11 Best Brokers for ETFs of July 2024
ETFs can help you create a well-diversified portfolio. The brokers below all offer a large selection of ETFs with no trade commission.
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ETFs trade like individual stocks, so many of the features sought by investors in a stock-trading account are also relevant to ETF investors. Like stocks, many brokers now offer ETFs commission-free. Besides commissions, it’s also important to consider other criteria, including a broker’s fund selection and tools for creating a well-diversified portfolio.
Based on these factors, our assessment showed the best broker for ETFs is Fidelity. Fidelity gives investors access to more than 2,500 ETFs, including thematic ETFs such as Metaverse and Digital Health ETFs.
Looking for Bitcoin ETFs? Most of the brokers below offer them — the exception is Vanguard, which has declined to offer them on its platform.
Here are all of NerdWallet’s picks for the best online brokers for every kind of ETF investor, whether you’re looking for a broker with free commissions, the broadest range of ETFs or the best platform to help you build and manage a portfolio.
ETFs trade like individual stocks, so many of the features sought by investors in a stock-trading account are also relevant to ETF investors. Like stocks, many brokers now offer ETFs commission-free. Besides commissions, it’s also important to consider other criteria, including a broker’s fund selection and tools for creating a well-diversified portfolio.
Based on these factors, our assessment showed the best broker for ETFs is Fidelity. Fidelity gives investors access to more than 2,500 ETFs, including thematic ETFs such as Metaverse and Digital Health ETFs.
Looking for Bitcoin ETFs? Most of the brokers below offer them — the exception is Vanguard, which has declined to offer them on its platform.
Here are all of NerdWallet’s picks for the best online brokers for every kind of ETF investor, whether you’re looking for a broker with free commissions, the broadest range of ETFs or the best platform to help you build and manage a portfolio.
Best Brokers for ETFs
| Broker | NerdWallet rating | Fees | Account minimum | Promotion | Learn more |
|---|---|---|---|---|---|
 Charles Schwab Learn more on Charles Schwab's website | $0 per online equity trade | $0 | None no promotion available at this time | Learn more on Charles Schwab's website | |
 Interactive Brokers IBKR Lite Learn more on Interactive Brokers' website | $0 per trade | $0 | None no promotion available at this time | Learn more on Interactive Brokers' website | |
 J.P. Morgan Self-Directed Investing Learn more on J.P. Morgan's website | $0 per trade | $0 | Get up to $700 when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money. | Learn more on J.P. Morgan's website | |
 Vanguard Learn more on Vanguard's website | $0 per trade | $0 | None no promotion available at this time | Learn more on Vanguard's website | |
 E*TRADE Learn more on E*TRADE's website | $0 per trade. Other fees apply. | $0 | Get up to $1,000 when you open and fund an E*TRADE account | Learn more on E*TRADE's website |
$0
per online equity trade
$0
None
no promotion available at this time
Pros
Commission-free stock, options and ETF trades.
Four trading platforms with no minimums or fees.
Above-average mobile app.
Extensive research offerings.
Large fund selection.
Cons
Low interest rate on uninvested cash.
Why We Like It
With its proprietary lineup of index funds and ETFs, Charles Schwab brings affordable ETF investing to the masses. It offers more than 2,400 funds with expense ratios of 0.50% or below.
Best Online Broker for Advanced Traders 2024
$0
per trade
$0
None
no promotion available at this time
Pros
Commission-free stock, options and ETF trades.
Large investment selection.
Strong research and tools.
Over 19,000 no-transaction-fee mutual funds.
High order execution quality.
Cons
High minimum to earn interest on uninvested cash.
Website can be difficult to navigate.
Why We Like It
Don't let the name fool you: IBKR Lite offers commission-free stock trading (including international trade capabilities), more than 19,000 mutual funds, and a well-featured platform.
$0
per trade
$0
Get up to $700
when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money.
Pros
Commission-free stock, options and ETF trades.
Easy-to-use platform.
App connects all Chase accounts.
In-person customer support at Chase branches.
Cons
Limited tools and research.
Portfolio Builder tool requires $2,500 balance.
Low interest rate on uninvested cash.
Why We Like It
J.P. Morgan Self-Directed Investing is a clear-cut investment platform that is great for beginners looking to learn how to buy and sell investments. More advanced investors, however, may find it lacking in terms of available assets, tools and research. J.P. Morgan offers 3,000 no-transaction-fee mutual funds, fractional shares in ETFs and fee-free bond ETFs.
$0
per trade
$0
None
no promotion available at this time
Pros
Commission-free stock, options and ETF trades.
Leader in low-cost mutual, index and exchange-traded funds.
High interest rate on uninvested cash.
High order execution quality.
Cons
Basic trading platform only.
Limited research and data.
No fractional shares.
Why We Like It
Vanguard is the king of low-cost investing, making it ideal for buy-and-hold and retirement investors. It offers a top-notch selection of proprietary, low-cost mutual funds, including many ESG options. Despite its $0 trade commission, active traders will find the broker falls short due to the lack of a strong trading platform.
$0
$0
Earn up to $10,000
when you transfer your investment portfolio to Public.
Pros
Commission-free stock, options and ETF trades.
Rebates for trading options.
Impressive selection of alternative assets.
Easy-to-use signup and trading interface.
High interest rate on uninvested cash.
Cons
No mutual funds.
No margin trading.
Lack of tools (e.g. customizable investment screeners).
No IRA accounts.
Why We Like It
Public provides free stock and ETF trades, pays you to trade options, and gives traders access to crypto, alternative assets and bonds, as well as a high-yield savings account. The platform will appeal to traders looking for a low-cost options broker and access to many types of assets.
Best Broker for Beginning Investors 2024
$0
per trade for online U.S. stocks and ETFs
$0
None
no promotion available at this time
Pros
Commission-free stock, options and ETF trades.
Large selection of research providers.
Strong customer service.
Expense-ratio-free index funds.
Highly rated mobile app.
High interest rate on uninvested cash.
Cons
Relatively high broker-assisted trade fee.
Why We Like It
Fidelity is one of the largest and most well-established brokerages, and it shows. Fidelity charges no trading commissions, offers an extensive set of no-fee, no-minimum index funds. It also stands out for its top-notch research tools, a renowned trading platform and very strong customer service.
Want to compare more options? Here are our other top picks:
Last updated on July 22, 2024
Methodology
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating providers and our processes, read our full broker ratings methodology.
To recap our selections...
NerdWallet's Best Brokers for ETFs of July 2024
Frequently asked questions
ETFs allow investors to invest in a diversified selection of stocks, bonds or other investments in a single transaction. Like mutual funds, ETFs pool investor money to purchase shares of a number of different investments.
Those investments generally mimic a benchmark, like the S&P 500. ETF investors don’t own the underlying assets in the fund — the ETF provider maintains ownership. Instead, ETF shareholders own a portion of the ETF itself.
ETFs are traded on an exchange, much like an individual stock, which means they can be bought and sold throughout the day. You can read more about ETFs in this explainer: What is an ETF?
All investments carry risk, and ETFs are no exception. But, since ETFs have built-in diversification, similar to mutual funds, risk is generally lower than it is in trading any one company stock or bond. Still, most ETFs mirror an underlying asset or index, which can rise and fall in value depending on market conditions.
Other risks include the liquidity of the fund (that is, how easily you can buy or sell the ETF) and the potential for the fund to close down.
Like any investment, that varies. As with mutual funds, ETF costs come from a couple of different directions.
Because ETFs trade on an exchange, they can be subject to broker stock commissions. However, many brokers allow you to buy or sell ETFs with no commission.
As with any fund, ETFs charge an expense ratio to pass the cost of administering the fund on to investors. The expense ratio is an annual fee, expressed as a percentage of your investment: a 1% expense ratio costs $10 a year for every $1,000 you invest in the fund. In general, because ETFs passively track a benchmark, their expenses tend to be lower than what you’d pay for an actively managed mutual fund. Take a look at average fund expense ratios so you know where your ETF stands.
To trade ETFs, you’ll need an account with an online broker. If you don’t have one, you can open one with one of the companies listed above in about 15 minutes — the whole process can typically be done online. Here's the step-by-step of how to open a brokerage account.
Once the account is funded, you can purchase ETFs using their ticker symbol, very similar to the way you buy stocks. You’ll place an order on your broker’s website or online trading platform with the ETF’s ticker, the order type and the number of shares you’d like to purchase. Read our step-by-step guide to buying an ETF.
ETFs combine the flexibility of stock trading with the instant diversification of mutual funds. As most ETFs are passively managed — tracking a benchmark index rather than trying to beat market returns — management fees are on average about one-third lower than that of actively traded mutual funds. Costs are transparent, and the value of the fund’s holdings are reported at the end of each day (as opposed to monthly or quarterly for mutual funds).
ETFs often are more tax-efficient than mutual funds because they typically draw lower capital gains taxes. Investors might pay only upon the sale of the ETF, whereas mutual fund investors can incur capital gains taxes throughout the life of the investment.
The main difference is in how these funds invest, and how they’re bought and sold. As we noted above, ETFs can be traded throughout the day, leading to the kind of price fluctuations you might see with individual stocks. Mutual funds are typically purchased from fund companies rather than other investors and are priced once a day after the market has closed.
Though ETFs can be actively managed, most are passive, tracking an index. Many mutual funds are actively managed and employ a professional to pick and choose investments, which can result in higher fees.
Here’s our full comparison of ETFs and mutual funds.
Like stocks, ETFs are traded on exchanges like the New York Stock Exchange (hence the name, exchange-traded funds). But unlike a stock, which buys assets in one publicly traded company, an ETF tracks an index, a basket of securities, bonds or other assets.
Because they are traded for a share price, you don’t run into the typical mutual fund minimums, which can be $1,000 or more. You can purchase an ETF share for as little as $10 or $20 in some cases. Robo-advisors that use ETFs in their portfolios may even allow you to buy fractional shares — portions of a fund smaller than a single share.
That said, some brokers have account minimums, though there are quite a few options above that do not.
Yes — if the portfolio owned by the ETF includes equities such dividend-paying stocks. These can be paid monthly or on some other time frame, depending on the ETF. If you're interested in this type of income, view our list of the best dividend ETFs.
Yes, you can use dividends to acquire more shares in the same ETF, but there may be commissions for reinvesting dividends. Check with your brokerage to learn more.