Investing is just as much about finding the best online investing website for your needs as it is about big returns. Use this online investing sites review for your best option.
When people ask me which investing website I recommend, they’re usually surprised to hear that I invest on five online investing sites. I use each for different reasons from access to professional research to lower investing costs and broker fees.
While I like them all, I need to know more about the investor’s needs before I can recommend any discount investing platform.
Why does no one online investing site work for everyone?
The problem is that different investors have different needs. Some investors need live data and analysis for frequent trading while others are more focused on costs. Some investors don’t even want to invest…preferring to go with a robo-advisor or managed investment account.
That’s why I’ve compiled a list of my favorite online investing sites and trading platforms. I don’t use all of these actively but I have opened accounts to test out the service and do a review. Spend a little time reviewing the online brokers for the unique features and costs you need.
Online Investing Sites Review of Low-Cost Investing Websites
I used to trade in and out of stocks in less than a year, buying into the hype they sell on TV about beating the stock market. Like most investors and even many professionals, I ended up losing any extra gains to high trading costs.
Even the discount online investing sites can get expensive if you’re buying and selling stocks every month.
Let’s say you’ve got a $50,000 portfolio of stocks and pay $10 per trade, which is about the average for most online investing websites. Let’s say you manage to make the stock market return of about 7.5% which is pretty good considering most investors seriously underperform the market on bad investing behaviors.
Fidelity data shows the average investor on their investing platform makes 77 trades a year, which would end up costing you $770 and reducing your portfolio gain to just 6.0%…and that’s before taxes.
So how can you use this for better investing?
One of the easiest ways to beat the stock market game is to save money on low-cost investing websites.
Ally Invest qualifies as a discount investing site with its $4.95 per trade commission but also includes a strong trading platform for frequent traders. I opened an account last year on their $150 cash back offer and have kept it open on the ease of use and analysis software.
The Ally Invest Live platform offers real-time streaming quotes, a customized dashboard and lots of other features for traders. It doesn’t require a download so you can access the trading platform from anywhere. The charting tools and technical analysis available is the best among online trading platforms.
Another benefit of Ally Invest is its online social network of traders from which you can trade insights and strategies. It’s a great resource to learn more about trading and discuss different ideas.
While there is no account minimum on Ally Invest, there is an inactivity fee for accounts with no trades over a 12-month period and accounts less than $2,500 combined. It’s not usually a problem for most investors that regularly deposit money and make an investment.
Pros of Ally Invest
- Web-based trading platform can be accessed on-the-go
- Best trading tools among online trading websites
- Low $4.95 per trade makes it one of most inexpensive investing sites
- Social network of traders to learn and discuss strategies
Cons of Ally Invest
- Inactivity fee for accounts less than $2,500 and no trades in a year
- Lack of no-fee ETFs or mutual fund
Swell Investing is a new type of online investing focusing on impact investments and socially-responsible investing (SRI).
The website is a portfolio investment platform, with six funds available around SRI themes. Investors put their money in one or more of the portfolios, getting instant diversification across the theme and pay no transaction costs. The only fee is a 0.75% annual management fee. That’s a fee of $3.75 a year on a $500 investment and no trading costs.
The impact analysis team at the company uses a proprietary set of criteria to screen companies’ environmental, social and governance standards. It then analyzes each company’s fundamentals and outlook to fill the portfolios with smart investments that are also socially-responsible.
This gives Swell investors the kind of professional investment advisory that isn’t available to the average investor. There are no stock screens yet to find companies in the sustainable investing theme. Even if there were, you would still have to do the deep-level analysis of the companies to find the best of breed leaders.
Swell Investing does it all for you. Each of the six impact investing portfolios holds shares in dozens of the best investments in the space.
I invested $500 evenly across the six funds on Swell to test out the site and returns. Funds include Disease Eradication, Healthy Living, Clean Water, Zero Waste, Renewable Energy and Green Tech.
Five of the six portfolios have beaten the Russell 3000 index of stocks since inception. That’s a solid record for any portfolio manager. Swell investors get all this for just a management fee of 0.75% per year, with no other fees to pay.
Pros of investing on Swell
- No per trade commission costs
- Ability to automatically invest in socially-responsible themes and companies
- Low management fee with no other fees
Cons of investing on Swell
- Only invests your money across the six SRI themes and misses a lot of great stocks that don’t meet the criteria
Online Investing Platforms for Alternative Investments
One of the newest types of online investing and one with which most investors aren’t familiar with is real estate crowdfunding through websites like RealtyShares.
Real estate crowdfunding allows you to invest as little as $2,000 in investment properties around the United States. For anyone familiar with real estate investing, this is HUGE!
One of the biggest problems with buying real estate is that you need millions to buy a mixed portfolio of different property types and different locations. Most investors are horribly exposed to a crash of prices in their local area or with one property type.
Real estate crowdfunding gives you instant diversification and you don’t have to worry about the constant hassle of property management. You invest alongside real estate professionals and developers for a debt- or equity-stake in each property.
Real estate crowdfunding just opened up online and I’m shifting a lot of my traditional real estate money that way. Returns are in the double-digits and the investing platform takes care of all the paperwork. You just make the investment and wait for regular returns to be deposited in your bank account.
Browse available investment properties online for free – Open a free account on RealtyShares today
PeerStreet is similar to RealtyShares in that it offers investment into real estate crowdfunding deals but PeerStreet only offers investments in loans. Most loans are short-term (6-24 months) with a loan-to-value of 75% or lower on the property value. Returns on loans range from 7% to 12% and backed by the property for collateral.
I like investing on multiple crowdfunding sites because it gives me access to as many deals as possible. Real estate crowdfunding is still relatively new and each site may only have five or 10 deals available at any given time. There’s no extra cost to having an account and you’re only charged a management fee on money invested.
PeerStreet reviews the track record and background of property borrowers as well as deal financials and licensing. All deals undergo independent underwriting and a valuation process as well as a legal review.
Fees are lower on PeerStreet, generally between 0.25% to 1% on the interest you receive on investments. I’ve found that returns average around 9% annualized after these fees which is extremely good for fixed-income investments and the debt investment helps diversify a portfolio of real estate equity investment.
Pros of Investing on PeerStreet
- Low fees for debt investment compared to other sites
- Ability to diversify property investments with debt investing
- Geographic and property-type diversification
Cons of investing on PeerStreet
- Only offers real estate debt investments so you’ll need to invest on another site for equity investments
Lending Club is the world’s largest peer to peer lending network with more than $18.7 billion in loans originated and nearly $600 million in interest paid to investors. I’ve been a big fan of peer lending ever since I started investing a few years ago and recommend the new asset class to everyone.
Peer loans are unsecured debt, usually to individuals though Lending Club also originates small business loans. A borrower fills out an application, Lending Club checks their credit and other information and then investors bid directly on the loan.
Lending Club handles all the payments from borrowers and passes the money on to you through monthly deposits into your account. You can reinvest the money or withdraw it to your bank account.
With interest rates on bonds scraping 3% and lower, peer lending is a great new asset class to get consistent cash flow and higher returns. I interviewed one peer lending investor that has made over $10,000 through peer loans and a 12% annual return since 2009.
There is no minimum balance to open an online investing account though the minimum investment per loan is $25 and you’ll want to invest in at least 100 loans to get diversification. With that many loans, you don’t have to worry about any particular loan defaulting and will enjoy pretty consistent returns.
Like bond investments, the interest you earn on peer loans is taxable as income so the best way to invest is through a tax-deferred retirement account like an IRA. All your interest grows tax-free until you withdraw it in retirement.
About the biggest drawback to online investing on Lending Club is the lack of research and planning in peer loans. It’s still a new industry so there really aren’t financial advisors to tell you how to invest. I cover a lot of the criteria I use for investing on our sister blog, PeerFinance101, and you really don’t need to create a complicated investing strategy.
Lending Club offers an automated investing process where you set the rules for loans in which you want to invest and the program will do your investing for you.
Pros of Lending Club
- Safety of bond investing with higher returns of between 6% to 12%
- Low fee of 1% on investing accounts and low investing minimums
- Diversifies a stock portfolio with loans on a set repayment schedule
Cons of Lending Club
- Not as much research or planning available in peer loans as with stocks
Online Investing Sites Review of Robo-Advisors and Managed Investments
Robo-Advisors are the popular new way to invest online and the technology has finally caught up with the promise. With the internet revolution, financial advisors went online to offer managed investment planning and computer software has taken over with Robo-Advisors.
Choosing a robo-advisor can be overwhelming because the fees and features are similar but subtle differences will determine which is right for you.
Robo-advisors use a computer program to automatically invest and rebalance your money according to your specific needs and goals. You first answer some basic questions on years to retirement, income goals in retirement, amount you can save each month and your current savings.
The program then maximizes your return while minimizing risk by selecting different funds and the right mix of stocks and bonds. Since the platforms use funds for investing, you get instant diversification. The site also automatically rebalances your investments each year to keep you on track to meet your goals.
Even the Robo-Advisor websites still offer live customer service and advisors to review your investments but most of the work is done by a program that looks at your goals and need for return, then invests your money where it will do the most good.
The Robo-Advisors and managed investment sites cost a little more in fees but are still competitive and are best for people that don’t want to worry about meeting their financial goals. While the Robo-Advisor sites charge higher fees, they might also end up being less expensive than other investing websites if you find yourself trading in and out of stocks.
Robo-Advisor sites only rebalance your portfolio occasionally and won’t weigh your return down with overtrading.
WealthSimple is a newer robo-advisor but one that gets great reviews on its low cost and unique mix of robo-human service. Besides automatically investing your money according to the computer program, the platform has a team of investment advisors to answer your questions through phone, text or email.
The free advisor service has been a great way to bridge the gap between the traditional advisor model and the new robo-advisor revolution. You still get that personal, customized feel with advisors but the lower costs with robo-advising.
After an investor personality questionnaire, your money is invested in between eight to 10 Vanguard funds in stocks and bonds. You pay no trading fees to invest. Instead of paying a per trade commission as with other online investing sites, you pay just 0.5% a year on the money in your account.
That means your total investing expense is going to be $50 for an account with $10,000 invested. By comparison, my trading fees in my E*Trade account were $295…and I still get the $5 per trade price that’s no longer available.
Pros of Investing on WealthSimple
- Low-cost investing just 0.5% a year on account assets
- Stress-free investing with automatic rebalancing every year
- Program automatically buys and sells investments for highest tax savings each year
Cons of Investing on WealthSimple
- Only stocks and bonds are available, no p2p or real estate funds available
Blooom launched in 2014 to solve the confusion and high fees in 401K investing. The 401K advisory is the first robo-advisor to offer flat fee pricing instead of a percentage of your investments.
Rather than an investing platform for your taxable accounts, like most of the sites in this comparison, Blooom works with your 401K plan to make sure your retirement account is on track to reach your goals.
Blooom analyzes your 401K investments to make sure you’re using the lowest-cost funds and that you’re invested in the right assets according to your needs. Then it works like any other robo-advisor, rebalancing your money each year to keep you on track.
Now, Blooom is offering a no-obligation review of your 401k plan to help make sure you’re on track to reach your goals.
You enter your basic information and select the plan sponsor managing your 401k account. Then Blooom analyzes your account versus 25,000 funds to instantly find the hidden fees in your plan.
The whole process takes less than five minutes and will also tell you if you have the right mix of stocks and bonds as well as how to reduce the risk in your retirement investments.
The review will also estimate how much Blooom can save you with its $10 a month 401k management service. It could be quite a lot. To date, Blooom has saved clients a total $518,534,255 with an average 37% reduction in fees.
For a flat fee of $10 a month, Blooom will:
- Constantly monitor and rebalance your retirement account to keep your investments on track, without costing you more in fees
- Decrease hidden investment fees by finding the best, low-cost funds to meet your needs
- Keep your account invested in the appropriate stock/bond mix according to your age and other factors
Maybe the biggest benefit to the service is that you’ll get unlimited online access to a financial advisor. You’ll have the opportunity to ask all those questions you wanted to ask about finances and investments for as long as you’re a Blooom client.
Pros of using Blooom
- Low-cost per month fee instead of a percentage commission
- Only robo-advisor to manage 401K accounts
Cons of using Blooom
- You’ll still need another robo-advisor or other investing site for your taxable accounts
Betterment is the leader in Robo-Advisors and offers some unique features for every type of investor. The investing site customizes your portfolio based on how long you have to your financial goals, how much money you need and your investing risk tolerance. It then invests your money in a diversified portfolio of ETFs to instantly spread risk across hundreds of companies and within the asset classes.
Instead of charging you trading commissions, Betterment only charges a percentage fee on your account each year. This is similar to the way fee-only advisors work. You’re basically paying for investment management rather than stock trading.
You can open an account with no money and the basic service costs just 0.35% annually with a $100 monthly direct deposit. Your annual fees can decrease as your investing account grows, to as low as just 0.15% a year on accounts with a $100,000 minimum.
Since Betterment rebalances your account investments for free whenever they vary from your plan, you never have to worry about reaching your goals or paying too much to get there.
A couple of drawbacks I saw to Betterment is that they don’t offer quite the selection in other asset classes like commodities and real estate. You’re pretty much stuck with the ETFs they offer on the site, which are all low-cost funds and more than most people will need anyway. Since it is an investment in ETFs, you’ll also pay the annual management fee on the fund which will reduce your portfolio return a little.
Betterment can be a completely hands-off way to meet your investing goals. Set up direct deposit and the Robo-Advisor will take care of the rest, investing your money according to your plan and rebalancing when necessary.
Another feature that many will love is the automated tax-loss harvesting. The site will reposition your portfolio each year to get your maximum tax savings by selling some losers. You pay no additional fees on the service and it’s all automated.
Pros of Betterment
- Stress-free investing with automated plan and rebalancing
- Charges annual fee rather than per trading commission
- Automatic plan to save most on taxes
Cons of Betterment
- More limited selection of asset classes compared to other investing sites
- ETF investments charge a management fee along with annual platform fee
Review of Online Sites for Personal Finance
Personal Capital is really two services under one online website, the personal finance management tool and a managed investing account. The free personal finance management tool lets you link up all your financial accounts from credit cards and banking to loans and investments. I linked up 12 separate financial accounts while trying out the service and love that it puts everything in one place.
With all your accounts linked together, Personal Capital makes it easier to budget and keep to your financial goals. The site looks at your regular spending to show you where your money goes and also includes a retirement planner.
Even if you don’t use the online investing services offered by Personal Capital, the free personal finance linking is a great way to see the big picture around your money.
Your investable assets need to be over $25,000 to start using the investing services on Personal Capital but it’s one of the leading online financial managers for those that qualify. You get a dedicated advisor with your account to talk you through financial goals and your investing plan.
Personal Capital is basically the traditional model of fee-only financial advisors in the online space. You schedule an online consultation with your advisor to set out a plan. The advisor then manages everything including asset management, rebalancing and reducing taxes. You’ll get a statement every three months and annually just like you would with any other financial advisor.
Fees are based on your account balance, starting at 0.89% annually for those with $1 million or less and as low as 0.49% for those with $10 million or more. Advisors generally invest your account in individual stocks so there won’t be management fees on ETFs or mutual funds.
Fees for the advisory service on Personal Capital are well below traditional financial advisor fees of up to 2% but still higher than the discount investing sites. I use the personal finance management tool but do my own investing on other sites.
For those that want a hands-off approach to investing and want the traditional financial advisor rather than a Robo-Advisor, Personal Capital is your best bet among online investing resources.
Pros of Personal Capital
- Personal Finance tool links all your accounts to see the big picture
- Fees are lower than traditional financial advisor
- Good tradeoff between lower online costs but personalized advisor service
Cons of Personal Capital
- More expensive than discount broker websites
- Advisors prone to all the mistakes as regular financial advisors and may miss your return goals
Get the big picture and managed investing. Click here for more about Personal Capital.
USAA is better known for its insurance and credit cards but also offers a good online brokerage service. Because they financial services company offers so many different products, prices tend to be cheaper than competitors on lower marketing costs.
Most people don’t realize that you do not need to be connected to the military to take advantage of USAA’s long list of services. Insurance products are still restricted to current or former military and their families but anyone can open an online brokerage account. Customers with a balance over $5,000 also get free checking, a debit card and online bill pay.
You can buy and sell stocks individually on the USAA brokerage platform but I included the website in this section because the company really excels in its customer service and managed accounts. USAA also offers its own list of more than 50 mutual funds including target retirement funds customized for different investor needs.
The excellent customer service and investment management on USAA comes in handy because the other investing tools and resources leave something to be desired. The website is more for people that want to enjoy all the other banking and financial services and don’t want the hassle of having their investment account on a different website. You can open an account with no money though fees are higher until your reach a certain account value.
Overall, USAA is an excellent choice to have all your financial needs under one roof though it lacks some of the advantages of the other online investing sites when it comes to investments.
Pros of USAA
- Huge range of services from credit card to banking and brokerage
- Cost of $8.95 per trade also makes it one of the low-cost online investing sites
- Best customer service among discount broker platforms
Cons of USAA
- No commission-free ETFs available
- Investing calculators and educational resources not as developed as other sites
Online Investing Sites Review of Options and other Investments
Scottrade is one of the investing accounts I’ve kept open for its customer service and unique features but it’s also one of the least expensive online investing sites. The basic commission on stocks is just $7 per trade with competitive pricing on options buying as well.
The biggest advantage of Scottrade besides the low fees on investing is its network of 500+ local offices for in-person support. I’ve been to a few of these offices in Miami and Chicago and was impressed by the level of customer service. Almost all online investing sites offer good phone support but sometimes it’s just nice to sit down with a live person and have them talk you through the answer.
Besides the network of local branches, Scottrade has an excellent selection of investing calculators and tools. The retirement calculator includes all the basic questions like age, goals and your investing assets but also includes a few unique features to help put you on the right path. The calculator then gives you an idea of the likelihood that your plan will be enough with high- and low-estimates.
Scottrade Online Investing Platform
The only drawbacks I found to the stock investing site is the lack of commission-free ETFs or mutual funds offered on some other websites. While investing tools and calculators are a strength, the site doesn’t offer much investing research from Wall Street firms or analysts.
Pros of Scottrade
- Low-cost $7 per trade one of the most inexpensive discount broker websites
- 500+ local offices for in-person support
- Online investing calculators and tools
Cons of Scottrade
- No commission-free ETFs available
- Lack of investing research from analysts
Investing isn’t just about stocks. While most online investing platforms offer access to bonds, real estate and other assets the selection is usually limited and the websites aren’t really set up for investing in other products or assets.
It can be confusing having multiple investment accounts open with different companies but I do it to take advantage of all the benefits on different sites. Rather than invest on a website that tries to be all things to all people, I benefit by getting the very best services for each product. It helps when you can link them all together with something like Personal Capital.
Optionshouse offers investing in stocks just like any online broker but its real advantage is in options trading. While the site excels with its trading platform for buying and selling options, you can also use options to reduce the risk in your other investments. A prior article talks about how to use options investing without gambling and why everyone should be familiar with stock options.
Optionshouse charges just $4.95 per trade and there’s no minimum to open an account. While most other online brokerage sites will charge a maintenance fee if you don’t make so many trades per quarter, there are no hidden fees on Optionshouse.
Of course, the real advantage on the site is the trading platform for options investing. The TradeLAB software shows you profit and breakeven prices, volatility and can run through different scenarios on your investment.
I also like the virtual trading option on the site, allowing you to test out different strategies without risking any money. It’s a great way to learn trading and test out your ideas before you get in over your head.
The drawback of Optionshouse is that it is more suitable for options trading rather than for stocks or other assets. There are no commission-free ETFs available and not quite as much online support as is offered on other discount investing sites. Still, if you’re looking to start stock trading or options investing, it’s definitely one you want to check out.
Pros of Optionshouse
- Just $4.95 per trade plus $0.50 per option contract is one of the least expensive
- Professional platform for investing in options with excellent tools
- Virtual trading to test your strategies before risking your money
Cons of Optionshouse
- No commission-free ETFs available
- No trading available in foreign exchange
Online Investing Sites Review of Websites for Traders
We don’t cover online trading much on My Stock Market Basics but it’s an important part of many investors’ strategy so I thought I would include a few of the best online investing sites for traders. Understand that while I’ve opened accounts on these websites and tried out the services, I haven’t tested the online trading tools.
TradeStation offers a professional-level trading platform for day-traders and those with very short holding periods. The account minimum and monthly platform fee makes it more appropriate for professional traders and those with a very high need for real-time trading data.
If you are serious about day trading or professional investing, the TradeStation platform regularly wins rewards from Barron’s and Investor’s Business Daily for the best trading platform.
The online investing site is really an all-inclusive trading platform with market access to stocks, options, futures and forex investments. The platform also includes a trading simulator to test out your strategies in real-time before putting money at risk.
A feature you won’t find on other trading sites is the ability to program your own trading strategies in the sites coding language and then sell your strategies to other traders. The website offers more than 150 indicators with even more you can create or download and more than 90 years of daily data.
TradeStation per trade fees and platform fees change depending on how much you trade, making it more appropriate for frequent traders and professional investors. The per trade commission starts at $9.99 for investors with less than 10 trades each month but is reduced incrementally down to just $4.99 if you make more than 200 trades a month. The $99.95 monthly platform fee is also waived if you traded more than 5,000 shares in the previous month.
The trading platform is desktop-based meaning you’ll need to download it and some of the features are not available on the web-based version. This makes it more difficult to trade on-the-go but you can still do most of the stuff you need on the mobile app.
Pros of TradeStation
- Professional-level trading platform and analytics
- Educational resources through video tutorials and TradeStation University
- Trader Wiki for tips and strategies from other traders
Cons of TradeStation
- Expensive for investors not trading high volume
- Fewer features on the mobile app and web-based platform compared to desktop
No online investing site is perfect but they really don’t have to be. Your own needs and investing style will determine which online investing platform best meets your needs, whether it’s one of the discount brokers or a professional-level site that might be a little more expensive. Spend a little time to research and pick the best investing website for your needs. Successful investing isn’t only about profits but about saving money and getting the best features for your needs.