Beginning Investors, These Are the 10 Best Online Stockbrokers for You
Here are the best online brokers if you're a beginning investor.
Choosing the right stockbroker can put new investors on the fast track to creating wealth and financial security. For this second annual Best Brokers rankings, GOBankingRates determined the Best Online Stockbrokers for Beginners. The list is tailored toward newer investors, so brokerages that focus on advanced trading support might not have scored as highly as those providing better educational tools for novices.
Best Online Stockbrokers for Beginners 2019-2020 Guide:
- Best Online Stockbrokers for Beginners at a Glance
- In-Depth Look at the Best Online Stockbrokers for Beginners
- How We Picked the Best Online Stockbrokers for Beginners
- Online Stockbrokers FAQs
Best Online Stockbrokers for Beginners at a Glance
Refer to this table to quickly compare the Best Online Stockbrokers’ fees, minimums and promotions:
| Best Online Stockbrokers for Beginners 2019-2020 | ||||
| Broker | Cost To Trade | Account Minimum | Promotions | |
 | Merrill Edge | $2.95 | $0 |
|
 | E-Trade | $0 | $500 |
|
 | Charles Schwab | $0 | $0 |
|
 | Fidelity | $0 | $0 |
|
 | TD Ameritrade | $0 | $0 |
|
 | Interactive Brokers | $0 for IBKR Lite | $0 |
|
 | Firstrade | $0 | $0 |
|
 | TradeStation | $5 | $500 |
|
 | Wells Fargo | $5.95 | $0 |
|
 | SogoTrade | $2.88-$4.88 | $0 |
|
Up Next: Do You Need a Broker To Buy Stocks?
In-Depth Look at Best Online Stockbrokers for Beginners
The Best Online Stockbrokers for Beginners have low trading fees and commissions. All 10 listed here have low or no account minimums, so that you can get started with very little money. Special incentives make trading even more affordable.
Explore: What Is a Brokerage Account?
Merrill Edge
Merrill Edge is the self-directed investment platform of Merrill Lynch, which is now a Bank of America company.
Why It’s a Best Online Broker for Beginners: At $2.95 per trade, fees aren’t the cheapest of the online brokers, but in return, you get the backing of one of Wall Street’s most legendary firms, with no account minimum. Although the Merrill Edge account is self-directed, customers still have access to extensive financial education programs, both online and via a financial advisor.
Pros:
- Backing of two of America’s most prestigious financial firms — Merrill Lynch and Bank of America
- Sign-up bonus
- Unlimited free trades with a three-month average combined balance of $20,000 with Preferred Rewards
Cons:
- No commission-free exchange-traded funds
- Not as slick and user-friendly as other, newer firms
Promotions:Â
- Currently, new customers can earn up to a $600 bonus for opening an account through Merrill Edge. Although the full bonus requires a deposit of at least $200,000, even a $20,000 deposit qualifies for a $100 bonus.
- Get unlimited free trades with a qualifying minimum combined balance through the Preferred Rewards program.
- Save up to $15 on federal versions of TurboTax products.
Fees and Costs: $2.95 per trade
To learn more about Merrill Edge, visit its website.
Find Out:Â Pros and Cons of Online Trading
E-Trade
E-Trade is one of the pioneers of online trading.
Why It’s a Best Online Broker for Beginners: E-Trade’s easy-to-use online interface and two mobile apps make it a top online broker for beginners. E-Trade charges $0 per trade but does require a $500 minimum to open an account.
Pros:
- Commission reduction for active traders
- Intuitive online and mobile interfaces
- Access to financial advisors and other products beyond trading
Cons:
- $500 minimum required to open an account
Promotions:
- $200-$600 cash credit for depositing $25,000-$499,999
Fees and Costs: $0 per trade
Account Minimum: $500
To learn more about E-Trade, visit its website.
Charles Schwab
Charles Schwab lands in this survey of online stockbrokers based on the strength of a $0 minimum balance requirement and a $0 trade commission.
Why It’s a Best Online Broker for Beginners: Charles Schwab has always made it a priority to put customers first. The firm offers numerous services on top of client-directed online trading, including an automated investing platform and access to financial advisors. Charles Schwab also offers over 500 commission-free exchange-traded funds available on U.S. exchanges and access to no-load, no-transaction-fee mutual funds.
Pros:
- Commission-free ETFs and mutual funds
- Access to financial advisors and automated investing
Cons:
- Steep $5,000 minimum for automated investing with Schwab Intelligent Portfolios
Promotions: None currently
Fees and Costs: $0 per trade
Account Minimum: None
To learn more about Charles Schwab, visit its website.
See: What Is a Money Market Mutual Fund?
Fidelity
Fidelity is one of the oldest and most well-established firms on Wall Street.
Why It’s a Best Online Broker for Beginners: Fidelity is a low-fee broker that doesn’t charge anything for transactions that cost money at other firms, such as transferring out of your account or having insufficient funds. In addition to its well-known line of mutual funds and zero-expense-ratio index mutual funds, Fidelity has an online trading program with free trades and no account minimum.
Pros:
- No account fees or minimums
- Index funds with zero expense ratio
- Limited fees
- Access to advanced asset management for an additional fee
- No cost to buy Fidelity funds and hundreds of additional other funds
Cons:
- Fees for additional services can get high
Promotions:
- Currently, customers get $20-$30 off various tax preparation programs, such as TurboTax and TaxAct.
Fees and Costs: $0 per trade
Account Minimum: None
To learn more about Fidelity, visit its website.
Related: Best Stocks For Beginners
TD Ameritrade
TD Ameritrade, one of the largest online brokers, acquired Scottrade in 2017, making a formidable combination.
Why It’s a Best Online Broker for Beginners: TD Ameritrade offers more than 550 ETFs on a commission-free trading basis, and it has trading platforms for investors at every level — from novice to experienced. The broker’s $0Â commission fee for online stock trades is a good deal, and there are no account or trade minimums.
Pros:
- Commission-free ETFs
- Multiple trading platforms
- No account minimums
- Extensive network of branches across America
Cons:
- There’s a $75 fee for an outbound full account transfer
Promotions:
- $100 bonus when you fund your account with $25,000-$99,999
- $300 bonus when you fund your account with $100,000-$249,999
- $600 bonus when you fund your account with $250,000-$999,999
Costs and Fees: $0 per trade
Account Minimum: None
To learn more about TD Ameritrade, visit its website.
Learn More: Must-Have Things the Best Brokers Have in Common
Interactive Brokers
Interactive Brokers has an advanced trading platform for experienced traders, but it also offers advantages for beginners.
Why It’s a Best Online Broker for Beginners:Â With Interactive Brokers, IBKR Lite customers get free trades. Interactive also has its own roster of commission-free ETFs from a variety of fund families listed on U.S. exchanges.
Pros:
- On-demand learning about Interactive Brokers’ products and services
- Advanced trading platform for when customers move past the beginning stage
- Very low commission costs
Cons:
- Inactivity fee for IBKR Pro customers
Promotions:
- Get a free trial that includes access to all platforms, market data and trading tools.
- Get a chance to win $1,000 in commission credits for trying Interactive Brokers’ sports betting game.
Costs and Fees: $0 for IBKR Lite accounts
Account Minimum: $0
To learn more about Interactive Brokers, visit its website.
Understand:Â What Is a Stock Brokerage Fee?
Firstrade: Best for Low Fees
Firstrade might not be a household name when it comes to online brokerages, but that could be changing.
Why It’s a Best Online Broker for Beginners: No account minimums and commission-free stock trades might spark the interest of investors looking for the broker that lets you keep the most money. Using either the website or the user-friendly app, you can buy and sell stocks, ETFs, options, fixed income funds and over 11,000 mutual funds free of charge. But Firstrade is more than a bare-bones trading vehicle — it also provides research from noted industry experts like Morningstar.
Pros:
- Commission-free trading
- Access to industry-leading research
- Slick mobile app interface
Cons:
- No opportunity for a managed portfolio or robo-advisor platform
Promotions:
- Up to $200 in transfer fee refunds when you transfer your account from another broker
- One free stock for each friend referral to Firstrade
Costs and Fees: None
Account Minimum: None
To learn more about Firstrade, visit its website.
TradeStation
Originally designed for professional traders, TradeStation’s platform is now open to investors of all levels of experience.
Why It’s a Best Online Broker for Beginners: There’s still a $500 minimum to open an account, and trades cost $5 each to execute, so the firm isn’t a low-cost, low-minimum leader. But if you open a TradeStation account now, you could qualify for no-commission trading through the end of the year.
Pros:
- Advanced trading tools for active investors using both mobile app and the web
- Free trading through the rest of 2019 under current promo
- Extensive market research and insights available for free
Cons:
- No commission-free ETF or mutual fund trading
Promotions:
- Transfer at least $25,000 into your TradeStation account for a cash reward.
- Active and retired military personnel get free and discounted scholarships to Online Trading Academy.
- Earn 0.55% interest on your account balance with a qualifying account minimum.
- Earn interest on long stock positions via TradeStation’s Fully Paid Stock Program.
Costs and Fees: $5 per trade
Account Minimum: $500
To learn more about TradeStation, visit its website.
Wells Fargo
Although Wells Fargo is a stalwart of the traditional banking industry, it’s also at the forefront of the online brokerage movement.
Why It’s a Best Online Broker for Beginners: There’s no minimum to open an online brokerage account, but you’ll pay a $5.95 fee for individual trades. As one of the biggest banks in the country, Wells Fargo’s comprehensive roster of products and services — including market insight and commentary, mutual fund screeners and other investor resources and tools — can be particularly helpful for newer investors.
Pros:
- Extensive research and basic financial information suitable for beginning investors
- No account minimums
- Access to Wells Fargo financial advisors if you need additional assistance
Cons:
- One of the more expensive online trading options
Promotions: Get a discounted rate of $2.95 per trade when you link your Wells Fargo Advisors WellsTrade brokerage account to your Portfolio by Wells Fargo program.
Costs and Fees: $5.95 per trade
Account Minimum: None
To learn more about Wells Fargo, visit its website.
SogoTrade
SogoTrade’s relative affordability earns it a spot in the Best Online Brokers for Beginners list.
Why It’s a Best Online Broker for Beginners: SogoTrade has several trading platforms that you can customize based on your own personal trading acumen. There’s no account minimum, and you get discounts for being an active trader and purchasing trade bundles in advance.
Pros:
- Relatively cheap commissions
- Advanced mobile and web platforms
Cons:
- Limited support for newer traders
- No commission-free ETFs
Promotions: New customers get 100 free trades with a new account, good for 30 days.
Costs and Fees: $4.88 per trade; $3.88 per trade with the purchase of a multitrade bundle; $2.88 if you make at least 150 trades per quarter
Account Minimum: None
To learn more about SogoTrade, visit its website.
Related: How To Find a Broker and Start Investing
How We Picked the Best Online Stockbrokers for Beginners
GOBankingRates determined the Best Online Stockbrokers for Beginners by analyzing 23 of the largest and up-and-coming online brokers, using the following criteria:
- Cost to trade equities, such as stocks and ETFs
- Opening minimum investment requirement
- Access to a financial advisor
- Available promotional offers
- 24/7 phone customer service
- Live chat with human representative
- Mobile app availability
- Educational resources, such as webinars, blogs and courses that teach investing and trading
- Research and tools, such as multiple trading platforms, in-depth market analysis, and screener tools for stocks, ETFs and bonds
Each broker was scored based on these individual categories, which were then summed up for a final score. Because these online brokers are meant for beginners, cost to trade, minimum opening investment requirement, educational resources and research tools were weighted double for the final scoring.
Online Stockbrokers FAQs
Here a few questions that are common around the topic of online stockbrokers — and answers to them:
What Is a Stockbroker?
A stockbroker is a person or a company that buys and sells securities such as stocks, bonds, mutual funds and other investments on behalf of clients.
Do You Need a Lot of Money To Use a Stockbroker?
No. Some brokers have a $0 account minimum, and many even offer free trades.
What Do You Need To Open a Brokerage Account?
Although requirements vary from firm to firm, at the very least, you should expect to provide identification and basic personal and financial information like your name, address, date of birth, Social Security number, employment status, annual income, net worth, investment profile and a trusted contact person.
What Are Brokerage Account Fees?
Brokerages can charge fees like commissions on trades, mutual fund sales loads and account transfer fees, among others. The best brokers charge minimal fees.
Is My Money Safe in a Brokerage Account?
All legitimate brokerage firms are members of the Securities Investor Protection Corporation, or SIPC, which insures customer accounts up to $500,000 if a firm fails. Of that $500,000 in protection, up to $250,000 in cash is insured.
Can You Cash Out a Stock Brokerage Account?
You can cash out a brokerage account at any time, but you might have to pay commissions to sell your securities, plus a fee to transfer the money out. These terms vary from broker to broker.
More Best Brokers of 2019-2020Â
- Best Online Brokerages
- Best Day Trading Platforms
- Best IRA Providers
- Best Robo-Advisors
- Best Roth IRA Providers
- Best Investment Apps
- Best 401(k) Companies
John Csiszar worked in the financial services industry for 18 years as a registered investment adviser and certified financial planner, first for a major Wall Street firm and then as the owner-operator of a boutique investment firm. He now serves as an investment writer for various major publications.
Andrew DePietro contributed to the reporting for this article. He is the lead researcher for GOBankingRates and a finance writer with years of experience covering investing, taxation, Social Security, entrepreneurship, real estate and housing markets.
Methodology: To determine the Best Brokers of 2019-2020, GOBankingRates analyzed 47 active U.S. brokerages and investment companies across eight categories: (1) Best Online Brokerages, (2) Best Online Stockbrokers for Beginners, (3) Best Robo-Advisors, (4) Best Investment Apps, (5) Best IRA Providers, (6) Best Roth IRA Providers, (7) Best Brokers for Day Traders, (8) Best 401(k) Companies.
Data for Best Brokers was compiled from and verified against the individual institutions’ websites between July 1, 2019, and Aug. 2, 2019. That data has been updated in this article as of Oct. 31, 2019, but the rankings are based on the original data. 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 any benefits mentioned. Availability might vary by region, minimum investment amounts and other factors. Please verify the terms and conditions before opening an account.
GOBankingRates is a personal finance 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. For more information, see the complete methodology for the rankings.Â
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