Stocks, bonds, mutual funds, IPOs: What a dizzying array of confusing possibilities, right? The sheer diversity of so many options leads me to completely sympathize with people who are too intimidated to invest.
Best Online Stock Brokers for Beginners:
- Best for Futures: E*TRADE
- Best Mobile Platform: TD Ameritrade
- Best for Education: Firstrade
- Best Comprehensive Platform: TradeStation
- Best for Fast Account Opening: You Invest by J.P. Morgan
I firmly believe that self-education is key to gaining confidence—just like with anything else. If you seek knowledge, if you take an active role in your own finances and manage as much as you possibly can on your own (instead of passively letting an investment professional do everything for you) you should give yourself a pat on the back.
If you want to learn, your possibilities are literally limitless.
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Choosing an Online Stock Broker
Before you even get into the nitty-gritty of choosing the stocks, bonds or mutual funds (or Forex or ETFs) that will work best for your portfolio, you’re going to need to choose a broker.
These days, an online brokerage firm is a way most people choose to go—it’s quick, it’s easy, there are a whole bunch of techy educational options at your fingertips, and often, this is the cheapest way to build your portfolio.
What is Your Investing Strategy?
What are your goals? Without goals, how do you know what your plan is and what type of investment to dive into? Different brokers offer different products, and your ultimate goals should end up guiding the products you end up choosing in the end.
What do you want your money to do for you? Do you want to build up a secure retirement? Save some money for a vacation to Japan? Save money for your kids’ college education? Make sure you have enough for an addition for your home? All of the above?
I would really recommend writing down your goals because those will be what fuels your drive and inner fire. And if you do have some money socked away for something really fun, like for real, a trip to Japan, boy, won’t it be exciting to watch that grow?
Rewarding yourself with something tangible at the end of all that hard work is so incredibly, incredibly amazing. It also makes you want to invest more, and more, and more, because finally, you can see what all the fuss is about. Here are some quick tips on choosing an online broker:
- Full-service brokers (not a discount broker) are sometimes a good thing for brand new investors. If you want to go with a discount broker right off the bat, go for it! Beware, you will pay more with a full-service broker. Note: this is just a suggestion. However, once you do become a savvy investor, it’s a possibility to then spend more time looking into discount brokerages.
- Do your research on the broker. What do other people say about it in forums? Have they had problems with the broker’s platforms? Frustrations with customer service? Take that to heart, and maybe even a grain of salt. Oftentimes, these online brokers serve millions of customers. If there are fifty complaints and that’s it, well, in the grand scheme of things, that’s not so bad.
- Check on commissions and minimums. Those will sometimes really eat away at your money—sometimes before you even start investing!
- Are there some promotions going on with certain brokerage firms? 200 free trades if you invest a certain amount of money? A cash bonus? Something along those lines? Obviously, that should not be the be-all, end-all for your decision, but if you qualify, that could be a very good thing.
- Different brokers offer diverse products. Along with all of the different online brokers out there, they also all offer different products, which can add to the confusion. Again, read definitions of all investment vehicles out there, read the broker’s website, do your homework!
And, we’re here for you if you need some more help setting up a brokerage account.
Best Online Stock Brokers for Beginners
E*TRADE has the tools and platforms to help beginners invest like professionals.
You will be connected on all platforms as E*TRADE also has an excellent mobile app, and you can count on their customer service to always be there when you need it.
E*TRADE gives you access to courses and other educational materials that can really bring you up to speed and help you learn quickly.
This is crucial if you really want to gain the knowledge quickly. Having your brokerage account with access to learning materials all in one place can really help you make smarter investment decisions.
2. TD Ameritrade
Another best overall happens to be TD Ameritrade for its beginner-friendly platforms. I mean, TD Ameritrade’s IT people are geniuses. TD Ameritrade has two amazing platforms that’ll make it easy for beginners to start trading:
- Trade Architect
In addition to that, their website is an amazing platform as well, which allows you to have a range of tools at your disposal. Beginner-friendly, too! TD has made Benzinga’s list for best overall brokerage.
3. Best for Experienced Traders: Firstrade
Firstrade is a solid choice amongst the dizzying array of brokerages in the market; all fees are set to mirror (or beat) robo-advisor pricing. In fact, Firstrade offers free trades on most of what it offers.
You can monitor your portfolio’s performance easily with the Firstrade mobile trading app, which offers a more dexterous option compared to a desktop. You’ll be exposed to a touch ID screen for iOS devices, equity ratings and fundamental data, advanced charts, comprehensive dashboard and improved research and trading interface.
Since the advent of Firstrade’s fairly recent Navigator, it’s possible to manage your account, place orders, get market updates and do research, all almost simultaneously. The single screen allows traders to immediately intuitively grasp Firstrade Navigator’s account dashboard. Take note, however, that a lot of the options available on Navigator are geared toward active traders.
4. Best Comprehensive Platform: TradeStation
TradeStation offers 2 distinct account types: its basic TS GO account aimed at new trades and its more in-depth TS Select account aimed at more advanced traders looking for a comprehensive set of tools and research options. There’s no minimum account balance required to open a TS GO account. TS Select accounts require a $2,000 minimum deposit.
Signing up for an account with TradeStation is intuitive and simple. You’ll begin by choosing the type of account you want, entering a little personal information, answering a few questions about your experience level and agreeing to the company’s terms of service. A TradeStation representative will review your application and open your account. As soon as your account is open you can begin funding your account and making trades.
One area where TradeStation excels is in education. Though it was originally aimed at professional investors, TradeStation now offers a wealth of education options that brand new traders can understand and use.
5. Best for Fast Account Opening: You Invest by J.P. Morgan
If you’re already a customer with Chase Bank, Chase You Invest by J.P. Morgan is a no-brainer. You can easily research, trade and manage your investments from your mobile device. You Invest provides online tools to search for investments, track companies and rollover your assets.
Only U.S. clients are able to open a You Invest account but it takes, on average, just a day to open and you’re able to apply fully online. Equipped with portfolio reports and pie charts, the mobile app is simple and user-friendly. The app is available for both iOS and Android devices.
With Chase You Invest you’ll have access to roughly 5,000 stock exchanges. There are plenty of research and educational tools provided on the app. Overall, we recommend the Chase You Invest platform for stock trading because it’s easy to open and fund an account. It’s also reliable thanks to its strong parent company, J.P. Morgan.
Honorable Mentions for Online Stock Brokers
I like Fidelity and Ally Invest for low fees. Check out a side-by-side comparison of both:
|Stocks and ETFs||$4.95 per trade|
|Stocks and ETFs, broker assisted||$29.95 per trade|
|Options||$4.95 per trade + $0.65 per contract|
|Mutual funds||$49.95 ($75 for some)|
|Fidelity family funds||Commission free|
|Bonds and primary market CDs||On a net-yield basis|
|Bonds (maturing in one year)||$1 per bond ($250 max; $50 max if maturing in one year)|
|Commercial Paper||$50 per transaction|
Minimum Deposit for Fidelity:
Stocks, bonds, mutual funds, options, commercial paper, UITs, ETFs: The minimum deposit to open an account is $2,500, though it’s $0 for a rollover IRA. $2,500 (or $200 per month) for Roth or Traditional IRA.
2. Ally Invest
|Stocks and ETFs||$4.95 per trade|
|Options||$4.95 per trade + $0.65 per contract|
|Bonds||$1 per bond with $10 minimum, $250 maximum|
Minimum Deposit for Ally Invest:
$0 for cash account, $2,000 for a margin account.
Next Steps – Opening an Account
Now, actually opening an account is kind of fun. Some online brokers allow new clients to open an account without an initial cash deposit. Opening a few accounts with these companies will allow you to choose the one or two you like the most.
That way, you can make a more educated decision about where to invest your money. (However, many brokers do charge an IRA closing fee, so that can set you back if you do open accounts at more than one location.) Again, it’s all about doing your homework.
Final Thoughts on Choosing an Online Broker
Just remember, investing doesn’t have to be confusing and difficult, and also, nobody was born knowing everything about investing. Even Warren Buffett had to learn and teach himself along the way.
Also, ultimately, don’t spend tons of time agonizing over the merits of TD Ameritrade vs. Charles Schwab. The most important thing is that you’re actually investing and making your money work for you. That’s really something to celebrate.