Don’t own any securities like stocks or bonds? Expect a much harder time saving for retirement — or building wealth at all.
Over time, stocks return around 10% per year on average. Left in cash, your money loses about 3% of value per year on average to inflation.
Whether you’re a student with under $1,000 to your name or a working adult who simply hasn’t taken the plunge to open a brokerage account and start investing, there’s no better time than the present to start catching up.
Best Online Stock Brokers and Trading Platforms for Beginners
These are the best brokerage platforms for newer investors and traders. Each does at least one thing really well, whether it’s keeping fees super-low or offering lots of in-depth trader education.
Our top overall pick represents the best value for the greatest number of users, in our opinion. Here’s what you need to know about each.
Best Overall: Charles Schwab
I use Charles Schwab as my primary broker. There’s very little to dislike about it.
Schwab pioneered the trend of eliminating commissions. Many other online brokers reluctantly followed suit, but Schwab was the first to stop charging clients a fee every time they bought or sold a security. They’re still trading on that good will, deservedly so.
Another big selling point of Schwab is its comprehensiveness. It offers every tax-advantaged account type you could ask for, including IRAs, Roth IRAs, ESAs, and HSAs. Likewise, it offers every type of security as well, including options trading, futures trading, and thousands of mutual funds with no commission or load fee.
Finally, I particularly like the robo-advisor, which is free if you invest the account minimum of $5,000. It utilizes Schwab’s own index funds, which come with extremely low expense ratios and provide broad exposure to the stock market at large.
Additional features:
- $0 minimum to open and maintain your account
- No robo-advisor fee, but the robo-advisor does require a $5,000 minimum investment
- Get hybrid advisor services (human advisor plus robo-advisor) for $30 per month plus a one-time $300 setup fee
- No account opening fee for common accounts like taxable brokerage accounts and IRAs
- For active traders, Schwab offers free trading software called StreetSmart Edge
- Detailed stock and fund research tools with no subscription required
Open an Account With Charles Schwab
Best Free Robo-Advisor: SoFi Invest
As a Silicon Valley disruptor, SoFi Invest does business a little differently. The online brokerage charges no commissions or annual fees and offers value-added services like free career counseling. I particularly love that SoFi Invest offers its robo-advisor service for free with a minimum deposit of only $5.
SoFi also offers access to human investment advisors with the robo-advisor — typically a costly premium feature. That makes SoFi Invest unique, even among the best robo-advisors on the market. I don’t know of any other robo-advisors that offer investment advice from a live human free as part of their robo-advisor service.
SoFi’s biggest downside: It doesn’t offer some staple financial products like bonds and mutual funds, which leaves it unfeasible for many investors, particularly older and more traditionally-minded investors.
Additional features:
- You can buy fractional stock shares with SoFi, meaning you can purchase portions of shares if the price of a single share is more than you can afford
- Multiple cryptocurrencies available directly from the brokerage, rather than a potentially risky crypto exchange (another unusual, valuable feature)
- $5 minimum to open an account
Read our SoFi Invest review for more details.
Open an Account With SoFi Invest
Best for Day Traders: TD Ameritrade
TD Ameritrade makes for a solid competitor to Schwab, with a similarly well-rounded platform. Perhaps not coincidentally, it won’t be around forever; Schwab is in the process of acquiring TD Ameritrade, and at some point, the brokerage will cease to exist as a distinct brand.
For now, TD Ameritrade stands out for its renowned stock trading tools. Thanks in part to its thinkorswim trading platform, it ranks among the best trading brokerages for active traders and pattern day traders. Its capabilities go well beyond buy-and-hold stock and ETF trades.
Oh, and its mobile trading platform is best-in-class.
Additional features:
- Wide variety of tax-advantaged account types, including IRAs and ESAs
- Trade stocks, bonds, exchange-traded funds (ETFs), mutual funds, and futures with low or no commissions
- Get access to more than 4,100 mutual funds with no transaction fee
- Enjoy 24/7 customer support by phone, email, text message, and Facebook messenger
- No account minimums
See our TD Ameritrade review for more details, and keep an eye on TD Ameritrade’s new-account sign-up promotions, which often offer substantial perks
Open an Account With TD Ameritrade
Best for Low Fees for ETFs: Fidelity
Like all the best online brokerages, Fidelity doesn’t charge commissions. But that’s only the beginning of how they save investors money.
Fidelity particularly shines in offering several ETFs with no expense ratios at all. Even the most evangelical index fund advocate brokers like Schwab and Vanguard can’t claim the same. You can easily build a simple but well-diversified portfolio at Fidelity without paying a dime to manage it.
And Fidelity aims for similar affordability with mutual funds, offering over 3,700 with no transaction fees.
Additional features:
- No account minimums
- No commissions on self-directed trades
- Robo-advisor is free for balances under $10,000, then $3 per month from $10,000 to $50,000 and 0.35% annualized above $50,000
- Strong educational resources for novice investors
For more detail, read how Fidelity compares to Robinhood (more on them shortly).
Best for High-Net-Worth Investors: Merrill Edge
Bank of America bought brokerage and investment banking firm Merrill Lynch in 2008, at the height of the global financial crisis. Since then, it has reoriented the acquired company toward high(er)-net-worth investors and rebranded it Merrill Edge.
Merrill Edge really shines for its high-touch approach with customers who can bring $500,000 or more to the table. If you’re a cautious sort who has built a nice nest egg through traditional savings, but are finally ready to dip your toe into equity markets, Merrill Edge is for you.
Merrill Edge is great for well-capitalized active traders as well thanks to a robust research and trading platform that rivals TD Ameritrade’s. And socially conscious Merrill Edge investors appreciate the Idea Builder tool, which can help them find appealing assets such as environmental, social, and governance (ESG) investments.
Just don’t expect some of the more advanced, “disruptive” bells and whistles such as cryptocurrencies or fractional share investing. Which is fine for the type of investor Merrill Edge seems content to serve.
Additional features:
- No minimum to open an account
- Seamless integration between Bank of America’s deposit accounts and Merrill Edge’s investment accounts
- Extensive education resources for beginners, including a podcast, videos, webinars, free tools such as calculators, and virtual live events
- No trading commissions
Open an Account With Merrill Edge
Best for Trading on the Go: Robinhood
Robinhood’s mobile app is so easy to use that some lawmakers have accused it of “gamifying” day trading and investing. They could have a point — Robinhood has the cleanest, most user-friendly mobile interface of any online brokerage, period, which makes it ideal for newbies.
The brokerage offers commission-free stocks, ETFs, and options. I particularly love that Robinhood offers fractional stock investing. But where Robinhood sets itself apart is in offering cryptocurrencies — I even opened a brokerage account with Robinhood specifically for cryptocurrency speculating. That said, rival SoFi Invest has overtaken Robinhood in the number of coins available.
Robinhood’s securities end there however. It doesn’t offer mutual funds or bonds, taking them off the table for many investors. Neither does Robinhood offer any other types of accounts beyond taxable brokerage accounts — no retirement or education savings accounts and no robo-advisor service. So it’s more appropriate as a “side account” for risk-tolerant DIY investors.
Additional features:
- No minimum to open an account
- No trading commissions
- Buy higher-priced stocks via fractional share investing
See our Robinhood review for more details, and keep an eye out for Robinhood’s new-account sign-up bonus offers.
Open an Account With Robinhood
Best All-in-One Personal Finance App: Acorns
If you want to completely automate both your savings and your investments in one swoop, check out Acorns. It creates a checking account for you and gives you a debit card. When you make purchases, it rounds up the cost to the next dollar and transfers the difference to your brokerage account or IRA. By automating your savings, it helps you boost your savings rate to set aside money faster.
Then the Acorns robo-advisor steps in to invest that money automatically for you based on the investing strategy you select. While it doesn’t offer many options, those options are easy to understand and work for most investors. Acorns has expanded its options over the past few years too, and now offers UGMAs and UTMAs for college savings, along with ESG investment options.
Keep in mind that Acorns does one thing well, and one thing only: automation. If you want any control over what you invest in, or you want an account other than a brokerage account or IRA, look elsewhere.
Additional features:
- No minimum to open an account
- Pay no more than $5 per month for all features and capabilities, regardless of account balance
- Enjoy a limited lineup of tax-advantaged savings options for adults and kids
For more information, read our Acorns review.
Best for Financial Coaching: Ellevest
Ellevest is a robo-advisor built specifically for women. It creates your investment plan based on your personal finance goals and manages them over time based on your investor profile. It doesn’t offer a traditional brokerage where you invest manually, though it does offer retirement accounts with higher-priced memberships. Unusually for a low-cost robo-advisor, its investing portfolios include both stocks and bonds.
Ellevest takes women’s unique financial needs — longer life expectancy and higher likelihood of career interruption than men, for example —into account with its financial recommendations.
But where Ellevest really shines for beginner investors is in its coaching sessions. Members and non-members can also purchase one-on-one sessions with financial advisors and executive coaches to get more specific advice. Higher membership levels come with higher discounts off the retail price.
Additional features:
- Plans start at $5 per month
- Get a 10% discount when you pay annually in advance
- Take advantage of private wealth management as your net worth grows
- Enjoy extensive investing and financial education modules for newer investors, all free
- No minimum to open an account
Methodology: How We Choose the Best Trading and Investing Platforms for Beginners
We use several factors to assess online brokerages and trading platforms. For each, we consider how it affects the overall user experience — in this case, for less experienced investors in particular.
Investing Style (Managed or DIY Investments)
This is an important distinction for beginners. Some novices want nothing to do with stock-picking, while others absolutely live for it.
The best online stock brokers let you choose. They offer managed investments — robo-advisor accounts — and self-directed trading accounts as well.
Fees, Expenses, and Commissions
The cheaper, the better. While no online stock broker is totally free — thanks, regulatory fees — the best don’t charge trading commissions and have low or nonexistent management fees for robo-advisor accounts.
Assets Available
For self-directed investment accounts, we prefer platforms with a wide range of available assets, including but not limited to:
- Exchange-traded stocks
- OTC stocks
- Bonds
- Exchange-traded funds (ETFs)
- Mutual funds
- Options
- Cryptocurrencies
- Forex
It’s not a dealbreaker if a brokerage doesn’t have all these asset types. Forex and options, in particular, are not suitable for beginner investors. But if you’re looking for a brokerage that you can grow with, you’ll want them on hand when the time comes.
Educational Resources for Beginner Investors
Investor education is important at any skill level, but especially for beginners. We look for investing platforms that go heavy on the educational materials, with videos, webinars, articles, and more for people who don’t quite yet know their way around the markets.
Research and Analysis Tools
It’s also critically important for DIY investors to have professional-grade research and analysis tools at their disposal, such as:
- Stock screeners with advanced filters
- Advanced stock charting tools
- Backtesting tools to assess how investment ideas would perform in historical markets
- Professional research reports from outfits like Morningstar and S&P
- Market news from wire services and reputable publications like Bloomberg
- Stock watchlists
Some basic brokerages seem not to agree, unfortunately. Those that go the extra mile do better in our analysis.
Customer Support
Not all brokerages have 24/7 support, and we don’t hold that against them. We do prefer brokerages that have long customer support hours, though — not just during market open hours and a bit on either side.
Likewise, we like brokerages that offer multiple ways to get in touch, including live chat, phone, email, and support tickets. And we look for brokerages with robust self-help databases (knowledge bases) that make it easy for people with basic questions to find answers without waiting for a live person.
Usability and Mobile Functionality
The best online stock brokers are mobile-friendly, if not mobile-first. You should be able to place complex trading orders, review your entire portfolio at a glance, and do market research from your phone. Brokers with poor mobile experiences do poorly in our rankings.
Online Stock Broker FAQs
Still have questions about using online stock brokers and trading platforms to buy and sell equities? You’re not alone. This is a complicated world dominated by professional traders, and you need to take every chance to give yourself an edge.
Why Should You Start Investing Now?
Forget what the market does from day to day. Time is your friend, thanks to the miracle of compound interest.
The younger you start investing, the more you can lean on compounding to do the heavy lifting for you.
To reach $1 million in 10 years, it takes $5,467 invested per month at an 8% return. But to reach $1 million in 40 years, it takes only $287 per month.
That’s a dollar difference of roughly 20x yet a time difference of only 4x. In other words, the sooner you start, the easier it’ll be for you to build wealth.
Should You Open an IRA or Taxable Brokerage Account?
Start with a traditional IRA or Roth IRA if you don’t currently have a retirement plan. You might as well save some money on taxes while you’re saving money.
If you’re able to max out your IRA contributions each year, open a taxable brokerage account. This is a good place to put the excess funds that don’t sit in your savings account, earning less than the inflation rate. Sure, you’ll pay taxes on dividends and gains, but you’ll still come out ahead in the long run.
What’s the Best Online Brokerage for Beginners?
If you’re new to stock investing, start with a robo-advisor. You have several strong free and low-cost options to choose from and can start investing with little knowledge or skill.
Why use a robo-advisor? Because it does the hard work for you — hence “robo.” It leaves you free to invest your most valuable asset — your free time — elsewhere rather than learning how to pick stocks or set an ideal asset allocation.
How Much Does an Online Stock Broker Cost?
Ideally, nothing. Commission-free trading platforms are increasingly common these days, so if DIY investing is your thing, you shouldn’t have to pay trading commissions at all.
Most robo-advisors do still charge a small percentage of assets under management (AUM), typically under 0.50% per year. That’s still less than the average human financial advisor (1% or more AUM). But you can find commission-free robo-advisors if you know where to look; Ally Invest is one of our favorites.
Is Your Money Safe in a Brokerage Account?
Sort of. The Securities Investor Protection Corporation (SIPC) covers cash and securities balances up to $500,000 (up to $250,000 for cash only) in your brokerage account. But this coverage only kicks in if the brokerage fails — it doesn’t protect you from market losses.
How to Select Your First Online Stock Investing Account
So, you’re ready to open your first online investment account. This is a big step.
Before you move ahead, take “stock” of your situation and consider your priorities as an investor. You want a platform that supports you as you grow more confident and aligns with your risk tolerance and investing style.
Pay close attention to:
- Educational Tools. As a beginner, you want a platform that eases you into the market and helps you grow at your own pace
- Research and Analysis Tools. If you’re a DIYer, you’ll want access to professional reports, stock screeners, market charts, and other tools to help in your market research and technical analysis. Bonus points for advanced capabilities like Level II market data.
- Fees and Expenses. No brokerage is 100% free, even those that don’t charge trading commissions. Pay close attention to management fees, fund expenses, and the like.
- Investing Style. Set-it-and-forget-it managed investments? DIY stock-picking? Both? Choose a platform that embraces your investing style.
Other factors could weigh on your decision too, like the availability of alternative assets like crypto and options. Fortunately, there’s no law against having more than one brokerage account. Consider yourself free to A/B test your way to investing success.
