In this action-oriented comparison, we are going to provide a list of the best online stock brokerages for beginners. Believe me, as a beginner it may be overwhelming choosing the best online stock broker, but fret not. We did the research and narrowed down the best online brokerages for any investor, so you can start investing - today.
Our reviews focus on education, where these brokerages are motivated more than ever to help you make the best financial decisions. The best online stock broker will offer a slew of educational resources, user friendly interfaces (both website & mobile application), low transaction fees, and more.
Below is a quick glance into our selection of the best online stock brokerages for Beginners. Read along for in-depth analysis, where we highlight the ins-and-outs of each brokerage firm. Our analysis focuses on opening account balances, transparent fees, benefits and potential drawbacks.
Best Online Stock Brokerages - Start Investing Today
TD Ameritrade: Best for Beginners + Financial Education
Merrill Edge: Best for Bank of America Members + $0 Account Minimum
Vanguard Brokerage: Best for Long-Term Investors, Mutual Funds, Lowest – Expense Ratio
E – Trade: Best for Active Traders + Financial Education
Fidelity Investments: Best for Zero Expense Index Mutual Funds
Ally Invest: Cheapest Online Brokerage Firm
Betterment: Best for Passive Investors + Robo-Advisor
Charles Schwab: Best for Low fees
8 Best Online Stock Brokerages for Beginners
1. TD Ameritrade
As they self-describe, “Investing Built Around you,” TD Ameritrade is an award-winning online brokerage firm tailored for all investors. Regardless, if you are new investor or a seasoned trader, TD Ameritrade offers multiple investment products. With low-fees and a wide variety of investment tools, TD Ameritrade is ready to elevate your investing journey.
Sign - up Bonus: Get up to $600 (with qualifying deposits) when you open and fund an account today.
Account Minimum: $0
Associated Fees: Commission - Free Online Trades (no fee when you buy & Sell)
TD Ameritrade has numerous educational resources at your disposable. Want to tinker around with trading options? Or purchase ETF’s, then this online brokerage is for you. TD Ameritrade has the best trading platforms for both beginner and advanced traders. More importantly, TD Ameritrade is deeply committed to your success, and values customer interaction.
2. Merrill Edge
With a $0 minimum initial investment, Bank of America’s Merrill Edge is a great option for any investor. As a Merrill Edge member, you will have access to Financial Advisors, who are conveniently located at over 2,500 Bank of America regional locations. Enjoy the in-person advice as you begin to invest. Their team of advisors will ensure you make sound financial decisions. Merrill Edge employs a robust website and mobile application, which allows you track performance, execute trades, and digest daily investment research.
Sign - up Bonus: Get up to $600 (with qualifying deposits) when you open and fund an account. Get 300 $0 Online Stock & Option Trades for free.
Account Minimum: $0
Associated Fees: $2.95
Comparatively, Merrill Edge has relatively high associated fees. However, if you are a Bank of America member, then this is the best online stock broker for you. Bank of America, the parent company of Merrill Edge, has made it incredibly easy to manage both accounts. In fact, you can manage both accounts with just one single login. Take advantage of Merrill Edge’s cutting technology to learn more about investing, create financial goals, and explore investment opportunities.
Founded on May 1st, 1975, by Jack Bogle, Vanguard is a world-renowned brokerage firm that offers some of the lowest expense ratios and a healthy selection of index funds for you to invest in. After all, Vanguard prides themselves on offering some of the lowest fees in the investing industry. With 1,800 commission-free ETFs and over 140 no transaction fee mutual funds, Vanguard is the best online stock broker for long-term investors.
Sign - up bonus: Vanguard is not offering a promotion currently
Account Minimum: $0 for the most part; but mutual funds traditionally have a $1,000 minimum
Although, Vanguard’s platform lacks trading tools, they thrive in low-cost index investing. If you are a classic buy & hold investor, then Vanguard is the best bet. After all, the founder, Jack Bogle, pioneered index funds. Vanguard has the most diverse selection of index funds and renowned mutual funds. As you can, see Vanguard is one of the best online stock brokerages for beginners.
4. E - Trade
E-Trade has certainly carved out a niche amongst active traders, who utilize there advanced trading platform, educational resources, and research tools to craft a well-balanced, risk-averse portfolio. Investors alike would agree E-Trade is one of the best online stock brokers. Enjoy trading stocks, index funds, and options with a $0 commission. Regardless if you are an active trader or just starting, E-Trade provides well-rounded financial education content to help you make smart investment decisions.
Sign-up bonus: For a limited time, E-Trade will offer $100 for a deposit or transfer greater than $5,000.
Account minimum: $0
Associated fees: Enjoy Commission-Free on all Stock,
ETFs, and Options Trades
If you are looking to become more actively involved with your investment strategy, then E-Trade is a safe bet, as it is the best online stock broker for active traders. With E-Trade, you will be able trade commission-free, and will have direct access to a slew of technological and financial resources. Undeniably, E-Trade has carved out a niche amongst active traders and investors alike, rightfully so.
5. Fidelity Investments
Fidelity Investments certainly doesn’t shy away from low-fees and low-expense ratios. As an investor with Fidelity, you will enjoy commission-free trades for U.S. Stocks, ETFs, and option trades. Even better, when you open a brokerage account, Fidelity will automatically place your cash into a money market mutual fund. This neat feature allows your money to earn a higher-rate of return. Fidelity offers second-to-none market research. With 19 strategic partnerships, Fidelity is constantly intertwining cutting edge technology and market research to offer sound investment advice.
sign - up bonus: Fidelity is not offering a promotion currently
account minimum: $0
associated fees: Enjoy Commission-Free on all Stock,
ETFs, and Options Trades.
As you can see, Fidelity Investments meets the needs for both beginner and experienced investors. With their superior customer service, low-cost fees, low-cost expense ratios, and premium investment research, Fidelity has become a powerhouse online brokerage firm. Fidelity Investments is deeply committed to your success as an investor and is happy to answer any questions you may have. Fidelity Investments is the best for Zero Expense Index Mutual Funds.
6. Ally Invest
With a $0 account minimum, $9.95 per mutual fund trade, and commission-free stocks, ETFs, and option trades, Ally Invest is one of the cheapest options for investors. Even better, Ally Invest will assist you in vehicle financing & protection, dealing with mortgages, and if you are inclined, they will manage your investment portfolio for you.
sign - up bonus: 90 Days of Commission-Free Trades
& earn up to $3,500 in cash with a qualifying deposit.
account minimum: $0
Aside from the low-costs and available educational resources, Ally Invest is committed to leaving an everlasting social impact, which is great. Ally Invest is the best option for individuals who want a low-cost yet enriching investing experience.
As one of the newest online brokerages, Betterment continues to make a name for themselves as they help shape the digital financial service sector. Betterment is the best option for passive investors, who want to rely on robo-advisors to rebalance their portfolio. Fret not, Betterment employs a robust slew of tools to help you accomplish your investment goals, make sure to check them out once you open an account.
sign - up bonus: 1 Month – 12 Month for free (with qualifying deposits)
account minimum: $0 (However, $10 minimum deposit is required to open an account)
If you want a hands-off investment strategy, then Betterment is the best option for you. Easily set up automatic monthly investment deposits, and let Betterment take care of the rest. This online brokerage firm is clearly designed for passive investors, who want to increase their net-worth over the long-term.
8. Charles Schwab
Founded in 1971, by Charles R. Schwab, this brokerage firm has risen to be the 13th largest bank in the United States. With low-costs, advanced trading resources, and transparent fees, Charles Schwab is one of the best online brokers for any investors. Enjoy a large selection of no transaction-fee mutual funds, and commission-free stock, ETFs, and options trades.
sign - up bonus: No promotion is currently offered
account minimum: $0
As you can see, Charles Schwab is a great option for both beginner and advanced investors. With a robust selection of tools, platforms, and educational resources, this online brokerage is ready to help you make the best financial decisions. Paired with low-cost fees on stocks, ETFs, mutual funds, and option trades, Charles Schwab is one of the best online stock brokerages for beginners.
How to choose the best online stock brokerage?
As a new investor, it may seem daunting choosing one of the best online stock brokerages for beginners; however, it is not as tedious as it may seem. Here are a few questions for you to consider:
what is an online stock broker?
An online stock brokerage is a licensed firm, who buy and sell securities. For years, the only way to buy or sell a stock was from a licensed stockbroker who placed the trades on your behalf. Fortunately, we are in a new era, one that is dominated by the world wide web and digital transactions. What was once a costly and lengthy transaction period, can now be done in the fraction of a second due to online brokerage firms.
An online stock brokerage firm automates your investment strategy and allows you to place stock trades at any time. These online brokerages act as an intermediary between you and the global stock market. All that is required is for you to log-in to your account and place a trade.
Different type of investors
At first, this may seem like a long and convoluted process; however, it is actually quite simple. Although, there are numerous answers to this question, we will focus primarily on Active & Passive Investors.
Do you want to learn the ins-and-outs of active investing, which includes picking your own stocks and ETFs? Are you fine conducting your own market research and routinely checking-in with your active investments?
If you answered ‘yes’ to any of the above questions, then you are aligned with that of an active investor. This means you need an online brokerage that offers low-costs, in-depth and extensive research, helpful tools, and a platform that allows you to enter and exit investments with ease. Once you dial in on what investor you are, then select one of the brokerages we have listed.
Best online brokerages for active investors
If you want a hands-off, automated, and simple investment strategy then you are a passive investors. Passive investors enjoy automated investing and robo-advisors, who routinely re-balance their portfolios and pick their investments. Fortunately, majority (if not all) banks and brokerage firms have an automated feature for their members.
Best online stock brokers for passive investors
Comparing the best online stock brokerages for beginners
Our comprehensive review of the best online brokers focused on a few key aspects, which are crucial for each beginner investor to understand.
We value online brokerages that offer a $0 account minimum. Why? This allows any investor, beginner or experienced, to open an account and immediately begin to invest in the stock market.
Majority of new investors believe Banks, and Brokerages charge high-fees and commissions. While some do, we narrowed down the brokerages that offer the most competitive and affordable fees. In fact, almost all of them allow you to buy and sell stocks, ETFs, and trade options for free. However, as a new investor, you need to recognize and discern between some common fees that exist within the industry:
Advisory Fees – This fee only applies if you elect to have your money managed by a licensed professional. Though this fee may vary between brokerages, it is generally expense; however, if you want a little more handholding then this is certainly not a bad idea. This is traditionally charged as a set percentage.
Transaction (commissions) Fees – Today, majority of online brokerages do not charge you a commission (small fee) for buying or selling an individual stock, ETF, or Option Trade. However, some firms will still charge a transaction fee for buying or selling a mutual fund.
Example: Ally Invest charges a $9.95 fee when you buy or sell a mutual fund.
Annual Account Fee – While not common, some online brokerages still charge an annual fee for operating an active account.
Monthly Maintenance Fees – This is a recurring monthly fee for ‘having an account.’ for Online brokerage firms across this industry have shied away from this fee. However, as you choose the best online brokerage account, it is still important to know what it is and ask if the brokerage account employs one.
Variety of Investments
Make sure to pick a brokerage account that offers a robust set of investments. You want to ensure your brokerage account allows you to trade stocks, ETFs, mutual funds, bonds, index funds, and options.
Available investor tools & educational resources
Majority of the best online stock brokerage firms will allow you to open a Roth IRA, manage trust funds, provide extensive market research, and offer educational services to help you plan for retirement and generate a monthly financial budget. As a new investor, it is paramount you find a brokerage account that focuses on education, so you can routinely make the best financial decisions.
What documents do you need to open an online stock brokerage account?
Fortunately, it has never been easier to open up an online
brokerage account. Today, you can open an account on your mobile device or on the
brokerage’s website. However, there are a few key documents you will need handy:
Summary: Best online stock brokerages for beginners
As a new investor, it may seem daunting leaping into the realm of investing and the stock market; however, we are confident you have the tools and resources you need to succeed and hopefully, make money. Remember, you want a brokerage account that emphasizes education, customer service, low-fees, and one that prioritizes your needs.