Avoiding high investment fees when you buy stocks online lets you invest more cash. In turn, this helps you grow your wealth faster.
Being able to invest in stocks for free is good news whether you’re a new investor or have a large account balance. It used to be common to pay a $5 trade commission to buy or sell stocks and funds.
Today, many investing apps let you buy fractional shares and whole shares of stocks and ETFs commission-free.
Where to Trade Stocks for Free
These online stock brokerages let you buy or sell stocks and funds for free without monthly service fees. Each platform offers different features and investing tools.
1. Vanguard
Vanguard is a favorite investing platform for many index fund investors. They offer free stock and ETF trades. Taxable and retirement accounts are available as well.
You might choose Vanguard if you primarily want to invest in index funds but periodically buy stocks online. It can be easier to research Vanguard funds compared to other brokers so you can invest like a Boglehead.
Stocks and ETFs are only available as whole shares at Vanguard. The research tools are good for casual stock investors, but other brokers are stronger.
The investment minimum for most index mutual funds is $3,000, yet only $1 for additional investments. If you can afford the high upfront minimum, mutual funds can be better than buying full shares of similar index ETFs.
Minimum investment: $0
Read our Fidelity vs. Vanguard comparison to decide which platform is better.
2. TD Ameritrade
TD Ameritrade can be a good brokerage for any investor due to its investment options and research tools.
New investors may appreciate the educational resources and webinars offered by TD Ameritrade. Investors can read third-party research reports and track market news.
There are no trade commissions for stocks and ETFs, but the platform doesn’t support fractional investing. Most platforms offer fractional investing to some extent.
TD Ameritrade has some of the best stock research tools for buying stocks and ETFs. Active traders will appreciate the thinkorswim platform for its charting and market research capabilities.
Minimum investment: $0
3. E*TRADE
E*TRADE lets you open a taxable brokerage or retirement account with a $0 opening deposit. You will need to buy entire shares of stocks and ETFs.
While you don’t get fractional investing, the brokerage offers extensive research tools and educational materials. There are also dedicated platforms for active traders.
You can open managed Core Portfolios with a $500 investment minimum. Mutual funds are available as well. Investment minimums vary.
As a traditional online brokerage, E*TRADE also offers an FDIC-insured free checking account and an online savings account.
This service can be a good option if you want your investments and bank account in one place.
Minimum investment: $0
4. Ally Invest
Ally Invest can be an excellent choice if you use Ally Bank for its high-yield savings account and bank CDs.
There isn’t a minimum initial deposit for a self-directed account to buy stocks and funds. You will need to deposit at least $100 into a Managed Portfolio if you also want a robo-advisor to help you grow your investments.
Self-directed accounts don’t offer fractional investing, but you won’t pay trade commissions for stocks and ETFs. Trading commissions apply to mutual funds and stocks trading below $2 per share.
These “penny stocks” can be volatile and have low trading volume. Most investors avoid these stocks to reduce investment risk.
The service has impressive research tools, including:
- Interactive charts
- Profit/loss graph
- Probability calculator
- Third-party research tools
These research tools are competitive with most traditional online brokers.
You may also appreciate the Managed Portfolios for an automated investment experience. Some portfolios have no annual advisory fees but maintain a minimum 20% cash cushion.
Minimum investment: $0 (Self-Directed) or $100 (Managed Portfolio)
5. Robinhood
Robinhood is one of the oldest free investing apps but only offers taxable brokerage accounts. The micro-investing platform lets you invest as little as $1 into stocks and ETFs.
This low investment minimum can make it easy to buy stocks online that investing newsletters deem winners.
Robinhood doesn’t recommend stocks, but you can see the most popular stocks other members are buying. When researching a specific stock, the service shows other popular stocks that investors own as well.
One downside of Robinhood is its minimal research tools. You can see a basic price chart and recent market headlines but will need to conduct additional research elsewhere.
Minimum investment: $0
6. Fidelity
Fidelity is one of the oldest discount brokerages and has more investment options than most investment platforms. Taxable and retirement accounts are available.
With a $1 minimum investment, you can buy fractional shares of over 7,000 stocks and ETFs when using the Fidelity mobile app. Investors can only purchase whole shares when using the Fidelity web platform.
The app also lets you place buy and sell orders on-demand instead of being restricted to a narrow trading window.
It’s possible to buy Fidelity ZERO index mutual funds with no mutual fund fees. The investment minimum is $1 to open a position and buy future shares.
Fidelity offers more robust research tools than most free investing apps. You can access third-party analyst reports and technical charting tools.
Minimum investment: $0
7. Schwab
Schwab is another popular online brokerage with no account minimums for taxable or retirement accounts. There are many investment options for stocks and funds.
Fractional investing is available with a $5 minimum investment, but this is only offered for S&P 500 stocks. Non-S&P 500 stocks and ETFs require buying whole shares.
You can also buy Schwab-managed stock mutual funds. These funds may have an investment minimum of $500 and $1 for follow-up investments.
Schwab provides some of the best stock screener tools and third-party research reports.
Minimum investment: $0
8. SoFi Invest
SoFi Invest offers Active Investing and Automated Investing accounts. You will need to open an Active Investing account to buy individual stocks and ETFs.
The account minimum is $0 for taxable and retirement accounts with a $1 investment minimum.
However, only stocks and funds in its Stock Bits program qualify for fractional investing. Approximately 50 tickers qualify for the $1 minimum investment.
Other stocks and funds require buying whole shares.
The research tools are limited yet competitive with other micro-investing apps.
You may consider SoFi Invest if you have a SoFi student loan or personal loan. You can earn rewards points for investing that you can use to get free stock or make extra loan payments.
Minimum investment: $0
9. Webull
Webull is a good option for investors wanting a trading simulator and charting tools that rival most traditional brokers. Traders can also buy stocks online during extended market hours.
With Webull, you can only buy whole shares of ETFs and stocks. Despite not being the easiest platform to invest small amounts of money, Webull is a popular Robinhood alternative.
The account minimum is $0 for taxable and retirement accounts. It’s also possible to get at least two free stocks when opening a new account. However, you may need to deposit at least $100 to earn the full bonus.
Minimum investment: $0
10. Public
Investors looking to interact with other community members should consider Public. This micro-investing app lets you buy stocks and ETFs with a $1 minimum.
Only taxable accounts are available, but you can invest in stocks and ETFs.
As Public is a micro-investing app, it doesn’t offer extensive research tools and mutual funds like a traditional online broker.
One advantage of investing with Public is its social media community. You can interact with other investors and see how they invest.
This app is free to use, but you can leave a tip to help pay for costs. Unlike other free investing apps, Public doesn’t make money by selling trades to market makers.
Minimum investment: $0
11. M1 Finance
M1 Finance offers fractional investing for stocks, ETFs and custom funds. You build your portfolio and assign a target asset allocation for each position.
This investing app is similar to a robo-advisor since it rebalances your portfolio with each new investment. The service buys shares of assets below their target allocation but doesn’t sell shares to avoid taxable events.
There are over 80 managed funds that pursue different strategies, including target-date retirement and socially-conscious investing. You may appreciate this investment option if you want a “hands-off” approach.
The minimum initial investment is $100 for taxable accounts and $500 for retirement accounts, but you can open either account for free to start building your portfolio. Subsequent investments only require a $25 cash deposit.
Active traders should avoid M1 Finance as there is only one daily trading window at 9:30 a.m. EST. You must submit your trade requests before the stock market opens.
M1 Plus
Upgrading to M1 Plus ($125/year) lets investors access an afternoon trading window if they miss the morning window. Only portfolio balances higher than $25,000 can trade during both daily trading windows.
Other M1 Plus benefits include:
- Interest-bearing checking account
- Rewards debit card
- Custodial investment accounts
- Advanced money transfer rules
The free version of M1 Finance offers a free checking account. But this account doesn’t earn interest or debit card rewards.
Minimum investment: $100 (taxable) and $500 (retirement accounts)
How to Buy Stocks Online
Buying stocks can be as simple as making an Amazon purchase. But choosing the best broker and investment options is important so you can build wealth.
Here is the start-to-finish process of buying your first stock with any of the best free investing apps.
1. Choose an Online Broker
Most brokers offer similar stock and ETF investment options without trade commissions. Some apps may not offer less frequently traded or more volatile stocks such as penny stocks and over-the-counter (OTC) stocks.
You should compare these factors to find the best broker:
- Account options
- Account minimums
- Fractional investing options
- Investment options
- Trading windows
- Research tools
- Educational resources
Brokerages are continually changing their investment and platform features as trends change. Take the time to compare the best options for your investment style to avoid transferring your balance to a better broker later.
Your decision may come down to whether or not a broker offers fractional investing and in-depth research tools. These features can help you invest small amounts of money and avoid spending extra for third-party research tools.
2. Research Potential Investments
Many investing apps have a basic stock screener to find stocks that meet your essential criteria.
Some of the better platforms offer these research tools:
- Interactive charts
- Fundamental data
- Stock-related news articles
- Stock ratings
- Third-party analyst reports
It’s important to research potential investments to understand the possible risks and rewards. The research can also help you decide if the stock or fund fits your investment strategy.
3. Stocks or ETFs?
You can invest in equity stocks by buying individual stocks or ETFs.
An individual stock can be a better option if you want exposure to a specific company. However, single stocks can be riskier than stock funds that offer more diversification.
Stock ETFs might be the better option if you want to invest in multiple companies with a single investment. You earn fewer shares of each company, but your portfolio has more diversification to reduce investment risk.
New investors may start with stock index ETFs to build a diversified portfolio. They can eventually begin investing in stocks and may use a stock picking service to get investment ideas.
4. Placing Stock Trades
Most investing apps let you buy stocks online during normal market hours. In many cases, you place a “market” order that buys stocks at the current market price.
Some apps, like Webull or Robinhood, let you place limit orders that only buy stocks up to a maximum price. This order type can help you avoid paying too much for a stock with a volatile share price.
A few investing apps only have a narrow trading window. For example, investors using M1 Finance will need to place their trades by 9:29 a.m. Eastern as the service executes orders when the market opens at 9:30.
5. Track Investment Performance
It’s also important to track the performance of your investments. Online brokers show your daily and lifetime investment returns.
You might use investment tracking apps to monitor your performance if you have multiple investment accounts. These services may also be able to track your net worth and savings account balances.
6. Selling Stocks
It’s important to research potential stock investments to understand the investment and your investing goals. You should also decide why you might sell an investment.
Some stocks and funds remain in your portfolio into retirement. Other assets may only be in your portfolio for several months or years if your investment strategy changes.
It’s free to sell stocks, but sold investments are a reportable tax event in taxable brokerage accounts. You will need to report your capital gains and losses on your next tax return.
Investing with an IRA can help you avoid paying taxes each time you sell stocks and funds.
Summary
Most investing platforms make it easy to buy stocks online for free. However, the investment options and research tools can vary.
Any brokerage can help you earn passive income, but take the time to find the best option for your investment style.
You can maximize your investment performance with an app that offers the products and research tools for your needs.
