up to $600 if you deposit $3,000 or more.
And even when the 60 days runs out, trades average about $6.95 a trade - on par with several other competitors. But TD Ameritrade also offers over 300 commission-free ETFs, and hundreds of transaction-fee-free mutual funds to choose from.
As one of the biggest online trading platforms, TD Ameritrade offers a variety of top-notch services including research, data, and information on stocks as well as cash management, among others.
7. M1 Finance
M1 Finance does things a bit differently (think: customization.)
In addition to being completely commission-free and fee-free, M1 Finance allows investors to invest in fractional shares as small as one penny. And, what makes M1 Finance different is it allows users to create "pies" - that is, pie graphs that are comprised of a variety of ETFs, stocks, and bonds. The app also allows users to choose different kinds of pies based on their investment needs and risk tolerance.
Although there is a $100 minimum for investing, the app allows for total customization of your own portfolio, and offers different kinds of "pies" from moderate to "ultra-aggressive" or "Market Cap 100."
For a completely free, zero-commission stock trading app, M1 Finance seems to offer a pretty good deal for the DIY investor.
The Bottom Line
So, which free stock trading platform is best for you?
While some platforms like TD Ameritrade and E*TRADE only offer short-term free stock trading services through promotions or new accounts, they do offer some industry-leading services that may be worth the extra cost you'll incur when your trial run ends.
However, for the investor who wants a truly free stock trading experience, Robinhood, Acorns and M1 Finance offer a formidable range of services and offerings - even including cryptocurrency and options. And, as trading is increasingly becoming mobile, these app-focused companies are optimized to provide a solid, easy-to-use trading experience from the comfort of your iOS or Android-enabled device.
Still, as always, it is important to examine your personal investment goals and be realistic about how much you are willing to pay for extra services (if you do opt for one of the bigger brokerage names). But thanks to the surge of fintech companies in recent years, there are plenty of investment options that offer free stock trading services that can help grow your returns - all with the touch of a button.