Best Free Stock Trading Apps with 0% Commissions 2019
Last Updated: 12. September 2019
Stocks are shaking off their dowdy image after being upstaged by the hot cryptocurrency sector. Leading stock indices roared into the new year. In the first quarter of 2019, the S&P 500, Dow Jones Industrial Average and NASDAQ made their strongest start to the year in decades.
Zero-fee stock trading platforms have recently been increasing significantly. With more no fee online stock traders to choose from, investors are not leaving their money sitting idle. No fee investing apps are surpassing Fidelity, Vanguard and eTrade in weekly downloads.
If you took a gander at a no fee broker like Robinhood a year ago, it is worth another look. The freemium model makes money on valued added services. Free brokers are adding new services to rival those of premium brokers.
But is anything really free in life? Investors need to be on the look out for wide bid-ask spreads, and other hidden fees. In general though, the free online stock trading industry is definitely growing, so keep on reading if you are interest in finding out what the most convenient commission free trading sites for 2019 are.
An online stock broker acts as the middleman between buyers and sellers of stocks, bonds, ETFs and other investment securities.
Best 0% Commission Free Stock Trading Sites 2019
1. Robinhood – Best for US Stock Traders
Is Robin Hood Free to trade?
Fees: 0.00% pa
Min Deposit: Robinhood $0, Robinhood Gold $2,000
Roinhod is certainly one of the best if you are looking for free stock trading platforms and commission free stock trading. Robinhood led the charge in no fee online trading. You will be able to trade stocks with no commission charges and the same goes for trading ETFs, options, and cryptocurrencies. Broker-assisted trades by phone are currently free. One of the most popular apps for buy-and-hold investors has added trading features. Basic candlestick charts and indicators (moving average and relative strength) are now offered on this app appreciated for its simplicity.
The no frills US broker has added premium features. A Robinhood Gold Account provides margin accounts, Nasdaq Level II market data, and Morningstar research for a thrifty $5 a month. Leverage on margin accounts is up to 2:1. Interest on margin loans ranges from 7.2 percent on a $1,000 ($6/month) loan to 4.8 percent on $50,000 ($200/month) and a competitive 5 percent over $50,000. Fees are charged for international stock trades and wire transfers ($25–$50]. Robinhood is preparing to rob customers from the banks by providing a cash management account with a generous 3 percent interest rate. The average checking account, in comparison, earns 0.09 percent.
A quick online sign up process with instant deposits of $1,000 on Standard accounts and $50,000 on Gold accounts
No commission, deposit/withdrawal or inactivity fees
Tax-advantaged and IRA accounts
No real-time pricing on Standard accounts
Limited price charting, indicator tools and order types
International stock trades cost $35-50 per transaction
2. M1 Finance Best Automated Portfolio Robo Advisor
M1 Finance makes investing easy by automating trading based on your chosen portfolio allocation when your balance is above $10 (adjustable).
This robo-advisor works hard to ensure your money is always working for you. Designed to create cost savings for the long-term investor, M1 Invest offers no fee automated investing in custom portfolios with a choice of over 6,000 stocks and ETFs.
M1 Borrow is a low-cost line of credit for margin and other loans. M1 Spend is an FDIC-insured checking account that sweeps idle cash into your higher earning investment portfolio.
Portfolios, represented as pies, can be created with stocks, ETFs and Expert Pies (portfolios designed by professional investors for different investment styles and sectors). Automatic portfolio rebalancing ensures your optimal portfolio allocations are maintained.
A checking account with a debit card is a new option that can pay bills and sweep the excess cash into investments.
M1 Finance charges no fees to investors. Fractional shares allow you to start trading with as little as $10. One way this broker makes money is through M1 Borrow. M1 Borrow is one of the best platforms for low cost stock trading. It is a low-cost line of credit for not only margin borrowing but also other uses such as a second mortgage or business loan. The borrowing fee is 4 percent.
No fees or commissions
Free automated portfolio rebalancing
Sweeping of cash into higher earning investment accounts
If you are looking to trade stocks for free, Trading 212 might be a good idea. In Europe, Trading 212 started the zero commissions and zero fees revolution. The Bulgarian broker offers CFDs on currency pairs, stocks, commodities and cryptocurrencies, as well as direct share and ETF trading. The hugely popular app with speculators has attracted mainstream investors with low fee robo services. Leverage on Pro accounts is a generous 1:300 and 1:30 on retail accounts. ISA wrappers are offered on over 1,800 eligible instruments.
Trading 212 does not charge commission, trading or deposit/withdrawal fees. Robo trading services cost 0.005 percent per trade. An inactivity fee is charged on CFD accounts after six months of non-activity. Broker-assisted and premium research fees apply.
Negative balance protection
Real money and practice accounts with a good range of technical tools
Licensed by FCA and other jurisdictions with FSCS protected funds up to £85,000
DEGIRO – Low Fees Popular European Stock Trading Site
Fees: 0% pa
Min Deposit: $0.01
DEGIRO is not a no fee broker but its low fees are worth a mention. The broker charges a low $2 per trade for market access to CFDs and direct stock trading large institutions typically are privy to. Retail investors in 18 European counties can access direct securities trading on 50 international exchanges. When you trade on your domestic stock market the price is discounted further. Plus you get one free ETF trade a month. The broker is regulated by the Dutch AFM and DNB, and in many other jurisdictions around the world. It certainly is a site to consider if you are looking for free investing in stocks. DEGIRO offers five account levels – Custody, Basic, Active, Trader, Day Trader.
Compared to competitors, trades priced on a flat fee plus a percentage of volume are low fee, especially on US trades. US trades at €0.50 + USD 0.004 per share and UK trades at £1.75 + 0.022% add up as follows:
€2,000 of Apple shares at $190/share costs €0.54 (US exchange)
€2,000 of Nestle costs €5.16 (UK exchange)
Australia, Hong Kong, Japan and Singapore trades are more expensive at €10 + 0.68 percent, but still below many domestic trading fees. ETFs are €2 + 0.038 percent and bonds start at €2 + 0.068 percent. Options and futures trades start at 0.65 per contract. Real-time price feeds are available ranging from free for the Frankfurt Stock Exchange to €10.50 per month for the Germany Eurex. Margin accounts, called Debit Money, are offered Active, Trader and Day Trader accounts.
Low trading fees
Access to direct share trading on global exchanges
If you are looking at where to trade stocks for free, you certainly should be cautious. ‘No fee’ online stock trading accounts can be deceptively expensive if the following account features are not priced competitively:
The spread is the difference between the bid and ask price of a stock or other security expressed in pips. The bid is the highest price buyers will pay for the stock. The ask is the lowest price sellers will accept. Brokers with tight spreads have less price slippage, and therefore traders have a higher potential to profit placing a trade with a broker with a, say, 2 pip spread on the EUR/USD pair than a 4 pip spread.
Margin lending rates
Margin lending enables you to borrow money to invest. The money and securities in your brokerage account serve as collateral for a loan. A margin loan of 1:50 – the leverage – lets you borrow up to 50 percent of your account assets. The interest rate charged on the loan is part of your trading costs. Shop around. Compare the lending rates, loan-to-value (LTV) and leverage offered by brokers.
Slippage is the change in price from the time a trade is entered to the time it is executed. If you enter an order to buy Apple at 190, a thousand other trades processed on faster systems (up to a millionth of a second) may be filled before your order. Let’s suppose these faster orders are mostly buy orders bidding up the price. By the time your order is executed, the price has increased to 191. However if more sell orders were processed, the price could decline in your favor.
Futures and options fees
Futures and options are low cost risk management tools. These derivatives instruments enable investors to hedge or speculate on future price movements for a fraction of the fee of directly trading the underlying asset.
What to look for in an Online Stockbroker
Are they licensed?
Unlicensed brokers pose a higher risk of failure, in which case you will not be able to recover your money. Choose a licensed broker with anti-money laundering (AML) and know your customer (KYC) verification processes.
Is your brokerage account insured?
SIPC insurance ensures money in an account to be used for investment purposes. Funds in checking and savings accounts are FDIC-insured.
Are there hidden trading costs?
If a broker does not charge fees, always ask how it makes its money. Are there hidden charges? Some brokers are paid for order flow to market makers and dealers. Others are paid to offer the ETFs or other investment products of a supplier, whether or not they are the best choice for the customer portfolio. Margin loan rates, international stock trades and ETF referral fees are some of the revenue generators for no fee brokers.
Is the app highly rated?
Reviews of the mobile app are a reliable source of information on the pros and cons of a trading platform. Also check out independent brokerage reviews.
Is a diversified universe of instruments offered?
A broker with a limited number of securities to trade provides limited portfolio risk diversification opportunities.
Can you use a demo account?
A demo account is an opportunity to try out the trading interface and gauge the spreads, slippage, liquidity and order execution speed.
The key to improving your investment returns using the freemium model is to sniff out all the hidden costs, starting with the bid-ask spread. Currency translation fees and account transfer charges are other common hidden fees. Equally important, ask how the broker is earning money for you. Services like tax harvesting, dynamic rebalancing and cash sweeping can improve your returns. If you cannot easily and cheaply transfer excess cash in your account into higher returning investments, the broker will be earning the interest on your account balance, not you.
Compare the bid-ask spreads of different online stock brokers to ensure you are not overpaying for stock trades. Popular stocks with high volume will have tighter spreads than thinly traded stocks.
Free Stock Trading course
Before asking yourself what is the best free stock trading app and what platforms offer free stock trading in the USA or free stock trading in the UK, it is important to also focus on how to trade stocks other than where and how you can buy stocks for free. A lot of the platforms we’ve recommended offer education and informative resources on how to trade stocks. That is why we suggest looking into those before you dive into the stock trading industry. We’ve found most of these resources to be very useful for users of all backgrounds.
How much do I need to start trading?
Online broker minimum deposits vary. No fee broker models have significantly lowered the minimum. Some allow you to start trading with $5–10. Premium brokers may require that you have not only a high minimum account balance but also meet an asset test (e.g., minimum assets of $25,000].
What is payment for order flow?
Payment for order flow is the practice of brokers routing their orders to preferred market makers and dealers in securities in exchange for commissions. These third parties do not always provide the best pricing and trade execution speed for clients. Some brokers use these commissions to subsidize low or no fee brokerage services.
Why have I been charged a fee on a “no fee” stock trade?
In some countries a tax or duty, often called a stamp duty, is charged when shares are bought. In the UK, the stamp duty on electronic purchases of stock is 0.05 percent. In the US and many European markets, no stamp duty is charged.
What is the spread?
The spread is the difference between the bid and ask price expressed as a percentage. For a bid price of $70 and ask price of $100, the spread would be 30 percent.
What are Level II market prices?
Level 2 data shows the current bid and ask prices and related volume for a security trade. This information allows a trader to evaluate the current supply and demand for the security.
What is a loan to value ratio (LTV)?
The LTV ratio determines how much you can borrow on margin and when a margin call is made. It is calculated by dividing the amount borrowed to buy securities divided by the amount you have in your broker account (securities + cash).
What is a margin call?
If as a result of a losing position your balance falls below your account asset value and a pre-established loan to value ratio (LVR), you will receive a margin call. A margin call requires you to restore the original value by depositing more money and/or securities in your account. The lender could also sell your shares to repay the loan.
What is leverage?
Leverage refers to the amount of debt-to-capital a trader assumes by borrowing on margin. It is represented by a ratio of, for example, 1:30. If you deposit $1,000 in your brokerage account, you will be able to invest up to $3,000. If you invest $3,000 in Facebook stock and the stock gains 20 percent, your gain will be $600 versus $200 without leverage. Conversely, if the price declines 20 percent, your loss is $400 greater. Given the potential to multiply not only your gains but also your losses, the amount of leverage you choose to use should reflect the amount you can afford to lose.
All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Nica is a BA Political Science degree holder who fell in love with writing after college. She specializes in financial technology and cryptocurrency. At her young age, she was already able to work with founders who graduated from Harvard, tech startups funded by Y-Combinator, CEOs of multi-million dollar blockchain companies, investment companies in London and many more.