Best brokerage accounts for new investors
Disclosure: We are committed to recommending the best products for our readers. We may receive compensation when you click on links to products, but this never affects our reviews or recommendations. If you want to manage your investments, the best way to do so today is with an online stock broker. There are a handful of excellent stock brokers to choose from, so knowing which is the best for your needs may be a challenge.
We Pick the Best Online Brokers
I started managing my own money in a brokerage account almost 10 years ago. I closely analyzed almost a dozen of the most popular brokerage platforms available with an eye towards ease of use, educational tools, and low costs. Some platforms were too sophisticated for newbies and others were just too inaccessible. But three are going to be great starting points for any beginner.
If you are native to mobile and are happy to get educational materials elsewhere, there really is no better platform than Robinhood. But if you want a little more hand-holding and hope to grow into more sophisticated strategies like options, either Fidelity with its best-in-class tools, or TD Ameritrade with its personal-level of guidance, are also going to be great choices for any beginner trader.
The first thing to know about online brokers: They let you put money in and take it right back out as you need it, unlike tax-deferred retirement accounts that have steep penalties if you cash out early.
Another important thing to know is that online brokers provide a huge universe of investments, unlike a k , which may only provide a total of 10 investment options. Not only do these charges add up, but they may ultimately lead you to make the wrong investments — doing lasting harm to your bank account as a result.
And your goal as a beginner is to take advantage of the investments not available to you elsewhere without racking up fees or making complex trades that erase your hard-earned savings. Admittedly, even with a great online broker it can be intimidating or challenging to invest at times. But unless you have a million dollar trust fund waiting, you have to figure this out.
The risks are real, yes, but so are the rewards. A good online broker like the three listed below can teach you some of the lessons I learned the hard way, and can help keep you from making some of the same mistakes. TD Ameritrade is an online broker that caters to investors of all types. No matter what your strategy, TD Ameritrade and its staff will help you live up to your full potential. For a beginner investor, there is no substitute for sitting down with someone when you need help.
That includes 1, investment consultants at roughly branches nationwide, and periodic seminars and conferences to help beginner investors. One thing I have learned since I started investing is that as my needs change. I often outgrow my old trading platform. The good news for beginners starting out with TD Ameritrade is that the platform offers a complete line of trading and investing services, including retirement accounts like IRAs, as well as the ability to aggressively day-trade stocks and options, if you choose.
But the costs are worth noting, and can be viewed in detail here. Cost Structure. Robinhood is truly an online broker for the 21st century.
Or, more precisely, the lack of trading fees altogether. There are none. As I said earlier, no broker is a charity. Robinhood indeed makes money off its users. But the way it makes money is precisely what makes it perfect for beginning investors. Margin accounts — that is, investing with borrowed money — can be a risky scenario and is not for beginners. Robinhood has upended the traditional broker experience by doing away with complex trading software and tools that most competitors offer.
You can sign up in just a few minutes on your smartphone, and make trades in seconds with just a few taps. For the new generation of investors who are native to mobile interfaces, it is refreshing to see a broker that offers this. And the easy-to-use app takes a lot of stress out of the equation for beginners, particularly those who prefer a mobile platform.
The downside of the mobile experience on Robinhood is, of course, an inability to provide as deep an experience as you get on larger computer screens, or in traditional browsers. And to be honest, as you learn the ropes as an investor, you will eventually grow beyond native tools provided by your broker and find other apps, websites, and research that fits with your own trading style.
And, honestly, part of the reason I have learned so much about markets and trading is because of the customizable research tools and screening software Fidelity offers its account holders.
You can learn a ton without even trading, simply by getting your hands dirty with the research tools and learning about all the different parts of the market, and how they fit together. You can sort ETFs by the sectors they focus on, their expenses, and even whether Fidelity offers a commission-free version to save you money on transactions.
Wall Street can be a confusing place when you first jump in. Want to explore the idea of backtesting, but need a little help? This is a powerful way to learn real-world investing techniques and put them into practice, instead of just reading about the topic elsewhere, then scratching your head when it comes time to actually do the work in your own brokerage account. Want to know more about ETFs and how the costs are structured?
As I said earlier, I was a customer of Fidelity for a long time, and I loved the platform. But I geek out on this stuff and love to test and research ideas for hours before making an actual trade, so those of you with a short attention span may simply be frustrated by all of the tools and information.
But if you really want to put in the work yourself to move beyond the kiddie pool and swim with the big fish on Wall Street, Fidelity is the platform for you. All these brokerage platforms are serious about making investing accessible for beginners through their interfaces and low cost structures.
If you want personal guidance from professionals and an easy-to-use trading platform, go with TD Ameritrade. Banking Financial Independence Financial Markets. Advertiser Disclosure. Meet the Author. Sign Up. Featured on:.
- Best web-based platform. Fidelity - Great education and research.
Clients in more than countries can trade on 19 international exchanges, all at competitive commissions and all from a single account. Most brokers charge a flat rate per trade rather than basing the commission on the size of the trade. That works very well for people making large trades, but people who trade smaller amounts or trade very frequently need to pay close attention to the size of the flat-rate commission. Competition among online brokers has driven commissions down to the point where some offer routine trading for absolutely no commission. Brokerage firms have found that they can make money from customer accounts in other ways such as securities lending.
Our content is free because we may earn a commission when you click or make a purchase from links on our site. Learn more about how we make money.
Find the best broker for you. Firms have been trimming commissions, expanding their online tools, offering more transaction-free mutual funds and enhancing their mobile apps. Why this lineup?
Best Online Brokers for Beginners
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence. Our articles, interactive tools, and hypothetical examples contain information to help you conduct research but are not intended to serve as investment advice, and we cannot guarantee that this information is applicable or accurate to your personal circumstances. Any estimates based on past performance do not a guarantee future performance, and prior to making any investment you should discuss your specific investment needs or seek advice from a qualified professional. The offers that appear on this site are from companies that compensate us.
Best Online Stock Trading of 2020
The Tokenist aims to bring you the most accurate, up-to-date, and helpful information when it comes to your finance. You work hard for your money — and we work hard for you. Some of the products and services we review are from our partners. In order to operate, The Tokenist may receive financial compensation from our partners when you purchase products, services, or create accounts through links on our website. Robinhood is one of our partners. Partnerships do not influence what we write, as all opinions are our own. Click here for a full list of our partners and an in-depth explanation on how we get paid. Some brokers focus more on guidance and support, while others prioritize advanced tools and the ability to grow with you. Even with COVID causing a sharp drop in the stock market, more people are downloading stock apps than ever before.
The best online brokerage accounts offer plenty of benefits that make investing easy, including investing resources and reasonable minimum account requirements.
I started managing my own money in a brokerage account almost 10 years ago. I closely analyzed almost a dozen of the most popular brokerage platforms available with an eye towards ease of use, educational tools, and low costs.
Best online stock brokers for beginners in May 2020
In the competition for customers, investment brokers are competing with one another fiercely. Choosing the best online broker for stock trading will really depend on what type of trading you plan to do. Some firms are more general in their investment approach. Others are niche-oriented, focused on options trading or more advanced investing. You can choose the broker that best matches your investment style. How about a tie between Charles Schwab and Fidelity? Though you will certainly need to have funds in your account to begin investing, you can open your account with no money at all, then make periodic additions until you have enough funds to begin investing. Since beginning investors will likely start out with small portfolios — maybe just a few hundred dollars — the last thing they need are trading fees eating into their accounts and their profits. But equally important, both platforms provide round-the-clock customer service. You can reach a live representative by phone or live chat, and if you prefer face-to-face, each company has an extensive network of local branch offices. Charles Schwab and Fidelity offer a wealth of trading tools and investment research to help beginning investors up their game and get the knowledge needed to become experienced investors. Still another benefit offered by both are managed portfolio options. Each platform offers its own robo-advisor option. Robo-advisors are online, automated investment platforms that provide full portfolio management at a very low fee. In fact, Charles Schwab charges no management fee at all on their robo-advisor, Charles Schwab Intelligent Portfolios.
Best online brokers for stock trading: 2020
It can help you build a solid investing foundation — functioning as a teacher, advisor and investment analyst — and serve as a lifelong portfolio co-pilot as your skills and strategy mature. But what was once a clunky, costly transaction conducted via landline telephones now takes place online in seconds, for a fraction of what full-service brokers used to charge for the service. Today, most investors place their trades through an online brokerage account. A little lost? Show Less. Interactive Brokers' IBKR Lite is a strong option for frequent traders: The broker offers international trade capabilities, no stock-trading commission and a quality trading platform. You Invest Trade is a clear-cut investment platform that is great for beginners looking to learn how to buy and sell investments.
