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Best Online Stock Brokers for Beginners for March 2024

Review Updated
Matt Frankel, CFP®
By: Matt Frankel, CFP® Our Brokerages Expert
Nathan Alderman
Check IconFact Checked Nathan Alderman
Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
We believe investing is the best wealth-building tool out there, and we're so glad you're taking the first step to get started. On this page, you'll find our top picks of the best trading platforms for beginner investors.Wondering how to compare brokers? Here are a few things we keep an eye out for:
  • Some stock brokers charge high fees. Always check the fine print, and look for brokerages with low fees and minimums.
  • It can be helpful to open a brokerage account with a stock broker that offers a wide variety of funds to choose from.
  • Many of the best brokerages offer educational resources -- if you're interested in those, double-check to make sure a broker offers them before opening a brokerage account.
These three elements can help start your investing journey out on the right foot!There are a lot of options to compare, even on this page. It can be overwhelming! If you're looking for a place to start, here are three online stock brokers our experts recommend for beginners and why they like them:

Our nine best trading platforms for beginners

Broker/Advisor Best For Commissions Next Steps
Award Icon 2024 Award Winner
Best For: Best for mobile investing Commission: $0 for stocks, ETFs, and options
Award Icon 2024 Award Winner
Best For: Best for membership ecosystem Commission: $0 for stocks, $0 for options contracts
Award Icon 2024 Award Winner
Best For: Best for DIY investors Commission: $0 commission for online U.S. stock and ETF trades; trade fractional shares for as little as $1
Best For: Best for mobile platform Commission: Commission-free; other fees apply
Award Icon 2024 Award Winner
Best For: Best for app-based investing and banking Commission: $0 per trade
Best For: Best for managing finances under one roof Commission: $0 for online stock and ETF trades
Award Icon 2024 Award Winner
Best For: Best for retirement investors Commission: $0 stock, ETF, and Schwab Mutual Fund OneSource® trades
Best For: Best for rounding up spare change to invest Commission: $3-$9 monthly
Award Icon 2024 Award Winner
Best For: Best for low-cost index investing Commission: $0 online; $25 broker-assisted fee for some phone trades of stocks and ETFs from other companies (Less than $1 million)

Brokerage methodology

Why you can trust us:Brokerage products are rated on a scale of one to five stars, primarily focusing on fees, ease of use, and quality of the trading platform and research offerings. When searching for the best place to buy stocks for beginners, we generally keep an eye out for:
Robinhood
Open Account for Robinhood

On Robinhood's Secure Website.

Ratings Methodology
Award Icon 2024 Award Winner
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
Simple-to-use investing experience and commission-free trading make Robinhood one of the best stock brokers for beginner investors, and Robinhood delivers on all these fronts, and more.
Fees:
$0 for stocks, ETFs, and options
Account Minimum:
$0
Special Offer Customers can earn up to 3% extra on their retirement contributions with Robinhood Gold.
Open Account for Robinhood

On Robinhood's Secure Website.

Award Icon 2024 Award Winner
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
A clear standout with a modern experience. Beginners and long-term investors may find the most value, particularly those interested in stocks and ETFs, and in buying fractional shares.
Fees:
$0 for stocks, $0 for options contracts
Account Minimum:
$0
Special Offer Circle with letter I in it. For new accounts: Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. Get up to $1,000 in stock when you fund a new Active Invest account.
Open Account for SoFi Active Investing

On SoFi Active Investing's Secure Website.

Award Icon 2024 Award Winner
Our Rating:
Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
Fidelity is one of the largest and one of the most well-rounded brokerages available in the U.S. today. Importantly, Fidelity offers $0 commissions for online stock and ETF trades, plus a high-quality mobile app, making it one of the best brokerage accounts for beginners and seasoned investors alike.
Fees:
$0 commission for online U.S. stock and ETF trades; trade fractional shares for as little as $1
Account Minimum:
$0
Open Account for Fidelity

On Fidelity's Secure Website.

Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
E*TRADE manages to cater to active traders with one of the best stock trading platforms for beginners, while also appealing to long-term investors with thousands of mutual funds and ETFs that can be traded commission-free.
Fees:
Commission-free; other fees apply
Account Minimum:
$0
Special Offer Circle with letter I in it. Open a new eligible E*TRADE brokerage account, fund your account within 60 days of opening, and earn a cash bonus of up to $1,000, depending on the size of your deposit. Offer good for one use per customer, on a single account. Open and fund and get up to $1,000
Open Account for E*TRADE

On E*TRADE's Secure Website.

Award Icon 2024 Award Winner
Our Rating:
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
J.P. Morgan stands out for beginners by offering an app-based platform for both self-directed and automated investing, all with $0 commissions -- even on mutual funds, which is pretty rare. Plus, if you bank with Chase your accounts will be integrated so you can manage your money in one place.
Fees:
$0 per trade
Account Minimum:
$0
Special Offer Earn a bonus up to $700 when you open and fund a J.P. Morgan Self-Directed Investing account (retirement or general) with qualifying new money by 04/12/2024.
Open Account for J.P. Morgan Self-Directed Investing

On J.P. Morgan Self-Directed Investing's Secure Website.

Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
Merrill Edge® Self-Directed offers easily one of the biggest cash bonuses we’ve seen. It’s a standout brokerage with $0 online stock and ETF trades, strong research offerings, and excellent customer support. Owned by Bank of America, you can also get access to its lucrative Preferred Rewards program -- the gold standard for banking perks with fantastic rewards and discounts.
Fees:
$0 for online stock and ETF trades
Account Minimum:
$0
Award Icon 2024 Award Winner
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
Charles Schwab has aggressively slashed fees on its mutual funds and ETFs, eliminated common account fees, and lowered its base commissions to $0 per trade, making it one of the least-expensive brokers.
Fees:
$0 stock, ETF, and Schwab Mutual Fund OneSource® trades
Account Minimum:
$0
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
Low-cost and no-frills, Acorns is consistently held among the best stock trading platforms for beginners. Acorns is particularly well-suited for beginners as it invests your spare change in an automated way. The low hurdle to start investing, and the ability to easily manage your finances under one roof, are key reasons why this platform is worth considering.
Fees:
$3-$9 monthly
Account Minimum:
$0
Open Account for Acorns

On Acorns' Secure Website.

Award Icon 2024 Award Winner
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
Vanguard is one of the leading options for hands-off, low-cost index investing. Vanguard offers some of the lowest cost index ETFs, plus it packs in a well-rounded feature set that is a fit for more experienced investors as well.
Fees:
$0 online; $25 broker-assisted fee for some phone trades of stocks and ETFs from other companies (Less than $1 million)
Account Minimum:
$0
Editor's Note: TD Ameritrade is transitioning to Charles Schwab
TD Ameritrade has been acquired by Charles Schwab, and the company expects all accounts to be transitioned by the end of 2024. We've removed TD Ameritrade from our best-of lists to align with this development. Here at The Ascent, you can trust that we're constantly evaluating our top broker picks to bring you current recommendations.

How to choose the best trading platform for beginners

We know everyone's financial circumstances and goals are different, so we've compiled a list of the best stock brokers for beginners to help you find one that meets your needs. Here's a review of our picks for the best online brokerages for beginners.

SoFi Active Investing

Best broker for beginners who: Want an all-in-one financial services platform that also offers an easy-to-use brokerage.

SoFi is more than just a brokerage. It is an all-in-one bank alternative, with checking and savings accounts, loans, credit cards, and more. It offers both a self-directed brokerage platform as well as a robo-advisor and can be a great fit for beginning investors who want to keep their finances in one place.

Why beginners love SoFi Active Investing

  • User-friendly platform: SoFi's trading platform is extremely easy to use, both in the web-based and app-based formats.
  • Fractional share investing: Fractional shares let beginning investors create a diverse portfolio of stocks even if they have limited capital. With fractional shares, you can buy less than one share of each stock you like and can therefore put all of your money to work in the stocks you love.
  • IPO investing: SoFi is one of the few brokers that allows investors (even those with small accounts) to participate in initial public offerings, or IPOs.

Why some people don't choose SoFi Active Investing

  • No mutual funds: SoFi doesn't offer the ability to invest in mutual funds. For many investors, this won't be a big deal, but if you'd like to incorporate mutual funds into your portfolio, you can't do it with SoFi yet.
  • Few investor resources: SoFi has a solid library of educational resources, but is lacking when it comes to access to stock research reports, advanced trading tools, charting tools, and other features investors might find valuable.

Read our full review of SoFi Active Investing.

Fidelity

Best brokerage for beginners who: Want a top-notch mobile app, fractional shares, plus all of the features of a full-service brokerage.

Fidelity is one of the oldest and most respected names in the brokerage industry, but it has evolved to become one of the most beginner-friendly brokers in the industry. It combines some of the features beginners love, such as fractional share investing, with the resources and tools that you'd expect from a full-service brokerage.

Why beginners love Fidelity

  • User-friendly app: Fidelity has an excellent app that allows customers to trade on the go, and it's easy to use and comes with tons of valuable features.
  • Customer service: Fidelity has excellent support over the phone, but it also has physical branch locations throughout the United States.
  • Fractional share investing: Fidelity allows investors to buy a minimum of just $1 worth of stocks and ETFs, allowing investors to create a diverse portfolio without a ton of capital.

Why some people don't choose Fidelity

  • Options fees: Beginners should learn quite a bit before they trade options, but it's worth noting that Fidelity has option trading fees while some of the other beginner-friendly brokers don't.

Read our full review of Fidelity.

Robinhood

Best broker for beginners who: Want an easy-to-use trading platform with minimal fees.

Robinhood is best known for pioneering the zero-commission stock trades that have become standard practice throughout the brokerage industry. One of the most user-friendly stock trading platforms, Robinhood could be a great fit for beginners who want to get started quickly and easily.

Why beginners love Robinhood

  • Easy-to-use app: Robinhood offers an extremely user-friendly app-based trading platform that makes it easy to buy and sell stocks.
  • Fractional shares investing: Fractional shares let beginning investors create a diverse portfolio of stocks without a ton of capital. With fractional shares, you can put all of your money to work in the stocks you love, regardless of how much the cost of one share is.
  • Stocks, options, and crypto: Robinhood is one of the few places where you can trade stocks, options, and cryptocurrencies such as Bitcoin in the same place.

Why some people don't choose Robinhood

  • Some investment types unavailable: One of the biggest drawbacks is that Robinhood doesn't offer mutual funds, nor does it offer fixed-income investments like bonds on its platform.
  • Light on resources: Some of the other beginner-friendly brokerages have extensive educational resources and third-party stock research. Robinhood has some educational tools, and the only available stock research requires a paid subscription.

Read our full review of Robinhood.

J.P. Morgan Self-Directed Investing

Best brokerage for beginners who: Want a low-fee platform offered by one of the largest financial institutions in the world.

J.P. Morgan is known for its wealth management services to high-net-worth individuals, but it also offers a brokerage platform that could be a great fit for beginning investors. It could be an especially good choice for Chase banking customers, as they can manage their finances and investments in the same app.

Why beginners love J.P. Morgan Self-Directed Investing

  • No commissions: Not only does J.P. Morgan offer $0 commission trades for stocks, options, and ETFs, it's one of the only brokers that has no mutual fund commissions whatsoever.
  • Great app: The Chase banking app is one of the most user-friendly and functional financial apps in the market, and its brokerage platform is easy to navigate on the go.
  • Stock research: J.P. Morgan is one of the few app-based investment platforms that provides professional stock research reports on over 1,200 U.S. companies.

Why some people don't choose J.P. Morgan Self-Directed Investing

  • Trading tools: J.P. Morgan Self-Directed Investing is designed to be a rather simplistic, easy-to-navigate trading platform. It has a highly rated app, but doesn't have advanced trading tools that active investors often use.
  • Fractional shares: J.P. Morgan Self-Directed Investing doesn't allow users to buy fractional shares. So, if a stock trades for $100 per share, that's how much you'll need if you want to invest in it.

Read our full review of J.P. Morgan Self-Directed Investing.

E*TRADE

Best broker for beginners who: Want a full-featured broker with excellent trading tools.

E*TRADE was one of the pioneers of online investing, and is still one of the top choices for investors of all skill and experience levels. It has an excellent trading platform, lots of resources that beginners might find valuable, and it even has a physical branch network for those who might need face-to-face support.

Why beginners love E*TRADE

  • Lots of investment options: Some of the most beginner-friendly brokers don't offer certain types of investments, such as mutual funds, bonds, and CDs. E*TRADE does.
  • Valuable resources: As a full-featured broker, E*TRADE has a library of educational resources, and offers an excellent selection of stock research reports for its clients.
  • Great customer support: E*TRADE offers a variety of excellent customer support options, including 24/7 phone support, online live chat, and a network of physical branch offices.

Why some people don't choose E*TRADE

  • Not as easy to use as others: To be sure, E*TRADE makes it easy enough to buy and sell stocks, but its platform has a bit more of a learning curve than some of the newer app-based brokers.
  • High margin rates: We don't necessarily suggest investing with margin (borrowed money), especially for beginners, but it's worth noting that E*TRADE has some of the highest margin rates around.

Read our full review of E*TRADE.

Merrill Edge® Self-Directed

Best brokerage for beginners who: Want a feature-packed brokerage account, especially Bank of America customers.

Merrill Edge is the brokerage arm offered by Bank of America's Merrill Lynch. It is an online and app-based brokerage that has some unique features, especially for Bank of America customers.

Why beginners love Merrill Edge® Self-Directed

  • Customer service: Merrill Edge has excellent phone support, but there are also advisors available at many Bank of America branches nationwide.
  • Bank of America perks: Customers can access their account's cash balance at any Bank of America ATM and can use the bank's bill pay feature. Plus, Bank of America's Preferred Rewards loyalty program is one of the best in the business, and your brokerage balance helps you earn status.
  • Lots of investment options: Investors can buy and sell stocks, ETFs, mutual funds, options, CDs, bonds, and more.

Why some people don't choose Merrill Edge® Self-Directed

  • Trading platform: The Merrill Edge® Self-Directed trading platform isn't as feature-packed as some of the beginner-friendly full-service brokers on our radar, and it isn't as user-friendly as some of the newer app-based choices.

Read our full review of Merrill Edge® Self-Directed.

Charles Schwab

Best brokerage for beginners who: Want a full-service, feature-packed brokerage that offers some beginner-friendly features.

Charles Schwab is one of the largest brokers in the world, and it is also one of the most feature-packed brokerage platforms, which is especially true after its recent acquisition of TD Ameritrade. Although it's one of the more traditional brokers on our list, Schwab offers an excellent trading platform and some beginner-friendly features.

Why beginners love Charles Schwab

  • Fractional shares: Schwab investors can buy less than a full share of stock, allowing them to put all of their money to work and create a diverse portfolio without a lot of capital.
  • Investment features: In addition to a highly rated app, Charles Schwab offers top-notch educational resources, stock research access, and a variety of trading and investing tools to use.
  • Customer service: Schwab offers excellent customer support by phone, but it also has over 340 physical branch locations throughout the U.S.

Why some people don't choose Charles Schwab

  • High margin rates: While we don't typically suggest that beginners invest with margin, it's worth noting that Schwab has some of the higher margin rates on our radar.

Read our full review of Charles Schwab.

Acorns

Best brokerage for beginners who: Want to put their investments on auto-pilot.

Acorns is a robo-advisor, which means that it automatically invests its clients' money in appropriate portfolios of ETFs. The company started by rounding up purchases and investing users' spare change, but it has evolved into a full-featured robo-advisor.

Why beginners love Acorns

  • Automation: All robo-advisors, including Acorns, allow customers to deposit money or set up recurring transfers. But Acorns also allows users to link their debit and credit cards, and purchases are rounded up to the next dollar, with the change going into the investment account.
  • Many account types: Acorns offers several different account types. You can open standard accounts, IRAs, and custodial accounts for kids.
  • Easy investing: Acorns has five easy-to-understand investment portfolio options to choose from, and money is allocated into a portfolio of ETFs according to what you select.

Why some people don't choose Acorns

  • Fees: Acorns charges a flat monthly fee of $3, $5, or $9, depending on the level of account features. This can be a high percentage for beginners just getting started.
  • Can't buy individual stocks: Acorns is only a robo-advisor. You can't buy shares of your favorite stocks.

Read our full review of Acorns.

Vanguard

Best brokerage for beginners who: Want to build a long-term portfolio of stocks, ETFs, and mutual funds.

Vanguard is best known for its low-cost ETFs and mutual funds, but it also has a brokerage platform. It isn't the most feature-packed or high-tech platform, but it has some benefits that could be appealing to beginners looking to invest for the long term.

Why beginners love Vanguard

  • Mutual funds: Vanguard invented the concept of a low-cost index fund, so it shouldn't be a surprise that the platform is excellent for mutual fund investors. In addition to being able to invest in Vanguard's own mutual funds for free, you can buy and sell more than 3,000 others with no fees.
  • Lots of research offerings: Vanguard provides an assortment of third-party stock research reports from firms like Standard & Poors and others, which can help beginners find great investments.
  • CDs: If you want to put money in a CD, you can do it directly through Vanguard's platform. Not only that, but Vanguard's brokered CDs have some of the highest yields on our radar.

Why some people don't choose Vanguard

  • No fractional shares: You can't buy fractional shares of stock through Vanguard, so it might not be ideal for beginners with limited capital.
  • Not for traders: Vanguard's platform doesn't have many advanced trading tools or features that would appeal to short-term traders.

Read our full review of Vanguard.

How to pick the best online stock broker for beginners

There's no perfect broker for everyone, but here are some of the important factors to keep in mind as you're choosing for a stock broker for beginners.

Cost structure

The best brokerage accounts for beginners charge no commissions for online stock and ETF trades (what you'll generally focus on as a beginner) -- but many do charge commissions or fees for more complex moves like options trading, mutual funds, and other products.

Account minimums

Some stock brokers have a minimum deposit requirement to open an account, anywhere from $5 to $500, and some don't charge anything at all. We think the best investment accounts don't have account minimums. Note that some brokers don't allow fractional share investing, so you'll need enough money to buy at least one share of a stock or ETF. These low-barrier-to-entry brokerages let anyone get started investing, even without a ton of capital.

Variety of funds

Picking individual stocks isn't right for everyone, especially beginners. The best investing platform for beginners should offer low-cost exchange-traded funds and no-fee mutual funds to help you invest wisely without a ton of stock market knowledge.

Account options

Within the realm of stock brokers, you can choose between a cash account and a margin account:
  • Cash account: You can only spend the money you have sitting in your account.
  • Margin account: You can borrow money from your broker to invest with. Trading on margin is a risky prospect, though, and isn't usually a great idea for beginner investors. Margin interest rates are generally high, and that's especially true in a rising-rate environment.

Features and support

If you simply want to stick a recurring amount of money into low-cost ETFs and let your money grow, a no-frills investing app could be all you need. If you're interested in taking your investing to the next level and learning how to choose individual stocks and direct your portfolio yourself, look for a platform that includes educational resources, research, news, and customer support that'll help you make smart choices as you learn the ropes -- and one that offers more advanced trading features you can use as your knowledge grows.
  • Research: Many of the best online stock brokers for beginners offer access to research so you can read more about market sectors as well as individual stocks, ETFs, and mutual funds.
  • News: Some of the best trading platforms for beginners offer news updates, so you can keep tabs on companies and happenings in the stock market in general.
  • Customer support: You should be able to pick up the phone and speak to a live person who can help you navigate any issues you experience.

Educational resources

When you're new to investing, you may not be familiar with key terms that are necessary to manage your account. And if you don't know what a mutual fund is, you probably shouldn't buy one. Many of the best online brokerages for beginners have an educational resources section loaded with information that can help you learn more about investing and gain confidence.

Terms beginners should know when choosing a broker

Account Minimum The lowest amount of money you have to deposit to open a brokerage account.
Brokerage Fee A fee you'll be charged to use a broker's service. These fees can apply to both discount brokers and full-service brokers who offer stock-picking advice.
Cash Account An investment account where you can only spend the money you have in your account.
Margin Account An investment account where you can borrow money from your broker to invest with. Trading on margin is a risky prospect, though, and isn't usually a great idea for beginner investors.
Commission Fee A fee a broker charges to execute transactions.
Full-Service Broker A firm that usually operates out of a physical office where an actual person, also called a stock broker, takes and executes clients' buy and sell orders.
Discount Broker A company that lets an investor buy and sell securities online. As a customer, you can direct the process of buying and selling stocks or sign up for an account with a robo-advisor that'll automate your investments.
Fractional Shares A way to buy a portion of a share of a company rather than a full share. If a share of a given company costs $1,000 but you only want to invest $250, fractional investing lets you buy a quarter of a share.

What is the best investing platform for beginners?

As a beginner investor, you may be working with limited funds, and you may need a bit more guidance getting started. That means you might benefit from an online broker with no account minimum, $0 commissions, and more educational resources.Here's a list of the best stock trading platforms for beginners to consider.

What investing experts recommend for beginners

Dr. Jeff Jones

Dr. Jeff Jones

Jeffrey S. Jones, PhD, CFA®, CFP®, CPA (Inactive), Department Head, Finance and General Business Department

What should investors look for in an online stock brokerage?

Investors should look for a reputable company that has been in existence for several years. Additionally, they should understand that "free" trading is not actually free. The company is finding a way to earn money off of the trades of those customers, and often this involves selling the order flow from those customers to another party. This practice does not necessarily guarantee best execution for the customer.

What does it mean to be an active investor vs. a passive investor?

An active investor is one who believes that with time, effort, and/or skill, they can consistently achieve higher risk-adjusted returns than the overall market. Oftentimes, an active investor believes that pricing inefficiencies exist in financial markets.A passive investor is one who believes that markets are generally price efficient, and that superior risk-adjusted returns cannot be consistently achieved over multiple time periods. In other words, an investor cannot "beat the market," and so the best strategy is to passively invest in a market index fund with very low expenses.

What are some questions new investors should ask when developing an investment strategy?

New investors should likely either 1) engage a professional financial advisor, or 2) pursue a passive investing strategy. A novice investor likely does not have the skill to beat the market on their own. A new investor should also familiarize themselves with common behavioral biases exhibited by investors (i.e., overconfidence, framing, regret avoidance, etc.).

What tips would you give someone new to online brokerages?

They need to recognize three things:
  1. They likely do not possess superior knowledge or skills.
  2. If something is advertised as "free," there likely is a hidden cost.
  3. They need to recognize the difference between trading (speculation) and investing.

What would you say to people who don't think they know enough about the stock market to start investing?

Everyone needs to start somewhere. A passive index fund can be a great tool for someone who does not know anything about the stock market, as it essentially allows one to invest in the entire market using very small sums of money.
Christopher Schwarz, Ph.D.

Christopher Schwarz, Ph.D.

Associate Professor of Finance Faculty Director, CIWM

What would you say to people who don’t think they know enough about the stock market to start investing?

To start investing, you really don’t need to know much about the stock market. You can simply open a brokerage account, buy a total stock market or S&P 500 ETF commission free, and be patient. It’s the same philosophy as if you were investing through a company sponsored 401k. In fact, I would encourage everyone to start investing as soon as possible. New stock traders would also need to understand the behavioral issues that cause individual investors to have poor performance (overtrading, overconfidence, herding in attention grabbing stocks, and so forth).

What are some questions new investors should ask when developing an investment strategy?

The two most important things to consider before investing are: (a) what is your time horizon, and (b) what is your risk tolerance? Once you feel you understand those issues and have gotten some basic education, always try to paper trade your strategy for a while to see how it does. Learn from free mistakes before you actually try to trade individual stocks. Then when you feel ready, start to trade with small amounts of money at first so you can get used to having real money on the line. This will help you learn how to control your emotions, which will likely cost you the most money when you start. You’ll get fear and FOMO at the very worst times. Like budgeting, credit cards, saving, and dieting, being a good investor takes a lot of discipline and patience.

What tips would you give someone new to online brokerages?

All major brokerages are probably close enough to the same, it really doesn’t matter which you choose in terms of prices you’ll get or simplicity of actually placing a trade. One important thing is to make sure whatever is displayed doesn’t impact your decisions. For example, some brokerages show you top mover lists, which can lead to investors herding into the same stocks and likely experiencing negative outcomes.

What is a stock broker?

A stock broker is a trading platform (or person) that facilitates the buying and selling of marketable securities like stocks and exchange-traded funds (ETFs). Through a stock broker, you can open a brokerage account, a specialized financial account designed to hold investments and cash.The term is often used interchangeably with "brokerage," which is technically the name for a business that employs brokers or acts as a broker to facilitate trading.When you want to buy stock in a company, you can't simply call up the company and buy shares, and you can't just walk into your local bank and invest. You need a specialized brokerage account, and that's where stock brokers come in.

What are the different types of brokerage accounts?

There are two main types of stock brokers: discount and full-service. They each come with distinct costs and levels of service.

Discount broker

A discount broker is a company that lets an investor buy and sell securities online. As a customer, you can direct the process of buying and selling stocks or sign up for an account with a robo-advisor that'll automate your investments. Many discount brokers have features that help you decide how to direct your trades, as well as educational tools to help you learn how to invest, but typically there's no human broker taking and filling your orders.

True to their name, discount brokers are much cheaper than full-service brokers, and most offer zero-commission stock trading. For the vast majority of investors -- especially the beginning investor -- a discount broker is the best choice. That's why our picks for the best trading platform for beginners are exclusively discount brokers.

Full-service broker

Think of a full-service broker as an old-school broker. It's a firm that usually operates out of a physical office where an actual person, also called a stock broker, takes and executes clients' buy and sell orders. A full-service broker might also provide personalized investment planning services, such as stock-buying advice, tax guidance, and retirement planning help.

Full-service brokers are far more expensive than discount brokers, given the costs of human advisors and brick-and-mortar locations. But costs have generally come down over the past few decades as they face competition from stock brokers, aim to make investing more accessible, and gain access to tools to automate work on their end.Full-service brokers are best suited to high-net-worth investors who want a personal level of service and dedicated investment portfolio management. Discount brokers are most appropriate for nearly all investors.

What is the best place to buy stocks for beginners?

The best place to buy stocks for beginners will vary depending on your needs. There are three standard options investors have when they want to know where to buy stocks:
  1. Web-based stock brokers
  2. Investing apps
  3. Robo-advisors
The great thing for first-time investors is that many of the best brokers for beginners offer all three avenues to buy stocks under one roof.

1. Web-based stock brokers

The most common place to buy stocks is with a web-based stock broker. These accounts tend to be the best investment accounts for beginners seeking a simple investing platform and $0 online commissions for stocks and ETFs.

Before you start investing, be sure to check out our beginner guide on how to buy stocks.

2. Investing apps

The market is flush with options to buy stocks through mobile apps that also support other financial needs, like budgeting, banking, and cash transfers. The investing and banking app Acorns, as well as Cash App, are great free stock trading apps to buy stocks with micro investments and manage an array of money needs in one place.

3. Robo-advisors

For new investors, some of the best online brokerages for beginners also offer a robo-advisor service -- some exclusively operate this way.Instead of working with a human broker or self-directing your stock trading account, you use a robo-advisor to set your portfolio on cruise control. You input your financial goals, and algorithms work like dedicated brokers to do the buying and selling for you. Robo-advisors are a low-cost solution for new and hands-off investors.

RELATED: Compare our picks for the best robo-advisors for beginners.

What do you need to open a trading account?

The process for opening a brokerage account is similar to the process for opening a checking or savings account. If you're using an online stock broker, it should take just a few minutes, and it'll involve filling out a few simple forms.

If you're opening a brokerage account:

To expedite the process, have this information available:
  • Social Security number (SSN): Your broker needs your SSN for identity verification and to prepare year-end tax forms. If your account earns interest, receives dividend payments, or earns a profit (or loss) through sold investments, you'll have to report those on your tax return.
  • Driver's license or other government-issued ID: If you don't have a driver's license, you can typically use another state-issued ID or a U.S. passport to verify your identity.
  • Funding method: The easiest way to fund a new brokerage account for beginners is by an ACH transfer from your bank account. So have your bank routing and account numbers or online banking password handy. Alternatively, you can mail a check or wire money (usually for a fee), and your broker might have additional funding options.

If you're opening an IRA account:

The process for opening a traditional IRA account or Roth IRA account is no different. In fact, all an IRA account is a standard brokerage account that's taxed in a different manner. We mention this since one of the best steps new investors can take is to begin investing in a tax-advantaged account. Just like commissions, taxes can eat away at investment gains, and IRAs help shelter investors from paying these taxes.

TO LEARN MORE: Check out our picks for the best traditional IRA accounts. To save on taxes in the future, see our best Roth IRA accounts.

Understanding brokerage trading fees

Trading commissions and account minimums are largely a thing of the past -- especially for most online stock brokers. Almost no stock broker or investing app charges commission fees on basic trading, and most let you open an account with $0 deposited, or just a few dollars.

However, most still require a minimum amount of money to use more complex features, such as margin investing. And $0 commission typically applies to stock and ETF trades; some brokers charge commissions for trading options and mutual funds, among other products. Take a look at a broker's full fee schedule before you open an account to make sure it makes sense for how you intend to invest.

Additionally, note that ETFs, mutual funds, and other types of funds you invest in usually come with fees of their own, called an expense ratio. This is a cost outside of your broker's control, but your broker will usually let you know the expense ratios for funds it lets you invest in.

Why commissions and fees matter

Here's why trading commissions are so important: Say your broker charges a $6.99 commission for online stock trades and you have $1,000 to invest. You want to spread your money across a portfolio of five stocks.To make your initial investments, you'll pay nearly $35 in trading commissions. On a $1,000 investment, you're effectively starting with a 3.5% loss in your portfolio.Plus, you'll pay another $6.99 each time you add to one of your stock positions. If you're planning to build up your portfolio over time, it's not hard to see how this can cost you thousands of dollars over the years. When you're comparing the best investment accounts, keep fees in mind!

Keep in mind the account minimum

Most major stock brokers have no account minimum. This historically hasn't been the case. When I opened my first brokerage account over 20 years ago, I needed to deposit $2,000 just to get started.A low- or no-minimum-deposit requirement lets investors who don't have a ton of spare capital get started investing early, so you can gradually build your first investment portfolio and take advantage of long-term gains.

How much money do you need to start investing?

There's no set amount of money that you need to start investing. Some brokers will allow you to open a new account with $1, while others have minimum initial amounts, especially for mutual fund accounts. And even if your broker has a minimum, some will waive the minimum if you're willing to set up a recurring transfer from your bank account into your investment account.It's also important to realize that some brokers allow you to buy fractional shares of stock, while others only allow purchases of whole shares. In other words, if you want to buy a stock that trades for $200 per share, you'll need at least $200 to get started if your broker doesn't allow fractional share investing. If it does allow fractional shares, you might be able to buy a "piece" of a share for just a dollar or two.

How to invest in stocks as a beginner

Follow these steps to get started investing in stocks:

  1. Determine your investing approach. You could be hands-on, selecting individual stocks, or hands-off, letting a robo-advisor manage your portfolio. You could fall somewhere in between, working with a broker to choose low-effort index funds for your portfolio.
  2. Choose how much to invest. Don't invest money you'll need within five years -- your investments aren't liquid funds, and short-term investments are too vulnerable to volatility. Before deciding how much to invest, make sure you've set aside an emergency fund, any vacation savings, short-term education costs, and other short-term savings like a down payment for a home or car.
  3. Open an investment account with a brokerage. Choose a brokerage like the ones on our list of best investment accounts to manage your investments. Open your account with at least the minimum investment.
  4. Diversify your stocks. If you're investing in a self-directed account -- where you pick individual stocks -- choose stocks from businesses you understand across an array of industries. Avoid high-volatility stocks for now, or choose an ETF or index fund to skip having to choose altogether.
  5. Continue investing. Continue to contribute to your investment accounts and hold on to the investments long term in order to get the best and most stable returns on your investments.

Should beginner investors buy fractional shares?

Many of the best trading platforms for beginners now offer the ability to buy and sell fractional shares of many popular stocks. Investors essentially buy a slice of a share, which opens up access to a wide universe of investments for beginner investors that would otherwise be unavailable when starting with a small portfolio. For example, some popular stocks can cost more than $1,000 per share. Buying these stocks would be impossible for someone starting out with, say, a $500 investment.

But with fractional share investing, investors can buy slices of these stocks in smaller dollar amounts. Best yet, many of the best brokerage accounts for beginners have $0 commissions to invest in fractional shares and you can do so with as little as a few dollars.

LEARN MORE: Best brokers for fractional shares

Additional investing resources for beginners

If you're new to investing, here's a handful of helpful resources to help you get started:

FAQs

  • There is no fee associated with opening a brokerage account in virtually all cases. However, some brokers have minimum initial deposit requirements, and if there is a new account welcome bonus, there is usually a minimum amount of money you'll need to put in your account in order to take advantage.
  • If your brokerage account has a cash balance, you can withdraw money whenever you want, assuming it is a standard (non-retirement) account. With retirement accounts, you must be at least 59 1/2 years old to withdraw, or have a qualifying exception to avoid an early withdrawal penalty. If you don't have enough cash in your brokerage account, you may need to sell some investments before you initiate a withdrawal.
  • There is no limit to the amount of brokerage accounts you can have, and many investors have several. For example, it wouldn't be unusual for an investor to have one or more individual brokerage accounts, at least one retirement account, custodial accounts such as UGMAs for children, and college savings accounts.
  • A brokerage fee is a fee you'll be charged to use a broker's service. These fees can apply to both discount brokers and full-service brokers who offer stock-picking advice.
  • Fractional shares let you buy a portion of a share of a company rather than a full share. If a share of a given company costs $1,000 but you only want to invest $250, fractional investing lets you buy a quarter of a share. This is a great option for beginner investors who don't have large sums of money to invest.
  • A paper trading account lets you go through the motions of buying stocks without using actual money. It's a good way for beginners to learn the ropes of investing.
  • Cash and securities in a brokerage account are insured by the Securities Investor Protection Corporation (SIPC), so you have protection if your broker goes bust. But that doesn't mean you won't lose money if your investments perform poorly.
  • You can cash out a brokerage account by withdrawing your cash balance and selling your investments for cash. It could take a few days for your trades to settle, so you may not get all of your money right away. These can have tax implications, so check with a tax professional.
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