Choosing the right online stock broker is crucial for investors in the US. The top players like Ally Invest, Robinhood, Vanguard and Fidelity all offer $0 commission trading, but have key differences when it comes to account types, tradable assets, research & tools, and user experience. This article analyzes and compares the pros and cons of these 4 major stock brokers to help investors select the best fit.
Ally Invest offers more account types but limited trading assets; Robinhood leads in user experience
Ally Invest supports more account types beyond basic brokerage, including IRA, while Robinhood only offers brokerage accounts. However, Robinhood supports trading of cryptocurrencies which Ally does not. In terms of fees and commissions, both brokers offer $0 stock and ETF trades. When it comes to user experience though, Robinhood’s clean mobile interface and features like fractional shares make it more appealing to novice investors.
Vanguard shines in index funds but falls short for stock traders; Fidelity excels as full service broker
Vanguard made its name in low-cost index mutual funds and ETFs, but its stock trading capabilities lag peers. Traders need to buy stocks in blocks of 1 share, and options trades incur higher fees. In contrast, Fidelity leads in research reports, trading platforms and investable assets. Its mutual funds marketplace also allows commission-free trading of many funds. Between the two, Vanguard suits long term buy-and-hold investors focused on indexes, while Fidelity is better for active stock and options traders that need robust tools and research.
Main takeaways – choose broker aligning with your investment style and assets
In summary, Robinhood’s user friendly mobile app suits beginner investors looking to trade individual stocks and ETFs. Vanguard appeals to passive index investors with its wide selection of low cost mutual funds. Fidelity and Ally Invest provide more well-rounded offerings across account types, trading assets and market research for investors who desire such capabilities. Analyze your specific investing priorities and match them to the broker that aligns best.
The top US online stock brokers have evolved to offer $0 commissions, but still differ in other aspects critical to investors. Compare your own investing style and priorities against the strengths and weaknesses highlighted for Ally, Robinhood, Vanguard and Fidelity here to determine the best fit.