Everdend’s Top Brokerage Picks
The Everdend Guide to Choosing the Right Brokerage for Dividend Investing
Quick Glance...
Selecting the right brokerage is an important first step in any dividend investing journey. The chosen brokerage determines available investment options, associated fees, and access to tools for building and monitoring dividend portfolios.
This guide evaluates all five of Everdend’s Top Brokerage Picks for dividend investors: Robinhood, M1 Finance, eToro, Interactive Brokers, and Ally Invest. We assess each platform based on the features that matter most to dividend-focused investors, from DRIP options to specialized dividend screening tools.
Table of Contents
- Quick Selection Guide
- Brokerage Profiles
- Core Feature Comparison
- Advanced Dividend Tools Comparison
- Brokerage DRIP Features Explained
- Brokerage Specialized Features Explained
- Real-World Investor Scenarios
- FAQs About Dividend Investing Brokerages
- Special Considerations for Dividend Investors
- Account Types for Dividend Investing
- Conclusion & Next Steps
Quick Selection Guide
For practical reasons or for those who may just want to try or test out dividends, this can be the most important starting point.
| Experience Level | Starting with $100 or less | Starting with $100-$1,000 | Starting with $1,000+ |
|---|---|---|---|
| Beginner | Robinhood | M1 Finance | Ally Invest |
| Intermediate | M1 Finance | eToro | Ally Invest |
| Advanced | --- | Ally Invest | Interactive Brokers |
Brokerage considerations are subject to change and not guaranteed. Latest data gathered from available industry-standard sources.
Why Choosing the Right Brokerage Matters
A brokerage serves not only as an account for investments but as a toolbox for building dividend portfolios. Different platforms offer different levels of dividend-specific features, from automatic reinvestment to advanced screening tools that help identify quality dividend stocks. The ideal choice should align with an investor's style, goals, and preferred level of hands-on management.
Key Factors We Consider
- Commission and fee structure
- Dividend reinvestment (DRIP) capabilities
- Availability of fractional shares
- Dividend-specific research tools and screeners
- Account minimums
- Ease of use and mobile accessibility
- Tax reporting features
- Customer service quality
- Account types supported (taxable, IRA, etc.)
Brokerage Profiles
Key Features:
- Commission-free stock and ETF trades
- Fractional share investing (as little as $1)
- Simple, intuitive mobile-first design
- Instantaneous deposit capability
- Cash management account with competitive yield
Dividend-Specific Tools:
- Automatic dividend tracking
- Basic dividend yield information
- Optional dividend reinvestment program
- Monthly dividend payout summary
Key Features:
- Unique and affordable "pie" portfolio structure for asset allocation
- Automated rebalancing
- Commission-free trades
- Fractional shares
- Scheduled automatic investments
- Integrated banking and borrowing options
Dividend-Specific Tools:
- Automatic dividend reinvestment
- Dividend tracking dashboard
- Expert-created dividend portfolio templates
- Visualization of dividend income
Key Features:
- Commission-free stock and ETF trades
- Fractional shares for stocks and ETFs
- Social trading and copy-trading portfolios
- Intuitive mobile and web platforms
- Community-driven investment insights
Dividend-Specific Tools:
- Automatic dividend reinvestment
- Basic dividend yield tracking
- Copy-trading dividend-focused portfolios
- Dividend payment history
Key Features:
- Commission-free US stock and ETF trades
- Advanced Trader Workstation platform
- Access to 150+ global markets
- Extensive research and screening tools
- Low margin rates
- Multiple account types (taxable, IRA, trust)
Dividend-Specific Tools:
- Advanced dividend screener with 20+ metrics
- Dividend income projections
- Customizable dividend calendar
- Tax efficiency analysis
- Portfolio analytics for dividend performance
Key Features:
- Commission-free stock and ETF trades
- Fractional shares for stocks/ETFs
- Robo-advisor portfolios for automated investing
- Integration with Ally Bank for budgeting
- 7 AM–10 PM ET phone support, 24/7 chat / email
- Multiple account types (taxable, IRA)
Dividend-Specific Tools:
- Automatic dividend reinvestment
- Basic dividend screener
- Dividend tracking dashboard
- Robo-portfolio dividend focus options
Core Feature Comparison
This comprehensive comparison highlights the key features across our five top brokerage picks. While all platforms offer commission-free trading for stocks and ETFs, they differ in areas such as account minimums, fractional share availability, robo-advisor options, physical presence, and customer support channels.
This table provides a snapshot of essential features to help investors choose the platform that best aligns with their individual investment needs and preferences.
| Feature | Robinhood | M1 Finance | eToro | Interactive Brokers | Ally Invest |
|---|---|---|---|---|---|
| Stock/ETF Commissions | $0 | $0 | $0 | $0 | $0 |
| Account Minimum | $0 | $100 | $0 | $0 | $0 |
| Fractional Shares | ✓ | ✓ | ✓ | ✓ | ✓ |
| Automatic Dividend Reinvestment | ✓ | ✓ | ✓ | ✓ | ✓ |
| Retirement Accounts | ✓ | ✓ | ✓ | ✓ | ✓ |
| Robo-Advisor Option | ✗ | ✓ | ✗ | ✗ | ✓ |
| Physical Branches | ✗ | ✗ | ✗ | ✗ | ✗ |
| Mobile App Rating | Excellent | Very Good | Very Good | Good | Very Good |
| Dividend Screener | Basic | Basic | Basic | Advanced | Basic |
| Customer Service | Chat / Email | Chat / Email / Phone | Chat / Email / Phone | 24/7 Phone / Chat | 7 AM–10 PM ET Phone, 24/7 Chat / Email |
| Banking Features | ✓ | ✓ | ✗ | ✗ | ✓ |
| Educational Resources | Basic | Mid | Mid | Extensive | Mid |
Features are subject to change and not guaranteed. Latest data gathered from available industry-standard sources.
Advanced Dividend Tools Comparison
Dividend Yield Screening Capabilities
Dividend yield screening tools help investors find stocks that match income goals. The best platforms let users filter for steady dividend growth, manageable payout ratios, and safety metrics that show how likely future payments will continue.
| Brokerage | Basic Dividend Yield Filter | Advanced Dividend Growth Filters | Dividend Payout Ratio Analysis | Dividend Safety Metrics |
|---|---|---|---|---|
| Robinhood | ✓ | ✗ | ✗ | ✗ |
| M1 Finance | ✓ | ✗ | ✗ | ✗ |
| eToro | ✓ | ✗ | ✗ | ✗ |
| Interactive Brokers | ✓ | ✓ | ✓ | ✓ |
| Ally Invest | ✓ | ✗ | ✗ | ✗ |
Features are subject to change and not guaranteed. Latest data gathered from available industry-standard sources.
Dividend Reinvestment Options
Dividend reinvestment programs (DRIPs) automatically purchase additional shares with dividend payments, enabling compound growth. Platforms with fractional share DRIP ensure that 100% of dividends can be reinvested rather than leaving cash remainders.
| Brokerage | Automatic DRIP | Fractional Share DRIP | Customizable DRIP by Security | Scheduling Options |
|---|---|---|---|---|
| Robinhood | ✓ | ✓ | ✗ | ✗ |
| M1 Finance | ✓ | ✓ | ✗ | ✓ |
| eToro | ✓ | ✓ | ✗ | ✗ |
| Interactive Brokers | ✓ | ✓ | ✓ | ✓ |
| Ally Invest | ✓ | ✓ | ✓ | ✗ |
Features are subject to change and not guaranteed. Latest data gathered from available industry-standard sources.
Dividend Income Analysis Tools
Dividend income analysis tools track dividend history, project future income, help plan around payment dates with dividend calendars, and optimize for tax efficiency across different account types.
| Brokerage | Dividend History Tracking | Future Income Projections | Dividend Calendar | Tax Efficiency Analysis |
|---|---|---|---|---|
| Robinhood | ✓ | ✗ | ✗ | ✗ |
| M1 Finance | ✓ | ✓ | ✗ | ✗ |
| eToro | ✓ | ✗ | ✗ | ✗ |
| Interactive Brokers | ✓ | ✓ | ✓ | ✓ |
| Ally Invest | ✓ | ✓ | ✗ | ✗ |
Features are subject to change and not guaranteed. Latest data gathered from available industry-standard sources.
Brokerage DRIP Features Explained
Dividend Reinvestment Plans (DRIPs) automatically reinvest dividend payments into additional shares of the same stock. This powerful compounding tool is offered by all five brokerages reviewed, but with different features:
Basic DRIP (Robinhood, eToro)
- Toggles on/off for entire portfolio or individual securities
- Reinvests into fractional shares
- No customization for individual securities
Intermediate DRIP (M1 Finance)
- Automatically reinvests according to target portfolio allocations
- Can be scheduled and automated
- Reinvests across the entire "pie" rather than just into the dividend-paying stock
Advanced DRIP (Interactive Brokers, Ally Invest)
- Can be customized for each position
- Options for partial reinvestment
- Detailed tracking of reinvested dividend performance
It's important for investors to consider preferences for reinvestment control when selecting a brokerage. Some investors prefer automatic reinvestment into the same security (traditional DRIP), while others want dividends pooled for strategic redeployment.
Brokerage Specialized Features Explained
Dividend Growth Screening
What It Is: Advanced filtering tools that identify stocks with consistent dividend growth over time periods (typically 5, 10, or 25+ years).
Definition: Dividend Growth Screening helps investors find "Dividend Aristocrats" (25+ years of dividend increases) and other companies with consistent dividend increases—often a sign of financial health and management’s commitment to shareholder returns.
Why It Matters: Companies that consistently raise dividends tend to be stable and profitable businesses with strong free cash flow. These screens help identify quality companies with reliable management teams committed to increasing shareholder returns over time.
Brokerage Strength: Interactive Brokers Interactive Brokers offers a comprehensive dividend growth screening tool, with over 20+ metrics including growth rates, payout ratios, and sector stability.
Payout Ratio Analysis
What It Is: Tools that track what percentage of a company’s earnings or free cash flow is being paid out as dividends.
Definition: The Payout Ratio indicates dividend sustainability by showing what portion of profits a company distributes to shareholders. Lower ratios (generally below 60% for most industries) suggest more sustainable dividends with room for future growth.
Why It Matters: An extremely high payout ratio may indicate an unsustainable dividend that could be cut in economic downturns. Advanced payout ratio analysis tools help dividend investors assess the safety and growth potential of their income streams.
Brokerage Strength: Interactive Brokers provides robust payout ratio analysis, with detailed earnings and cash flow metrics plus industry benchmarks.
Dividend Calendar Integration
What It Is: Tools that display upcoming dividend payments, ex-dividend dates, and payment histories in a calendar format.
Definition: A Dividend Calendar tracks important dates including declaration dates, ex-dividend dates (when an investor must own the stock to receive the upcoming dividend), record dates, and payment dates across an entire portfolio.
Why It Matters: Dividend calendars help investors plan their cash flow, ensure they don’t miss out on important ex-dividend dates when buying or selling, and visualize how their passive income is spread throughout the year.
Brokerage Strength: Interactive Brokers offers a customizable dividend calendar with notifications and external calendar integration.
Social Trading
What It Is: Tools that allow investors to follow and copy the portfolios of experienced traders, including those focused on dividend stocks.
Definition: Social Trading allows investors to follow, interact with, and replicate the investment strategies of experienced traders within a community-driven platform. Users can view others’ portfolios, track their performance, and automatically copy trades to build their own portfolios based on shared insights and expertise.
Why It Matters: Social trading enables less experienced investors to leverage community insights and replicate successful dividend strategies without extensive research.
Brokerage Strength: eToro’s social trading platform lets investors copy dividend-focused portfolios, ideal for community-driven dividend investing.
Real-World Investor Scenarios
Understanding which brokerage might work best often becomes clearer when viewing options through the lens of specific investor profiles. Below are three common dividend investor types and recommended platforms for each:
Beginning Dividend Investor: Sarah
Profile: 25 years old, starting her first job, has $50–100 per month to invest, new to stock market investing, interested in building a dividend portfolio over time for passive income.
Key Needs:
- Low minimum to start
- Fractional shares to diversify small amounts
- Simple, intuitive interface
- Educational resources to learn as she goes
Best Brokerage Match: Robinhood or Ally Invest
Why It Fits: Robinhood’s zero minimum and fractional shares let Sarah start immediately with small amounts. The simple interface won’t overwhelm her. Ally Invest offers a user-friendly platform and robo-advisor options, plus budgeting integration, ideal for beginners.
Systematic Dividend Builder: Michael
Profile: 35 years old, mid-career professional, investing $500 monthly toward dividend growth, values automation and systematic portfolio building.
Key Needs:
- Automated recurring investments
- Portfolio rebalancing
- More comprehensive research tools
- Retirement account options
- Dividend growth screening
Best Brokerage Match: M1 Finance or Ally Invest
Why It Fits: M1 Finance’s automated investing and pie-based portfolio structure suits Michael’s systematic approach, handling periodic investments and rebalancing. Ally Invest provides robo-advisor portfolios and budgeting tools, supporting systematic dividend building.
Retirement-Focused Dividend Planner: Dave
Profile: 52 years old, accelerating retirement savings, has $250,000 portfolio annually focused on dividend income, wants comprehensive tools and personalized advice.
Key Needs:
- Advanced dividend screening
- Tax-efficient planning across multiple accounts
- Retirement income projections
- High-quality customer service
- Estate planning considerations
Best Brokerage Match: Interactive Brokers or Ally Invest
Why It Fits: Interactive Brokers offers advanced screening, analytics, and tax tools for Dave’s portfolio. Ally Invest provides robo-advisors and 24/7 support, suitable for retirement-focused investors seeking automation and guidance.
FAQs About Dividend Investing Brokerages
Getting Started
How much money do I need to start dividend investing?
Investors can start with as little as $1 using fractional shares at Robinhood, M1 Finance, or Ally Invest. For a more diversified dividend portfolio, aiming for $500–$1,000 provides better diversification options.
Should beginners focus on individual dividend stocks or dividend ETFs?
Many beginner dividend investors start with dividend ETFs like SCHD or VYM to gain instant diversification before adding individual stocks as they gain experience and build capital.
How do I set up dividend reinvestment on these platforms?
Each brokerage platform handles DRIP setup differently:
- Robinhood: Toggle in Account → Investing
- M1 Finance: Automatically reinvests according to pie allocations
- eToro: Enable DRIP in account settings
- Interactive Brokers: Set up account-wide or per position in Trader Workstation
- Ally Invest: Enable DRIP account-wide or per position in account settings
Tax Considerations
Which brokerage offers the best tax documents for dividend investors?
Interactive Brokers provides comprehensive tax reporting, including categorized dividend income, qualified vs. non-qualified breakdowns, and foreign tax details.
How do the brokerages handle foreign dividend tax withholding?
All five brokerages automatically withhold required foreign taxes on international dividends. Interactive Brokers offers detailed documentation for claiming foreign tax credits.
Can I minimize dividend taxes through these brokerages?
Yes. Interactive Brokers offers robust tax-optimization tools, including specific lot identification, tax-loss harvesting, and fund placement recommendations.
Advanced Features
Which brokerage offers the best dividend stock screener?
Interactive Brokers offers the most comprehensive dividend screener with 20+ criteria, including growth rates, payout ratios, and consistency metrics.
Can I automatically reinvest dividends but also withdraw a portion for income?
Yes. Interactive Brokers and Ally Invest allow partial dividend reinvestment settings, e.g., reinvesting 75% while directing 25% to cash.
Do any of these brokerages offer dividend-focused portfolio analysis?
Yes. Interactive Brokers offers advanced dividend analytics, including projected income, income distribution, and sector concentration analysis.
Special Considerations for Dividend Investors
Tax Efficiency in Dividend Investing
Account Placement Matters: The location where dividend stocks are held can significantly impact after-tax returns:
- Taxable Accounts: Best for qualified dividend payers (most U.S. companies) that receive favorable tax treatment
- Roth IRA: Ideal for high-yield investments, REITs, and stocks with non-qualified dividends
- Traditional IRA/401(k): Good for dividend growers investors plan to hold through retirement
Dividend Types and Tax Implications
| Dividend Type | Tax Treatment | Typical Tax Rate | Best Account Type |
|---|---|---|---|
| Qualified Dividends | Preferential tax rates | 0%, 15%, or 20% based on income | Taxable |
| Non-Qualified (Ordinary) | Taxed as ordinary income | Individual marginal tax rate | Tax-advantaged |
| REIT Dividends | Mostly ordinary income | Individual marginal tax rate | Roth IRA |
| Return of Capital | Not taxed until cost basis reaches zero | Capital gains when selling | Taxable |
Tax information is subject to change and not guaranteed. Consult a tax professional before making decisions. Latest data gathered from available industry-standard sources.
Account Types for Dividend Investing
Each brokerage offers various account types that might serve specific dividend strategies:
Individual Taxable Account
- Available at all brokerages
- No contribution limits
- No withdrawal restrictions
- Qualified dividends receive preferential tax treatment
- Best for accessible funds and tax-efficient dividends
Roth IRA
- Available at all brokerages except basic Robinhood
- Contribution limits apply ($7,000, $8,000 if over 50)
- Tax-free growth and withdrawals in retirement
- No required minimum distributions
- Best for high-yield investments and compounding over decades
Traditional IRA
- Available at all brokerages except basic Robinhood
- Contribution limits apply ($7,000, $8,000 if over 50)
- Tax-deferred growth; taxed as ordinary income upon withdrawal
- Required minimum distributions at age 73
- Best for tax deduction now, dividend income in retirement
Specialized Accounts
- Custodial accounts for minors (UGMA/UTMA)
- Solo 401(k) for self-employed investors
- Trust accounts for estate planning
- HSA accounts for health savings (available at some brokerages)
Conclusion & Next Steps
Selecting the right brokerage is just the first step in building a successful dividend portfolio. The best platform for investors depends on investment amount, experience level, desired features, and planned activity level in managing investments.
For beginners, Robinhood and Ally Invest accessible entry points with user-friendly interfaces and low minimums. For intermediate investors, M1 Finance and Ally Invest provide automation and robo-advisor features. As portfolios grow, Interactive Brokers offers advanced research tools, tax efficiency features, and comprehensive dividend analytics for long-term investors.
Key Takeaways
- No single brokerage is perfect for all dividend investors; the choice should match each investor's specific needs
- Investors should consider their starting amount, experience level, and desired automation when selecting a platform
- Dividend-specific tools become increasingly important as portfolios grow
- Tax optimization features matter more for larger dividend portfolios but should still be a consideration for any size account
- The right brokerage should grow with an investor or be easy to transfer from when an investor's needs evolve
Remember that the best brokerage is one that helps investors start and stay consistent with a dividend investing plan. The most important step is to begin building a dividend portfolio, even if starting small.