In this article, we cover some broker promotions and the SmartMoney Survey for online discount brokerages.
Online Discount Brokers
The Smart Money Broker Survey is a great way to find out just how well our favorite brokers have been doing over the past year. Do you know who topped the list for Best Online Brokerage this year? It was ETrade yet again for the third time in a row (Smart Money ranked them #1 in 2007 and 2008 as well)! Great job on hanging on to this award for another year.
For a quick look at who were the best online brokers and the worst ones among the bunch, here’s the list (ranked by scores taken on various categories):
Discount Brokers In SmartMoney’s Broker Survey
| Broker | Commission | Investment Products | Banking Services | Trading Tools | Research | Customer Service |
|---|---|---|---|---|---|---|
| ETrade | $9.99 | 4 stars | 5 stars | 5 stars | 5 stars | 5 stars |
| Fidelity | $10.95 | 5 stars | 5 stars | 5 stars | 5 stars | 4 stars |
| Charles Schwab | $12.95 | 5 stars | 4 stars | 3 stars | 5 stars | 5 stars |
| TradeKing | $4.95 | 3 stars | 2 stars | 5 stars | 3 stars | 5 stars |
| TD Ameritrade | $9.99 | 5 stars | 2 stars | 5 stars | 4 stars | 3 stars |
| Muriel Siebert | $14.95 | 3 stars | 3 stars | 5 stars | 3 stars | 5 stars |
| Scottrade | $7.00 | 4 stars | 1 star | 4 stars | 3 stars | 4 stars |
| Firstrade | $6.95 | 4 stars | 3 stars | 3 stars | 2 stars | 3 stars |
| OptionsXpress | $9.95 | 3 stars | 2 stars | 5 stars | 3 stars | 2 stars |
| Banc of America | $14.00 | 4 stars | 4 stars | 4 stars | 3 stars | 2 stars |
| Just2Trade | $2.50 | 2 stars | 2 stars | 4 stars | 3 stars | 2 stars |
| WellsTrade | $19.95 | 3 stars | 5 stars | 1 star | 4 stars | 3 stars |
| ShareBuilder | $9.95 | 2 stars | 3 stars | 1 star | 1 star | 3 stars |
| WallStreet*E | $9.99 | 4 stars | 3 stars | 3 star | 1 star | 1 star |
| Zecco Trading | $0.00 | 2 stars | 1 star | 2 stars | 1 star | 3 stars |
| SogoTrade | $3.00 | 1 star | 1 star | 2 stars | 1 star | 2 stars |
The Best and Worst Discount Brokers By Investment Category
| Survey Category | Best | Worst |
|---|---|---|
| Commissions & Fees | Just2Trade beats out Zecco this year. | WellsTrade |
| Investment Products & Mutual Funds | Fidelity carries more than 16,000 mutual funds, mostly no-load. | SogoTrade has no mutual funds at all! Well, they cater to active traders. |
| Customer Service | Muriel Siebert edges out TradeKing this year. | WallStreet*E |
| Trading Tools | TD Ameritrade | ShareBuilder |
| Banking Services | ETrade, Fidelity, WellsTrade | SogoTrade and Scottrade |
| Investment Research | ETrade and Charles Schwab | Zecco and WallStreet*E, but improvements are in the works. |
Broker Promotions
A couple of top discount brokers are running some great promotions at this time, which I thought I should mention. Here are some details:
- TradeKing is offering a $50 cash bonus for those opening new accounts. You’ll be eligible to receive $50 after you deposit $2,500 in your new account and make your first trade. Other great offers from TradeKing include a referral fee of $50 for any new investor you refer to them, along with reimbursement of your transfer fees up to $150. Here’s where to sign up.
- OptionsHouse will give 100 free stock trades if you open a new account. OptionsHouse has one of the cheapest flat commission rates around: they charge only $2.95 a trade. They will also reimburse your transfer fees up to $100. Here’s where to sign up.
These offers are only good for a limited time.
Broker Reviews
We’ve also covered more ground on some of them: do check out our reviews on Scottrade, ETrade, TradeKing, OptionsHouse and Zecco for additional information and our thoughts on these sites.
Well, this stuff is pretty eye-opening, in the sense that a lot has happened over the last year that merit giving these brokers a second look to see which ones you should consider doing business with (or which ones to switch to/stay away from). In general though, I believe these companies have fared relatively well, even during tougher times in the financial industry.
For more on the broker survey, check out this link.
- Stock trades: Free stock trades from Zecco, Cheap stock trades from TradeKing, Stock news and Investment info at INO TV Free, No cost Trend Analysis for stocks
- Earn top returns: FNBO Direct [1.90%], HSBC Direct [1.65%], WTDirect [1.76%], E*Trade Bank [0.95%], ING Direct [.25% to 1.65%]
- Cash bonus: Discover More [$50], American Express [$25], Lending Club [$25]
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{ 6 comments… read them below or add one }
I have several e-trade accounts due to stock options and ESPP plans. Their site workd pretty darn good. The commissions are misleading though as I pay 19.99 for my trades. Probably because I do not have a big enough account. As for financial stability, I wouldn’t put them up there as the most stable. They had to take a big investment from Citadel (a huge hedge fund) to stay in business as they got caught up in the sub-prime debacle.
I have always been a big fan of Fidelity. I have some 401K money there and my mother has her accounts there as well. Service has been great but then again, I also think it all depends on your representative regardless of what company you are with.
Eventually TD Ameritrade (in my opinion) will get swallowed up by Toronto Dominion (there majority shareholder) but I don’t think that will be a bad thing. TD is an extremely well run bank.
Thats an interesting status i was not expecting that, some commissions can be misleading however, thanks for the links it will help me and my TRAVELHQR crowd out.
Ameritrade is my choice, not quite the cheapest but the service and execution are second to none. Plus they have great live help.
I have been using E-Trade, ever since they swallowed up my account at Brown & Co.
I have been very happy with their rates, research and trade execution.
I don’t use their banking, but I did just buy 500 shares of their stock.
To be honest, from all the research I’ve done and brokers I’ve reviewed (few more are on the way actually), my favorite so far have been ETrade and TradeKing. They have these few things in common:
1. Well awarded, good reputation
2. Decent transaction fees, commission rates
3. Good customer service
4. Great tools/resources/knowledge center
5. Good site usability
There are other brokers that may fit your needs for one specific reason or another — perhaps options trading is better supported at OptionsXpress or OptionsHouse and cheap stock accumulation would be better served with ShareBuilder. Zecco may still work out for active traders because of the free trading feature. But overall, I like ETrade and TradeKing, but that’s me.
While I really like my broker to be cheap, my favorite one is still Scottrade, because it has a lot of tools for those who are just learning to invest. I can’t say enough about them.