5 Best Online Brokers for ETF Investing in 2023
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There is nothing like an explosion of stock market news to leave you thinking, “Um, who’s the best online broker to get a piece of that action?” That’s the feeling a lot of people are experiencing reading about the Dow jumping 200 points and S&P 500 seven straight all-time highs.
And by the time, you think you sort of knew what the deal was with the market, the headline read of ETF growing at a record pace. Now it comes as a surprise that investors are flocking to the best online brokers for ETF investing in record numbers.
That’s not to say you can expect private jet money from investing in an ETF: rather investing your money safely in a low-risk, low-fees savings account at Fort Knox. Now, you might be wondering: How do you get started with ETF investing? Well, find a good broker.
Even those investors with a deep affinity for physical brokers have to admit that it’s hard to rest the lure of online brokers for ETF investing. Accessing the best ETFs at the tap of a touchscreen means it has never been easier to hunt down the best wealth opportunities.
Table of Contents
Best Online Brokers for ETF Investing
5 Best Online Brokers for ETF Investing
#1. Top Overall Online Broker Choice: Interactive Brokers
Interactive Brokers’ main selling point is it’s easy to jump into – so long as you can create an account. Even among leading online ETF investing brokers, this broker stands out. It has a smooth interface that makes you feel at home at the heart of complex finance.
The trading interface has simplified the interactions with tables, filters, and searches down from an advanced level platform, but doesn’t lose any functionality. You can still do all of the same things with this broker as could be done with advanced options.
It nails what matters and is popular for what it is as much as what it is not. Yes, that’s exactly what to look for in the best broker overall – one that can make investing in ETFs less scary if you are the kind of person (isn’t everyone?) who needs some encouragement.
How does it work?
Interactive Brokers has one very simple job: taking your investing to the next level. That’s it! Sure enough, you can forget about a complicated account opening process. It’s easy to set up an account and connect it to your bank or payment source. Here’s everything you need:
- A valid email address and other contact information
- Be at least 18 years old and older
- A citizen of a country in good standing with the U.S Office of Foreign Assets Control
- Have a government-issued identification card
Are you sold on an idea that’ll make you a millionaire (someday in the future) yet? Fast forward to funding your account, you may need to convert the currency to match the one on the target ETF. You can do it on the platform itself.
The search function will filter through ETFs from over 80 markets. Next, set the amount you want to buy and make an order type. Now you get the drift: confirm your order and submit to complete. Sure, ETF investing is a little more complicated than that – but that’s it.
Pros
- Access to international markets
- Multiple tradeable asset classes
- Superior order execution
- Sophisticated trading tools
- Detailed mobile app
- Low margin interest rates
Cons
- Works better for intermediate level investing experience
Commission & Fees
This simple pleasure comes in different shapes and sizes. The IBKR Pro account charges a commission of $0.0005 to $0.0035 per share on ETFs. Plus, you can’t put a price on the IB SmartRouting system access, which finds the best prices for immediate order execution.
It’s a steal. But there’s more: the IBKR Lite account enjoys a $0 commission for holding US-listed ETFs for at least 30 days. There is no account minimum, no inactivity fees. It’s worth everything without costing a single dime.
>>Read more About Interactive Brokers Review: Is it the Lowest Cost Online Stock Platform?
#2. Best Advanced for Non-US Traders: Avatrade
AvaTrade is invaluable for not only integrating advanced tools but also providing access to key performance indicators for pro-level ETF investing. It is undoubtedly the dark horse of online brokers.
You’ll find all the standard ETF filtering and searching that you’re used to with other brokers. But this broker goes beyond these basics with tools for managing a portfolio, add-ons to expand functionality, and a unified tab to track everything in one place.
Most notably, AvaTrade places a stronger emphasis on growing your investment skills. For most investors, it’s an easy choice: it offers unmatched features and gets many things right – plus, it is right up there with the best overall online broker.
How does it work?
Simply put, AvaTrade is an advanced trading platform in every sense of the word. For starters, you will need to go through a regular account opening to the jump to pro-trading ETFs online. Remember the essentials: email, identification, and more.
But there is a twist, so follow carefully: the professional account comes with great power and greater responsibility. For that, you may need to meet a set criterion to show proof of your trading experience. That includes:
- Trading activity of significant sizes in the last 12 months
- A financial war chest of over €500,000, including cash and other instruments
- Experience in the financial services sector
Now you are ready to trade. Once you have got this tap, enjoy the benefits of becoming an AvaTrader. It is a powerful tool for the active ETF investor to make smarter trading decisions before, during, and after every investment.
Pros
- Full slate of ETF offerings
- Social trading
- Impressive learning resources
- Negative balance protection
Cons
- Unregulated
- Does not admit US traders
Commission & Fees
Don’t get left behind, there is no commission trading. This broker gets revenue from bid/ask spreads. Being a professional trader, you can enjoy professional trading leverage from 30:1 to 400:1.
So what now? Joining this exclusive, online ETF trading community will be one of the most satisfying things you can do; it is the epitome of trading excellence and the validation of your experience level. And it costs you nothing!
>>Read more About AvaTrade Review: Is it the Best for Advanced Non-US Traders?
#3. Best Intuitive Platform: Tradier Brokerage
Tradier Brokerage isn’t built for the power user, but it’s quite polished-looking or as easy to use as any other online brokerage. Provided you are willing to dig through the lists and menus, it offers a lot.
The trading platform itself is fast, fluid, and loads ETF offerings as fast as they come. Like all the best modern apps, there are customizable settings that let the separate investor actions for both long and short swipes. And it checks all the major ETF markets.
It also has the single best notification option for market-moving news. There is even support for choosing what kind of preview you get of the state of your portfolio. And that’s not even getting into the learning resources to grow your trading prowess.
How does it work?
The account opening process is a familiar story and it goes like this: get your email, government-issued identification, and fill in personal information (name, address, date of birth, etc.) to create an account. That’s it!
But there is a catch, Tradier only accepts traders from the US. However, there is a way to trade with the broker as a foreigner. You can make an application directly for consideration.
Once your application has been approved, you can finance your account through:
- ACH Transfer
- Check deposit
- Wire transfer
- ACAT transfer
Tradier requires traders to maintain a minimum account value of $10,000 for uncovered puts. Beyond that, there is a $50,000 minimum requirement for uncovered calls and $100,000 for uncovered index options.
Pros
- Best for developers
- Handling complex orders
- Largely customizable
- Backtesting investing algorithms
Cons
- Monthly fee
- Inactivity fee
Commission & Fees
For what it’s worth, Tradier is an excellent online broker with excellent standards. As such, investors should expect a per contract and subscription fees. The first month is on the house. These fees include:
- Mobile – $10 per month
- Pro – $10 per month and $0.35 per-contract fee
- Elite – $85 per month with no per contract fee
Then there are the miscellaneous activity fees, which can be summed up to:
- Automated Customer Account Transfer – $75
- Broker-assisted order fees – $10
- Depository Transfer Check – $25 per position
- IRA annual Fee – $30
- IRA Termination Fee – $60
- Margin Interest – 5.25%
- Returned ACH/Check/Wire/Stop payment – $35
- Wires – $30
You might be asking yourself: why so many different charges? Well, you can’t put a price or premium (or can you?).
>>Read more About Tradier Brokerage Review: Is it the Best Intuitive Trading Platform?
#4. Best for Beginners: TD Ameritrade
TD Ameritrade is not the online broker for ETF investing that will wow you with home runs, but it will give you a reliable launching pad. And that matters with something as delicate as investing in ETFs.
It nails in presenting all available options and the numbers to back your decision-making. The investing interface spells out everything in even better natural language. The numbers that matter is presented in a toned-down, clean look for easier reads.
Yes, those are simple features. But few other online brokers can claim to make ETF investing for beginners quite as easy to modify, ready, and execute. And ultimately, that’s what you are here for. TD Ameritrade does not miss the opportunity.
How does it work?
Without a doubt, TD Ameritrade is built for the ETF investing newbie. On account opening and funding, the script remains the same. You will need to follow the requirements such as email, identification, personal information, and more.
On the face of it, this platform looks and feels like any other ETF brokerage, but there is something different this time. TD Ameritrade offers the best resources for learning to invest in ETF. You can learn to trade and enhance your skills through the following:
- Articles and webcasts
- Extensive library of how-to videos
- An immersive curriculum
- A personalized learning path
The curriculum is designed to walk you through the basics before advancing to complex subjects such as balancing an investment portfolio. The resources are endless. Best of all, it’s a step-by-step training module conducted by professionals.
Pros
- Extensive educational program for beginners
- User-friendly web platform
- Commission-free ETF investing
- No minimum account requirement
Cons
- No fractional shares
- High account fees
Commission & Fees
The good news is TD Ameritrade does not charge a commission for online ETF investing. That’s not all. There is no inactivity fee or annual fee. However, that’s all the free services from this service. The investors will incur the following charges of the platform:
- Interactive Voice Response Phone System – $5
- Broker-assisted – $25
This broker earns revenue from the interest on cash and payment for order flow. That means the investor is getting access to over 300 commission-free ETF trades for practically nothing.
However, this service can make more money from less than obvious ways such as paper statement handling. When it is all said and done, you can’t compare the amount forgone with the level of experience and confidence-building exercises available.