Best for: Privacy
Local Bitcoins is a completely different type of exchange to the others on this list. The company is a peer-to-peer exchange which supports users in posting an advert stating payment methods and exchange rates for buying/selling their bitcoins.
A reply to an advertisement opens a trade, and escrow protection (protecting both the buyer and the seller) is activated.
Bitcoins are stored in a Local Bitcoins wallet, and from there, the user can pay for their purchases directly.
It is free to register, buy and sell bitcoin. It is also free to make a transaction to the wallet of another Local Bitcoin user. A 1% fee is charged for every completed trade.