Since the proliferation of the internet, the cost of stock transactions has decreased significantly for consumers. What used to be conducted in person or over the phone, can now be done online with the click of a button. As more brokerages have entered the industry to offer discount brokerage options, the price of transactions has continued to fall. In 1997, Charles Schwab charged $29.95 per online stock trade. Charles Schwab is now charging $8.95 for that same transaction, while offering better online research tools.

Although most people transact with their discount broker through the internet, that doesn’t eliminate the option for a face-to-face transaction. Many of the discount brokers, such as Scottrade, have physical locations for people who are weary of using the internet for financial transactions.

Consumer Reports, an independent testing organization (which I highly respect), has recently released its 2012 list of the best discount brokers. For some of its lists, Consumer Reports relies heavily on testing. However, this is not one of those. While full-service brokerages were evaluated by actual human testers, the discount or online brokerages were not. These brokerages were rated based on surveys from readers.

Best Discount Brokerages 2012

Unfortunately, its highest rated brokerage isn’t available to all. USAA is only available for those with a military connection. However, Scottrade and Vanguard both did quite well in the survey, and Consumer Reports notes that a difference of 4 points is not statistically significant. This means that any difference greater than 4 points shows an actual difference, and is not due to standard error. I’ve long been a fan of Scottrade, having recommended it to family and friends. I am also a big proponent of Vanguard’s low-cost philosophy, and I invest in a number of its index funds.

If you’re currently paying for a full-service brokerage but not taking advantage of the benefits, you should consider a discount brokerage. The list above is a great place to start in your search for a new brokerage. I also recommend checking out SmartMoney’s list of the best and worst discount brokers here.