Best online brokers 2016 kiplinger

You are using an outdated browser. Please upgrade your browser to improve your experience. Fidelity edges out Merrill Edge and Schwab for first place in our rankings of top discount brokerages. By Daren Fonda , Associate Editor From Kiplinger's Personal Finance, August Investors can pocket a few hundred bucks just by opening an account with an online broker these days.

Low commissions to trade stocks or exchange-traded funds can save you more money in the long run. So what makes for a first-rate broker? It depends on what you value. Low fees may be critical for active traders, but buy-and-hold types may want an array of no-transaction-fee mutual funds. Brokers with unbeatable prices may lack the retirement-planning tools or advisory services you need.

Compare the Best Online Brokers. To help you choose, we rounded up data from seven of the biggest brokers in the business: A firm had to offer online trading of stocks, ETFs, funds and individual bonds to be included in the rankings.

Rowe Price and USAA all declined to participate. We also excluded some brokers that focus primarily on active traders and lack a full suite of investment choices and services. Although the results are close in most categories, Fidelity slips past Merrill Edge and Schwab for first place in our survey, featuring the best overall mix of investment products, retirement-planning tools and services.

But its prices are close enough in other areas to be competitive with lower-cost brokers. Furthermore, Fidelity wins points for its full range of retirement and advisory services, along with top-notch investing tools and customer service. Merrill and Schwab wind up in a dead heat for second place, though Merrill edges ahead by a whisker in the scoring.

Merrill takes top honors in the research category, charges some of the lowest prices to trade stocks, exchange-traded funds and mutual funds, and features a robust set of online tools. Keep in mind that our survey results combine objective and subjective criteria. Not everyone will agree with how we weighted the categories. And the results are so close that a slight bump in one category would lift the rankings for some firms. Their prices have stayed flat since then.

Fees decline for bigger accounts. Brokers also pad their wallets with fees and hidden charges. No firm levies a fee for a low account balance. Plus, bond pricing is opaque at Merrill and TD. Both firms pack an undisclosed markup into market prices of corporate and municipal bonds. You can find thousands of funds, stocks and bonds at every broker in our survey.

By these criteria, Fidelity muscles its way to the top of the category. With a roster of 3, no-transaction-fee funds, Fidelity beats every other broker. Using the same measure, Schwab comes in at second place, with 3, no-fee mutual funds, followed by TD 3, Ranked last is Vanguard, with just 1, no-fee funds. Schwab takes the prize for offering the most commission-free ETFs, with , including funds from iShares, PowerShares, State Street and WisdomTree.

Vanguard customers can buy any of its 70 ETFs commission-free—a good deal, considering that they also have ultralow expense ratios. Fidelity and Schwab narrowly beat the competition in some other areas. For example, both provide online access to more foreign stock exchanges than other brokers. Fidelity also doled out the most initial public offerings from the start of through , trouncing Merrill and Schwab Need help figuring out whether it pays to refinance a mortgage?

What are the best ETFs for the buck? Most brokers earn high marks for their calculators, financial planning tools, and stock and bond screeners. Scottrade and Vanguard are notable laggards, furnishing fewer tools and screeners than their competitors.

Kiplinger Best Online Brokers Ratings

Fidelity earns a slight edge in this arena for its broad selection of tools, most of which are intuitive and easy to find on the site, and some of which extend well beyond investing and retirement planning. Merrill offers a similar tool.

Best Online Brokers

None of the other brokers has anything comparable. On all sites, basic facts about stocks, bonds and funds abound. But only a few firms supplement the standard data with more information from major Wall Street investment banks.

Schwab and TD Ameritrade provide comprehensive stock research from Credit Suisse to all brokerage clients. Scottrade and Vanguard provide minimal stock and fund research. That leaves Merrill as the runaway winner in this category.

One hot new tidbit: On Fidelity and TD, customers can see how a stock is trending on sites such as Twitter. Brokers aim to make their sites user-friendly.

But some are so convoluted—packed with news, charts and data—that they can strain your eyes. For overall ease of use, Fidelity racks up the highest marks.

Fidelity does trail the competition in some areas. Schwab and Merrill both report hold times for phone service averaging 31 seconds or less, beating Scottrade 42 , Fidelity 58 and Vanguard Scottrade scores well with offices, more than every firm except Merrill, which provides brokerage services through 2, Bank of America branches.

The brokers in our survey all offer apps to allow customers to trade and conduct other business on a mobile device. All except Vanguard let you log in with a fingerprint. And the apps can be handy for banking: Investors can pay bills, transfer funds and scan checks for deposit though Vanguard enables mobile check deposit only for clients who hold exclusively Vanguard funds or ETFs.

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And investors can scan a product barcode to pull up stock information a feature TD provides, too. None shows a detailed analysis of your portfolio or lets you trade bonds. Fidelity and Vanguard earn the top spots in this category, trailed closely by Schwab.

Fidelity racks up points for its menu of managed accounts, including one that focuses on muni bonds and another on income-oriented ETFs.

The accounts hold only Vanguard funds that mainly track market indexes. With most active managers failing to beat their benchmarks, sticking with broad-market index funds can be a good way to pocket more money in the long run. These 5 Vanguard Index Funds Are All You Need. Toggle navigation Menu Subscribers Log In. Sections Close Menu Wealth Creation Investing Retirement Taxes Your Money Your Business Magazine Contents.

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