5 Best Online Brokers for ETF Investing in 2022

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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.

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.

#5. Best for Web Platforms: E*Trade

E*Trade mobile app is a pretty hit or miss (glass half-full, half-empty), but its web platform knocks it way out of the park. It has it all, but the things to love most about the platform are its smooth performance and compact design that feels like it has a lot of breathing room.

If you want to go a step up on ETF investing, without getting too complicated, this is your answer. Many of the trading platform elements are familiar, so it’s really up to your personal preference to decide on a desktop-based application.

Sure, this might sound like an advanced broker, but E*Trade is simple enough for a novice trader to build your investing environment with tables, templates that suit their investment strategy. It’s a very flexible interface.

How does it work?

Unsurprisingly, there is still room for one more run-up of the account creation process. However, the subject has been covered extensively – it’s as simple as creating an online dating profile.

E*Trade offers three web-based/downloadable platforms for investing in ETFs online. It also comes with two mobile apps, but let’s put more emphasis on web browsing, for they are the superior of all platforms. The web-based applications offer the following features:

• Charting tools
• Advanced intra-day and historical data and charts
• Risk analysis tools
• Independent analyst research, news, and quotes
• Investing screeners to identify emerging opportunities
• Learning resources

The web-based platform, Power E*Trade offers the best capabilities for a trader to succeed in a fast-paced world. The platform has been recognized and celebrated all over the world. It delivers the best features and functions that have won it the title of the best web-based trading platform.

Pros

• Power E*Trade application
• Automated portfolio builder
• Third-party and in-house analysis
• Commission-free ETF investing

Cons

• No access to international markets
• Website is difficult to navigate

Commission & Fees

Like many online brokers, E*Trade offers $0 commission for online ETF investing. On top of that, there are no fees for closing an account, inactivity, or maintenance. You don’t even need to maintain a minimum balance on your account.

In fact, the only fees you may end up paying are associated with third-party services such as withdrawals and transfers. Still, the cost of maintaining a trading account here is significantly cheaper. Here are some of the typical fees:

• Domestic wire fee of $25
• Checking fee of $10
• Partial and full transfer fee of $25 and $75 respectively

This brokerage is relatively no-frills, and many investors find value in the usability of its web-based application and other features. The fees listed here are some of the straightforward revenue avenues, but there might be other hidden sources.

>>Read more About E*Trade Review: Is it the Best Web Platform?

How we rank the Best Online Brokers for ETF Investing?

Whether you are new to ETFs or an old pro, you can whip your finances into shape and save on commission with a few taps. The best way to find the best online broker for ETF investing is to pit all services against each other in a contest of the following factors:

• Affordability
• Reliability
• Accessibility
• Reputation
• Level of experience needed
• Tools, education, and features
• Type of accounts

However, for this online broker review, the largest and highly-rated services were singled out and pitted against other finalists in each category. The brokerage services discussed here have well-documented features, pros, and cons, which played a role in ranking.

The world of online investing is vast and debates about the best tools and services have spawned countless articles and infographics. As such, the input of experienced traders was also considered in this ranking.

How to choose the Best Online Brokers for ETF Investing?

The choice of broker is the first crucial decision you will make as an ETF investor. Regardless of how a broker presents themselves in promos and other marketing materials, it’s always advisable to dig a little deeper.

If you are reading this, then congratulations – you have just completed your first step in finding the best broker for your investing journey. And the most interesting part is that this review has summed up the best brokers depending on your preference.

However, if for some reason you can’t seem to find the right one, then consider the fees, reliability, and trade execution of each service. Narrow your list further by checking the account requirements, tools, educational material, and features.

Conclusion: Best Online Brokers for ETF Investing

There is no such thing as the best online broker for ETF investing, technically speaking. All the best in the world are, well, online brokers, and that means they deliver an endless stream of ETF classes, newsletters, and data that take up your time and money.

Of course, you still need a broker – and if you are going to deal with ETFs online, it has to be the best. Interactive Brokers remains the best overall online broker. This service offers the best user experience and ranks above average in every metric used.

You don’t need to know the lingo, care about the brand, or even have a knowledge of the inner workings of a brokerage to rank Interactive Brokers as the best. Then again, if you want to challenge your skills, then AvaTrade is a solid option for non-US traders.

But the silver lining US traders can take on Tradier brokerage for similar opportunities and features to AvaTrade. The trick is to know where to start from, and that’s TD Ameritrade, where you can grow your skills for advanced platforms like E*Trade.

Best Online Brokers for ETF Investing FAQs

What are ETF trades?

Exchange Traded Funds are in a low investment threshold, which makes them perfect for various trading and investment strategies. The market for ETF enjoys high liquidity, which makes it easy to get in and out of an ETF trade.

You can trade and invest in an ETF and enjoy the earnings on the ETF, which depends on the type of investments it holds. For instance, returns can be a combination of capital gain and dividends paid out on stocks.

What are Mutual Funds?

A mutual fund is an investment company that consolidates money from multiple investors into a pool to invest in securities. These funds are professionally managed by fund managers, and the collective investors share the gains and losses earned.

The key value proposition of a mutual fund is diversification, risk customization, and professional fund management. The pool of money is allocated into assets that make up a diversified portfolio that generates profit.

What are exchange-traded funds?

An Exchange Traded Fund is a type of security that combines the diversification of mutual funds to affordable buy-ins and real-time pricing data. ETFs are not your typical speculative fads. They are structured to track an index, sector, asset, or commodity.

An example of a popular ETF is the SPDR S&P 500 ETF, which has been structured to track the S&P 500 stock market index. That means an ETF doesn’t necessarily have to contain a single investment class.