Cheapest Brokers for ETF Investing: Save More on Your Portfolio

Exchange-traded funds (ETFs) have become a cornerstone for investors seeking diversification, low costs, and flexibility. However, the broker you choose can significantly impact your returns due to fees, commissions, and platform features. Finding the cheapest brokers for ETF investing is crucial for maximizing your portfolio’s growth, especially for long-term investors. This article explores the most cost-effective brokers for ETF investing in 2025, comparing fees, features, and tools to help you make an informed decision.

Why Choose ETFs for Investing?

ETFs combine the diversification of mutual funds with the tradability of stocks, offering exposure to various asset classes, sectors, or indices at a low cost. Their expense ratios are often lower than mutual funds, and many brokers now offer commission-free ETF trades. However, trading fees, platform costs, and other charges can erode returns, making it essential to select one of the cheapest brokers for ETF investing.

Key Factors in Choosing the Cheapest Brokers for ETF Investing

When evaluating brokers, consider the following:

• Commission Fees: Many brokers offer zero-commission ETF trades, but some charge for specific funds or account types.

• Platform Fees: Annual or monthly account maintenance fees can add up, especially for small portfolios.

• ETF Selection: A wide range of ETFs ensures you can build a diversified portfolio.

• Non-Trading Fees: Watch for inactivity fees, withdrawal fees, or currency conversion costs.

• Tools and Research: Robust screening tools, educational resources, and portfolio analysis enhance your investing experience.

• Fractional Shares: Some brokers allow you to invest small amounts by purchasing fractional ETF shares.

Below, we dive into the cheapest brokers for ETF investing, highlighting their strengths and potential drawbacks.

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Top Cheapest Brokers for ETF Investing in 2025

Here’s a detailed look at some of the most cost-effective brokers for ETF investing, based on recent data and user feedback.

1. Fidelity Investments

Fidelity is a top pick for ETF investors due to its extensive selection and zero-commission trades. With over 2,500 ETFs available, including iShares and Vanguard funds, Fidelity caters to both novice and experienced investors. Its platform offers advanced research tools, including an ETF screener with 90+ criteria, and no account minimums.

• Fees: $0 commission for ETF trades; no account maintenance or inactivity fees.

• Pros: Large ETF selection, robust research tools, fractional shares available.

• Cons: Limited international ETF options compared to some competitors.

2. Charles Schwab

Charles Schwab is renowned for its low-cost approach and user-friendly platform. It offers commission-free trading on a vast array of ETFs, including its proprietary low-cost funds. Schwab’s ETF Select List helps investors identify top-performing funds, and its paper trading platform is ideal for beginners.

• Fees: $0 commission for ETF trades; no account minimums or inactivity fees.

• Pros: Extensive ETF research, commission-free proprietary ETFs, 24/7 customer support.

• Cons: Some advanced tools are exclusive to higher-tier accounts.

3. Robinhood

Robinhood revolutionized commission-free trading and remains one of the cheapest brokers for 5starsstocks.com value stocks for beginners. Its mobile-first platform is intuitive, and it supports fractional shares, allowing investors to start with as little as $1. However, its ETF selection is smaller, with about 500 funds.

• Fees: $0 commission for ETF trades; no account minimums. Robinhood Gold ($5/month) offers premium features.

• Pros: Fractional shares, no minimums, user-friendly app.

• Cons: Limited ETF selection, basic research tools.

4. Vanguard

Vanguard, a pioneer in low-cost investing, offers commission-free trading on its proprietary ETFs and many non-Vanguard funds. Its ETFs are known for some of the lowest expense ratios in the industry, making it a favorite for buy-and-hold investors.

• Fees: $0 commission for online ETF trades; $20 annual account fee for accounts under $1 million (waived for electronic statements).

• Pros: Ultra-low expense ratios, no commissions on Vanguard ETFs, strong educational resources.

• Cons: Platform less suited for active traders, $25 broker-assisted trade fee.

5. Interactive Brokers (IBKR)

Interactive Brokers is ideal for advanced investors seeking global ETF exposure. Its IBKR Lite plan offers $0 commissions on US-listed ETFs, and it provides access to over 15,000 ETFs across 90+ market centers. The platform’s advanced tools and low FX spreads make it cost-effective for international investing.

• Fees: $0 commission for IBKR Lite ETF trades; tiered pricing for IBKR Pro may incur costs.

• Pros: Massive ETF selection, global market access, competitive pricing for active traders.

• Cons: Complex platform, potential fees for infrequent traders.

6. InvestEngine

InvestEngine is a UK-based, ETF-only platform that stands out for its zero-commission trades and no platform fees. With a minimum deposit of £100, it’s accessible to small investors. Features like automated savings plans and one-click portfolio rebalancing add value.

• Fees: $0 commission for ETF trades; no platform or inactivity fees.

• Pros: Zero fees, automated investing tools, beginner-friendly.

• Cons: Limited to ETFs, UK-focused platform.

Comparison Table: Cheapest Brokers for ETF Investing

Hidden Costs to Watch Out For

While the cheapest brokers for ETF investing advertise zero commissions, hidden costs can impact your returns:

• Expense Ratios: The ETF’s internal management fee, which varies by fund (e.g., Vanguard’s VTI has a 0.03% expense ratio, while niche ETFs may charge 0.5% or more).

• Bid-Ask Spreads: The difference between an ETF’s buy and sell price can add up, especially for less liquid funds.

• Currency Conversion Fees: For international ETFs, brokers like IBKR may charge FX fees unless the base currency is GBP or USD.

• Inactivity Fees: Some brokers charge for dormant accounts, though most listed above waive these.

• Premium Features: Platforms like Robinhood Gold or Schwab’s premium tools may require subscriptions.

Tips for Minimizing Costs with ETF Investing

To make the most of the cheapest brokers for ETF investing, follow these strategies:

1. Choose Low-Expense ETFs: Opt for broad-market ETFs with expense ratios below 0.1%, such as Vanguard’s VOO or Schwab’s SCHB.

2. Use Regular Investment Plans: Brokers like InvestEngine offer low-cost or free regular investing schemes, reducing trading costs for monthly contributions.

3. Leverage Fractional Shares: Platforms like Robinhood and Fidelity allow you to invest small amounts, ideal for dollar-cost averaging.

4. Avoid Frequent Trading: ETFs are best for long-term holding to minimize spreads and taxes.

5. Compare FX Spreads: For international ETFs, brokers like IBKR offer better exchange rates, saving on currency conversion.

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Sample ETF Portfolio with Low-Cost Brokers

Here’s a sample diversified ETF portfolio using the cheapest brokers for ETF investing:

This portfolio offers broad diversification at an average expense ratio of ~0.07%, keeping costs minimal when paired with a zero-commission broker.

How to Get Started with the Cheapest Brokers for ETF Investing

1. Open a Brokerage Account: Choose a broker from the table above based on your needs. Most allow online account setup in minutes.

2. Fund Your Account: Deposit funds via bank transfer or supported methods. Brokers like Robinhood offer instant funding.

3. Research ETFs: Use the broker’s screener to filter ETFs by expense ratio, sector, or performance.

4. Place Your Trade: Enter the ETF ticker, select your investment amount, and execute the trade.

5. Monitor and Rebalance: Check your portfolio periodically to ensure it aligns with your goals, using tools like InvestEngine’s rebalancing feature.

Conclusion

Selecting one of the cheapest brokers for ETF investing can significantly enhance your long-term returns by minimizing fees and maximizing flexibility. Fidelity and Charles Schwab excel for their robust tools and large ETF selections, while Robinhood and InvestEngine cater to beginners with zero fees and fractional shares. For global investors, Interactive Brokers offers unmatched ETF variety. By pairing these brokers with low-expense ETFs and smart investing strategies, you can build a cost-effective, diversified portfolio tailored to your goals. Start exploring these platforms today to take control of your financial future.