Compare the 5 Best Online Brokers

Hey everyone, thanks for joining us for this weeks review. Today, we’re going to try something a little different. Throughout the past several months, we’ve been reviewing all kinds of investment platforms and brokers. So, today, we’re going to pick out what we believe to be your 5 best online brokers, and compare them against each other.

What Are The 5 Best Online Broker Options?

As you know, we’ve done tons of these reviews. After going through all of the broker and investment platform reviews that we’ve done, we’ve finally dialed the list down to the top 5. They include everything from peer to peer investment platforms to online brokers and more. So, what are they? Below is our list. Keep in mind that this list is in no particular order. They are our favorites, but choosing just one is going to be up to you. Hopefully this comparison will help.

  1. Prosper – Prosper is a peer to peer lending service. They are arguably one of the largest, and oldest options for peer to peer lending out there. To read our full review of Prosper, click here!
  2. Betterment – Betterment is a stock market investment broker. However, they take a very unique approach. Instead of choosing stocks one by one, all you need to do is set the allocation of stocks and bonds. This is why they promote their services as “Perfect for busy investors”. To read our full review of Betterment, >click here!
  3. TradeKing – Tradeking is a discount investment broker offering a wide range of investment options. Through TradeKing, you can focus on everything from long term investing to day trading and just about everything in between. The company is known for its incredibly low trade fees, wide range of asset options and more. To read our full review of TradeKing, >click here!
  4. TD Ameritrade – If you’re looking for a trusted broker that’s been around for a long time, TD Ameritrade is a great option. Unlike many of the others in the industry, TD Ameritrade doesn’t To read our full review of TD Ameritrade, >click here!
  5. OptionsHouse – If you’re looking for a broker that will allow you to veer off of the beaten path and take a less traditional stance on investing, you’re looking for OptionsHouse. Instead of focusing on stocks, bonds and ETFs, OptionsHouse focuses on options and futures contracts. Like the others mentioned here, their fees are more than reasonable and they have an incredible user platform. To read our full review of OptionsHouse, >click here!

 

A Comparison Of Online Broker Costs

Below, we’re going to give you a chart that tells you a bit about the differences in cost with these different platforms. When it comes to cost, most online investment platforms will reduce the price with high volume. That being said, please keep in mind that this chart is for their lowest volume, highest cost. If you’re a high volume investor, these numbers will most likely be much lower with all platforms.

ProsperBettermentTradeKingTD AmeritradeOptionsHouse
StockN/AN/A$4.95$9.95$4.95
OptionsN/AN/A$4.95$9.95$4.95
Options Contract FeeN/AN/A$0.65$0.75-1.25$0.50
Broker Assisted TradesN/AN/AStandardStandardStandard
Annual Membership Fee1% of principal
balance.
.35% of total
balance.
$50 if inactiveN/AN/A

 

Now, Lets Compare the Best Online Brokers

All of our top 5 investment options offer various services. Some may overlap services, while others offer something completely different. That being said, putting the services into chart form like I did above would be not only a pain to do, but it’d also be a pain for you to read. So, instead, below you’ll see the names of each of these options followed by the services they offer.

Prosper Services – Prosper is a peer to peer lending company that offers services to both investors and borrowers. In their platform, investors are able to search through borrowers that need loans, and choose the loans that they’d like to fund. In turn, the borrower repays the investor with added interest.

Aside from their standard peer to peer lending services, Prosper offers a secondary market to help liquidate investments when needed. So, if you need to liquidate, you have the option of selling your lending contract to another investor. However, be prepared to take a loss if you need to liquidate before the investment matures.

Betterment Services – Betterment offers services that they say are designed for “busy investors”. However, busy investors aren’t the only investors that can benefit from their services. I’ve found that they are great for the new investors as well. When it comes to services, they offer only one. It’s a pooled investment system. This means that you give Betterment the money you would like to invest. They in turn invest that money into their pool of stocks and bonds. All you need to do is adjust the allocation of your money in stocks and bonds, they will do the rest.

TradeKing Services – TradeKing offers a wide range of services. These services include stocks, options, forex, mutual funds and far more. One thing I really like about the service they offer is that they’re not just a broker with a trading platform. The company offers in depth tutorials that teach beginners how to make their way around the market. Finally, with the company offers top notch customer service should you have any questions or concerns.

TD Ameritrade Services – TD Ameritrade is a great place to go if you’re looking for a way to take advantage of market movements in a traditional sense. The company focuses on a wide range of investment products, including stocks, bonds, annuities, ETF’s, and far more. However, it’s not just the ability to trade a wide range of assets that’s interesting with TD Ameritrade.

The platform at TD Ameritrade is incredible. They offer very unique features that will help investors and traders invest like the pros. Aside from the standard online and mobile platforms, TD Ameritrade offers ThinkorSwim as well as Trade Architect. Both of these programs are designed to help you take full advantage of market trends.

OptionsHouse Services – OptionsHouse focuses heavily on options and futures contracts. In fact, the broker has been ranked as the best for Options traders. Options and futures are a great way to diversify a portfolio as well as make make money while markets are trending downward. With an incredible platform, great customer service and a wide range of assets to trade, OptionsHouse is a great way to go!

Drawbacks Of Each Investment Broker

As you probably already know by now, there is no investment service that is a one size fits all option. That being said, they are all going to have their own, unique disadvantages, just like they all have their own unique advantages. That being said, below is a list of the things that we don’t like about each different option in our list of the 5 best online investment platforms!

Prosper Cons – Prosper is a peer to peer investment platform. That being said, there is no guarantee that your peers are going to pay you back. Although, this isn’t a huge drawback, it’s definitely something to think about. The reason I say it’s not huge is because there’s no guarantee that any of your investments will pan out. Even in the stock market, a company could go out of business and you could lose it all. As with any other form of investment, to protect your investments with Prosper, it’s important to diversify.

Betterment Cons – The cost is the biggest drawback with this option. Their prices are relatively straightforward. You’ll pay a percentage of your total balance as an annual fee. However, if you really delve into the numbers, it’s easy to see that the cost of investing with Betterment is a little higher than the cost of choosing your own stocks and bonds through another platform. Essentially, you’re paying this added cost to reduce the headache associated with choosing and tracking your own investments. Although the price is a bit higher than average, for many busy people, it’s worth paying to avoid spending so much time in another platform.

TradeKing Cons – While TradeKing is one of the brokers with the most competitive fees on the market, there are some drawbacks. First of all, the company doesn’t offer futures. Also while trading fees are low, the IRA fees offered are incredibly high. So, this isn’t a great place for IRA investing. Finally, if you hold less than $2,500 in your account and are inactive for a period of 12 months or more, you will be charged an inactivity fee.

TD Ameritrade Cons – When it comes to TD Ameritrade, there was only one thing that I could find that I didn’t like. While when compared against all brokers, TD Ameritrade fees are competitive. However, when compared to online discount brokers only, the fees at TD Ameritrade are among the highest that you will find yourself paying.

OptionsHouse Cons – When it comes to OptionsHouse, they could work harder on offering educational services. While they do offer educational tutorials, they unfortunately lack depth in this area. Also, the mutual funds offered are incredibly limited. I also wasn’t a fan of the limited trade times. Most online brokers offer trading until 8 pm. Unfortunately, OptionsHouse only allows trading until 5pm eastern time.

Who Should Consider Which Online Broker?

Before I get into this, I’ve gotta bring up a cheesy disclaimer. The truth is, everyone has a very unique financial portfolio. Without looking directly into your portfolio, I can’t tell you exactly what you need. That being said, below, I’m going to go over who I think each broker is best for. However, the ultimate decision to choose one broker over another is your decision to make. That being said, let’s jump right into who I think each option is best for…

Prosper – Prosper is one of those options that can be good or bad for anyone depending on what you’re looking for. If you want to find an alternative to investing in the stock market, this is a great way to go for you.

Betterment – Betterment boasts that their platform is best for busy investors. That, I’ve got to agree with. It’s just very simple to go in and manage your investments in a very short period of time. However, I think they’re missing another market entirely. When it comes down to it, in my humble opinion, Betterment is great for new investors too!

TradeKing – TradeKing is a great place for active traders. If you plan on actively managing your account, day trading, or doing anything other than long-term investing, TradeKing is a great way to go. However, if you’re looking into long term investing, you may want to choose another option as TradeKing will charge fees for inactivity.

TD Ameritrade – TD Ameritrade is a great broker that has built an incredible name for itself. It offers incredible tools for beginners and pros alike. However, when compared to other online discount brokers, their fees are a bit high. Therefore, if you’re willing to pay a slight premium for quality, knowledge and increased abilities to earn, TD Ameritrade is the way to go.

OptionsHouse – OptionsHouse is a great brokers for those that like to think outside the box. Because OptionsHouse is focused on derivative investment options, it’s not one for those looking for traditional investing experiences. However, if you’re looking to get into the derivatives market, you may want to consider OptionsHouse as it is considered one of the best in the industry.

Final Thoughts

Wow, I had a great time coming up with this post! I hope that this comparison offered everything that you need to get a good idea of who to work with.

Reader Question

Do you invest with any of these options? If so, who, and how are your experiences with them? If not, after reading this, which do you think will be the best online broker for you and why?

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