The Best Online Stock Brokers for Beginners
The best brokers for beginners are designed with you in mind.Investing for beginners can be difficult. With so much complicated information swirling around, plenty of people are discouraged before they even start, frequently deciding not to bother — a mistake that can cost you a lot of money over the years. The good news is that there are plenty of online stock brokers that are well-suited for beginning investors, making it easy to open an account, pay less in commissions and access tools that’ll help you understand where your money is going and what it all means. By following a few guidelines, almost anyone can start investing.
If you’re ready to start investing, taking the time to find the best online stock broker for beginners can be a crucial first step. That’s why the GOBankingRates Best Brokers ranking has keyed in on the best brokers for beginners. The best stock broker for a knowledgeable investor is not going to be the same thing as the best broker for beginners, so before you open an account, take some time to review some of your options.
If you’re looking for the best online brokerage for beginners, here are the best brokers to consider:
- Charles Schwab
- TD Ameritrade
- Merrill Edge
- E-Trade
- Fidelity
The Best Brokers for Beginners
All five of these brokers offer access to financial advisors and 24/7 customer service via phone, so you should be able to get help answering your questions if — or more likely when — you need it. And while you should always strive to reduce the commissions and fees you pay as much as possible, beginning investors should probably be making a lot fewer trades in total as they learn the ropes, so accepting a slightly higher per-trade commission could be worth it for a platform that helps you understand your portfolio and feel more comfortable with the process.
Here’s a deeper dive into the costs associated with the best brokers for beginning investors:
Charles Schwab
Charles Schwab is a brokerage with a lot of history, and that can mean there are a lot of options for advisory services available as you grow as an investor. It also offers robust research and education tools available to help you get more comfortable with the process, as well as live chat with a person if you have questions.
All of this comes with a $4.95 per-trade commission, which puts Schwab firmly among the lowest-cost brokers. There is a $1,000 minimum to open an account that is not ideal for many beginners looking to test the waters before jumping in, but that’s waived if you set up a recurring monthly deposit of $100 or more, so you can still get started at a lower level if you’re also ready to commit to slowly scaling it up.
Where Charles Schwab Shines
- Low per trade commission
- Robust customer service and advisory options including live chat and 24/7 customer service
- Introductory offer of 500 commission-free trades over two years
Where Charles Schwab Falls Short
- $1,000 minimum balance to open an account
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TD Ameritrade
At $6.95 a trade, TD Ameritrade is a little bit pricier than the most inexpensive options. However, TD Ameritrade does offer commission-free trades on a list of over 300 exchange-traded funds, which — given that ETF trading is often one of the best options for novice investors — could mean that you’ll never actually need to pay that commission. While the offer of up to $600 in bonus cash and 60 days of free trades is attractive, it’s worth noting that you need to deposit at least $25,000 to get any bonus cash and at least $250,000 to get that $600, which is a perk that most beginning investors probably won’t qualify for.
Where TD Ameritrade Shines
- Robust customer service options including live chat and 24/7 customer service
- Free trading on over 300 ETFs
Where TD Ameritrade Falls Short
- $6.95 per trade commission
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Merrill Edge
Merrill Edge is the platform offered by investment banking stalwart Merrill Lynch, and it does warrant some special consideration if you are already banking with Bank of America — the parent company of Merrill Lynch. While probably not worth it for beginning investors, there are Platinum membership tiers with some significant cost advantages for anyone who banks with Bank of America and has a large enough account.
Even if you’re not a Bank of America customer, there’s no minimum to open an account and up to $600 in bonus cash for large enough initial deposits. The research and education tools aren’t as strong as some of the other options in this ranking, but if you already have other instructional sites you’re comfortable with — GOBankingRates, for instance — that might not matter as much to you.
Where Merrill Edge Shines
- No minimum to open an account
- Robust customer service options including live chat and 24/7 customer service
Where Merrill Edge Falls Short
- $6.95 per trade commission
- Less robust research and education tools
Click to see the best features to look for when choosing a broker.
E-Trade
While E-Trade does offer a volume discount that cuts your commission to $4.95 per trade when you make at least 30 trades a month, that really shouldn’t come into play for a novice investor, so the $6.95 rate is most likely what you’ll be paying if you go with E-Trade.
But while the trading costs are a little higher than the cheapest options, E-Trade does allow you to open an account without a minimum deposit and offers up to $600 in cash and 60 days of free trading for large first-time deposits.
Where E-Trade Shines
- No minimum balance to open an account
- Better pricing if you develop into an active trader
- 24/7 customer service available by phone
Where E-Trade Falls Short
- $6.95 per trade commission
See: The Best Traditional IRAs for Your Nest Egg
Fidelity
Fidelity is another broker occupying the $4.95-per-trade tier, which is consistent across most of the industry as one of the lowest trading commissions, so newcomers can feel good about the fees they’re paying. What’s more, there’s no commission charged on select Fidelity ETFs and iShares ETFs, meaning you can even manage free ETF trading if you like the commission-free options available.
That said, the $2,500 minimum to open a new account could be a significant barrier for a lot of starting investors. Likewise, the 500 free trades with a new account requires a deposit of at least $100,000, which might be out of reach for many novices. Fidelity is also another site where the research and educational tools are less robust. Still, if you are prepared to make a larger financial commitment at the start, the low per-trade cost and free trading on select ETFs could be a major draw for you.
Here’s Where Fidelity Shines
- $4.95 per trade commission
- Free trading on select ETFs
- 24/7 customer service via phone
Here’s Where Fidelity Falls Short
- $2,500 minimum opening deposit
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Methodology: To determine its Best Online Stock Brokers for Beginners category ranking, GOBankingRates examined the top brokerages, excluding nonactive institutions.
Criteria for ranking: GOBankingRates scored the brokerages from most to least favorable on the following factors: (1) cost to trade, (2) access to financial advisors, (3) research and educational tools and (4) customer experience, which includes: mobile and online access and 24/7 customer service with a live person. Brokerages were then ranked according to their total score. Data for Best Brokers was compiled from and verified against the individual institutions’ websites between June 13 and August 1, 2018. Costs, terms and conditions are subject to change at the discretion of the individual financial institutions. Some information might reflect short-term or promotional offers only, and it is possible additional terms and conditions must be met in order to obtain the terms listed. Availability might vary by region, minimum investment amounts and other factors. Please verify terms and conditions before opening an account.
GOBankingRates is a personal finance and consumer interest rate website owned by ConsumerTrack, Inc., an online marketing company serving top-tier banks, credit unions and other financial services organizations. Some brokerages mentioned in Best Brokers are clients of ConsumerTrack, Inc., which serves more than 100 national, local and online financial institutions. Rankings are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement.
