2. Charles Schwab is the best option for intermediate investors.
Charles Schwab, founded in 1971, is one of the largest brokerage businesses in the United States, with over $6.6 trillion in client assets. For equities and ETF investments, the platform charges no costs, while options trading costs $0.65 per contract. Schwab also facilitates cryptocurrency exchanges.
In 2019, Charles Schwab announced plans to acquire TD Ameritrade Holding Corporation for around $26 billion. Schwab added $115 billion in core net new assets in the third quarter of 2022, representing a 7% annualized rise year over year, owing to its expanding popularity among the general public.
The platforms are currently integrating their activities after gaining the green light from the Department of Justice’s Antitrust Division in 2020. According to Charles Schwab, the merger should be completed by 2024.
Schwab hopes to become “the most trusted leader in investment services” as a result of this acquisition. In addition to cheap brokerage services, Charles Schwab offers automated advising services and other premium services.
Robo-advisory services, including automated portfolio development, monitoring, and rebalancing, are available through its Intelligent Portfolios platform. With a $5,000 minimum commitment, investors can take advantage of the benefits of Schwab’s Robo-advisor.
Schwab uses qualified financial advisers to provide limitless investing advice to Premium service subscribers. Investors can use Charles Schwab’s configurable option screeners to identify the best options contracts to invest in based on their preferences. It is one of the top brokers for derivatives traders, with a competitive $0.65/contract commission.
3. Robinhood – Highest Commission- Investing in Cryptocurrency and Free Equity
Because of the heightened interest in stock market investment during the early days of the pandemic, Robinhood rose to prominence. Its commission-free trading approach has upended the brokerage business in the United States.
The platform’s goal is to “democratize finance for everybody” by making it available to users throughout the country. Founded in 2014, the start-up has experienced rapid growth over the last eight years, owing to its no-fee strategy and limited trading constraints. It also makes fractional share and cryptocurrency trading possible.
Robinhood had 13.3 million monthly active users and $71 billion in total assets under custody as of August 31, 2022. Furthermore, as of August, the platform’s net cumulative funded accounts, which show user growth, climbed 2% year on year.
The trading platform’s parent business, Robinhood Financial LLC, also offers cash management services, allowing investors to earn interest on monies maintained in the Robinhood app but not invested. The platform provides 1.25% APY variable interest on funds, which is comparable to several popular online savings accounts.
Robinhood’s cash management services set it apart from many other online trading and investment platforms in the United States, with no monthly service costs and FIDC insurance of up to $1.25 million.
Despite the GameStop scandal in early 2021, the Robinhood platform remains popular among retail investors. When GME and other popular meme stocks were soaring in price, the cheap broker restricted trade, citing market volatility as the primary reason.
This resulted in a flood of the unfavorable press. It also caught the attention of the SEC, and was ordered to pay a $70 million fine. Given its youthful tech-savvy, and risk-taking clientele, Robinhood is one of the first to adopt new market trends. It is actively developing a decentralized finance (Defi) wallet for storing a variety of digital assets, such as cryptocurrencies and NFTs.