Best Brokers For Long-Term Investing
Finding the best brokers for long term investing can prove challenging. Buying and holding assets for an extended time can be a successful and profitable trading avenue and this guide aims to help you find the best brokers for long term investing, whether you are in the UK, Europe, India, Singapore, Philippines or Australia. This article will run through what long term investing is and how it works. We also cover the different types of long term investing, the best assets to trade and how to compare top brokers.
Best Brokers For Long Term Investing
These 5 brokers provide the best suite of instruments and trading conditions for long-term investors:
#1 - AvaTrade
Why We Chose AvaTrade
AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available for day trading, alongside a comprehensive education center and multilingual customer support.
"AvaTrade offers the full package for short-term traders. There is powerful charting software, reliable execution, transparent fees, and fast account opening with a low minimum deposit."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Crypto, Spread Betting
- Regulator: ASIC, CySEC, FSCA, ISA, CBol, FSA, FSRA, BVI, ADGM
- Platforms: WebTrader, AvaTradeGO, AvaOptions, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade
- Minimum Trade: 0.01 Lots
- Leverage: 1:30 (Retail) 1:400 (Pro)
Pros
- AvaTrade is a heavily regulated and trustworthy broker with licenses from the ASIC, CySEC and more
- Day traders can access stable spreads and zero commissions with no hidden fees
- WebTrader is well-suited to beginners and features a strong suite of technical analysis tools and market research for day traders
Cons
- Traders from the US are not accepted
- There is no ECN account with raw spreads
- It’s a shame that there are no rebate schemes for serious traders looking for additional perks - CMC Markets would be a better choice here
#2 - OANDA US
Why We Chose OANDA US
OANDA is a popular brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features. The top-rated brand has over 25 years of experience and is regulated by trusted agencies, including the NFA/CFTC. Around the clock support is available for short-term traders, alongside flexible contract sizes and automated trade executions.
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
- DayTrading Review Team
- Instruments: Forex, Crypto
- Regulator: NFA, CFTC
- Platforms: OANDA Trade, MT4, TradingView, AutoChartist
- Minimum Deposit: $0
- Minimum Trade: 0.01 Lots
- Leverage: 1:50
Pros
- There's a strong selection of 68 currency pairs for dedicated short-term forex traders
- The proprietary OANDA web platform continues to deliver a highly competitive charting environment, including 65+ technical indicators powered by TradingView
- Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave
Cons
- It's a shame that customer support is not available on weekends
- There's only a small range of payment methods available, with no e-wallets supported
- The range of day trading markets is limited to forex and cryptos only
#3 - Deriv.com
Why We Chose Deriv.com
Deriv.com is a low cost, multi-asset broker with over 2.5 million global clients. With just a $5 minimum deposit, the firm offers CFDs, multipliers and more recently accumulators, alongside proprietary synthetic products which can't be found elsewhere. Deriv provides both its own in-house charting software and the hugely popular MetaTrader 5.
"Deriv.com will suit day traders looking to make fast-paced trades using CFDs and multipliers with high leverage up to 1:1000. The broker is also the industry leader in synthetic indices, which simulate real market movements and are available around the clock. "
- DayTrading Review Team
- Instruments: CFDs, Multipliers, Forex, Stocks, Indices, Commodities
- Regulator: MFSA, LFSA, VFSC, BFSC
- Platforms: Deriv Trader, MT5
- Minimum Deposit: $5
- Minimum Trade: 0.01 Lots
- Leverage: 1:1000
Pros
- Beginners and experienced day traders can access a good range of 20+ technical indicators in Deriv Trader vs 30+ in MT5
- Deriv bolstered its short-term trading opportunities in 2024 with accumulator options on simulated indices featuring up to 5% growth rates
- The free demo account is ideal for practicing short-term trading strategies and no registration is required
Cons
- There are limited copy trading tools and analysis features compared to alternatives like IQ Cent
- The range of 100+ assets trails some competitors such as Quotex which offers 400+
- There's no loyalty program or rebate scheme for high volume traders
#4 - Pepperstone
Why We Chose Pepperstone
Established in Australia in 2010, Pepperstone is a top-rated forex and CFD broker with over 400,000 clients worldwide. It offers access to 1,300+ instruments on leading platforms MT4, MT5, cTrader and TradingView, maintaining low, transparent fees. Pepperstone is also regulated by trusted authorities like the FCA, ASIC, and CySEC, ensuring a secure environment for day traders at all levels.
"Pepperstone stands out as a top choice for day trading, offering razor-sharp spreads, ultra-fast execution, and advanced charting platforms for experienced traders. New traders are also welcomed with no minimum deposit, extensive educational resources, and exceptional 24/7 support."
- DayTrading Review Team
- Instruments: CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto, Spread Betting
- Regulator: FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
- Platforms: MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
- Minimum Deposit: $0
- Minimum Trade: 0.01 Lots
- Leverage: 1:30 (Retail), 1:500 (Pro)
Pros
- Pepperstone boasts impressive execution speeds, averaging around 30ms, facilitating fast order processing and execution that’s ideal for day trading.
- Award-winning customer support is available via telephone, email or live chat with response times of <5 minutes during testing.
- There’s support for a range of industry-leading charting platforms including MT4, MT5, TradingView, and cTrader, catering to various short-term trading styles, including algo trading.
Cons
- Pepperstone’s demo accounts are active for only 30 days, which may not be not long enough to familiarize yourself with the different platforms and test trading strategies.
- There’s no simplified proprietary trading platform, nor are there any social trading features, which could be a disadvantage if you are new to day trading.
- Pepperstone does not support cTrader Copy, a popular copy trading feature built into the excellent cTrader platform and available at alternatives like IC Markets.
#5 - XM
Why We Chose XM
XM is a globally recognized forex and CFD broker with 10+ million clients in 190+ countries. Since 2009, this trusted broker has been known for its low fees on 1000+ instruments. XM is regulated by multiple financial bodies, including the ASIC and CySEC.
"XM is one of the best forex and CFD brokers we have tested. The flexible account types will suit a variety of short-term trading styles while the $5 minimum deposit and smooth sign-up process make it easy to start trading."
- DayTrading Review Team
- Instruments: Forex, Stock CFDs, Turbo Stocks, Indices, Commodities, Precious Metals, Energies, Shares, Crypto, Futures
- Regulator: ASIC, CySEC, DFSA, FSC, FSCA
- Platforms: MT4, MT5
- Minimum Deposit: $5
- Minimum Trade: 0.01 Lots
Pros
- 1000+ instruments are available, including recently added thematic indices, providing exposure to emerging industries
- The broker offers premium research including market sentiment, fundamental insights and strategy builders
- Transparent and low fees with spreads from 0.0 pips that will help protect day trading profit margins
Cons
- There is weak regulatory oversight through the global entity
- PayPal deposits are not supported
- There's $5 inactivity fee after only 3 months, though this won't affect active traders
What Is Long Term Investing?
We need to understand what long term investing is and how it works before we break down the best brokers for long term investing. When people refer to long term investing, they usually mean buying stocks, bonds or forex and holding on to it for a significant amount of time, such as months or even years. Anyone with a pension is already investing in the long term. With a pension pot, daily fluctuations do not matter so much, the important factor is consistent growth over an extended period, with the goal being a healthy balance come retirement.
Long term investments work in a similar way to standard trading and day trading, just over a longer period. The same research and preparation are required but, instead of looking at daily price charts for different assets, you need to look over longer periods like a year or multi-year chart. Long term investing is all about growth. If an asset is showing steady growth over a year or longer, it will likely be a good investment. The daily fluctuations are insignificant, sometimes the assets may be down and sometimes they may soar, but all that matters for investors is the overall growth. Investors may look to hold long term investments in companies that have shown steady growth and have reason to keep in that same vein.
Types Of Long Term Investing
When it comes down to it, there are many different types and forms of trading offered by the best brokers for long term investing. Here, we will go through a few different options and explain them. There are two mindsets when it comes to long term investments. Firstly, you have held to maturity investments. This is when you purchase an asset or entity which you wish to keep until it has completely matured, with no intention of selling.
The opposite of this is available for sale investment. With an available for sale investment, the trader purchases the asset intending to sell in over a year. It is still a long-term investment, as the asset will be held for a significant time, but the goal is to sell the asset eventually.
Diving down the rabbit hole of stocks, there are a couple of different instruments offered by the best brokers for long term investing that you could go for. The first type is dividend stocks. As the name suggests, these are stocks that pay dividends, giving investors a regular cash pay-out. Typically, stocks offering dividends are from older companies that have less need for their cash. Generally, these are a safe stock to go for. They are unlikely to skyrocket and earn loads but they produce a regular income.
That brings us on to another type, growth stocks. These promise high growth and high investment returns. A lot of the time these stocks are tech companies. Generally, all profits go back into the business and product, so they are unlikely to pay out large dividends. This type of long-term investment is very risky, stock prices can plummet when things go wrong but the success stories speak for themselves. Facebook, Amazon and Apple are all great examples of how far these growth stocks can go.
Long-Term Investing Vs Day Trading
Long-term investing and day trading are two very different forms of trading and, while some firms will support both, the best brokers for long term investing likely offer more specialised services. While the obvious difference between the two approaches is the time an asset is held, there are other variations in the two styles. Day traders are working over very short periods. Typically, an investor will purchase an asset and look to sell it within hours, minutes or even seconds. When buying a stock, the intent is to sell it as soon as it hits a certain price. Equally, when shorting (selling), the intent is to buy it back when it’s dropped to a certain value. Day trading requires a significant amount of concentration and effort. Investors must constantly check the market and charts to ensure they sell at the right time, only to rinse and repeat the process many times throughout the day. High fees can be incurred through day trading as commissions are generally charged on each purchase and sale.
Long-term investing is almost the opposite of this. When an investor purchases an asset as a long-term investment, they are not looking to sell any time soon. Typically, they will hold the asset for months or even years. The intent is to hold the asset and allow it to gain value over time, rather than waiting for it to hit a certain price. Similarly, investors will sell the asset only once they can make a significant gain on it. Long-term investors do not have to spend as much time and effort monitoring the market. After the initial research and purchase, small fluctuations do not matter, they can check price charts at their leisure safe in the knowledge they will not be selling for a while. The fees are usually lower as there is only one sale after a long period. The main fee incurred by long-term investors is management fees.
Assets Suited To Long Term Investing
While CFDs may be cheap and offered by some of the best brokers for long term investing, they are not suited to such strategies. CFDs usually incur overnight interest charges. When you are selling on the same day or the next day, this does not matter, however, when you are looking to hold for months or years, these charges will build up and cost a lot more than the CFD is worth. Spot investments are a much better option. These are charged a commission when you sell but there is no interest or overnight holding fees. This suits long-term investments as it allows you to hold for as long as you want, without worrying about fees being incurred for the length of time.
In terms of specific assets to purchase, stock funds and ETFs are often considered a great way to go. If you purchase a broadly diversified fund, such as an S&P 500 or Nasdaq-100 index fund, you will get a range of company stocks, both high-growth and high-dividend. These assets generally experience consistent growth and often recover from drops, for example, even though the S&P 500 dipped during the 2008 financial crisis, it had recovered to its previous level within a few years and kept growing.
Bonds are another great asset offered by the best brokers for long term investing. When you buy a bond, you are essentially lending money to a company, corporation or government entity. This gives them the cash they need, while you earn interest on the repayments they make. Generally speaking, there is a low risk attached to these bonds. You are unlikely to get incredibly rich trading bonds but you will make a steady income over a long period.
Pros Of Long-Term Investing
These are the key benefits of finding the best brokers for long-term investing and capitalising on this trading style:
- Lower risk
- Less trading fees
- Can earn dividends
- Less time-consuming
- Ride out market bumps
Cons Of Long-Term Investing
Our research showed these to be the disadvantages of long-term investments:
- Patience is required
- Lots of fundamental research required
- Could be long periods before profits are realised
- Generally lower annual returns than successful day trading
How To Compare The Best Brokers For Long Term Investing
So, you are looking for the best brokerage accounts for long term investing. Comparing different brokers can be difficult, so we have compiled a list of things to check for when you are trying to find a broker:
- Minimum Deposit: Look for brokers with lower minimum deposits, it will mean you do not have to put up as much capital upfront and can trade at an amount you are comfortable with.
- Funding Methods: What payment methods does the broker accept? Find a broker that accepts forms of payments you can use and does not charge high fees for deposits and withdrawals.
- Assets Available To Trade: When you are picking a broker, ensure they offer the assets you want to trade. If you are looking for stocks, check the stock exchanges they offer. If you want to trade forex or bonds, make sure they offer these.
- Trading Platforms: Check that the broker offers trading platforms that suit you. If you want to conduct trading on the go, check for a mobile trading platform.
- Fees & Commission: This is one of the most important ones. Long-term brokers may charge fees, such as annual maintenance charges (AMCs). Compare the fees of different brokers and try to find a suitably low one. Also, check what commission will be charged when you close trades.
- Customer Support: Compare the different levels of customer support offered. Ideally, you want a broker that offers 24/7 customer support with a range of methods for you to get in contact.
Long Term Investing Strategies
Strategies are important at any level of trading, and long-term investing is no different. These tips will help you build your strategies and trade effectively.
Diversify
Holding a diverse range of assets is the key to trading successfully, whether you are with one of the best brokers for long term investing or not. Firstly, you want to ensure you are not only investing in high-risk assets like stocks but also purchasing bonds and other assets that are more steady. Secondly, holding a diverse portfolio leaves you less susceptible to market downturns. Yes, some of your assets may go through a hard time but diversification should ensure some of them will still perform well.
Separate Emotions
Do not think of an investment as you would a sports team. Be open-minded with investments, they will not all come off and you must be ready to ditch a loser. It is not worth staying with it just in case of an upturn, sell it and move on to the next investment.
Start Early
As a general rule of thumb, the sooner you start investing, the sooner you reap the rewards. Start investing in long term assets as soon as possible. The quicker you practise, make mistakes and learn from them, the sooner you will start consistently making money.
Final Word On Best Brokers For Long Term Investing
Signing up with the best brokers for long term investing can open the doors to a profitable avenue, free from the constant chart checking of day trading. Many assets are suitable for long-term investing, some of which carry more risk than others, but all have the potential to earn large profits. Follow our comparison guide to find the best broker for you for long term investing.
FAQs
Will I Pay Tax On Profits From Trading With The Best Brokers For Long Term Investing In The UK?
Profits are often subject to tax with long term investing strategies. Depending on the amount of income, you may be required to pay capital gains tax or even income tax.
Do The Best Brokers For Long Term Investing Charge Overnight Fees?
Many of the best brokers for long-term investing do not charge overnight fees for most financial instruments, instead charging commissions. However, CFDs often incur overnight interest swaps, so be sure to check before opening any trade.
Can I Trade CFDs On A Long-Term Basis?
Yes, you can. However, they are likely to incur overnight fees, which will increase over time and likely wipe out profits that you earn over time.
Are Stocks Or Bonds Better From The Best Brokers For Long Term Investing?
Investors may do well from investing in both. Stocks are higher risk but have the potential for greater growth, while bonds are steady and should provide a safer income.
How Often Should I Check Long-Term Investments?
You do not need to check charts as much as you do for day trading. Check as much as you feel comfortable with, be it once a week or once a month, safe in the knowledge that you do not intend to sell for a while and dips may be overcome.