Best online stockbrokers for beginners

Our top 6 picks for best online stockbrokers

To make our choices for best online stockbrokers for beginners, we examined the verified reviews on our site and considered factors benefiting beginner investors the most, such as educational tools, ease of use and minimum investment requirements.

• Robinhood
• Ameriprise Financial
• TD Ameritrade
• Charles Schwab & Co.
• Vanguard
• E*TRADE

Our picks may be Authorized Partners that compensate us. This does not affect our recommendations or evaluations but can impact the order in which the companies appear.

What is a brokerage account?

A brokerage account is a financial account that allows you to buy and sell investment products such as stocks, bonds, mutual funds and exchange-traded funds (ETFs).

It acts as the go-between for investors and the financial markets, allowing you to directly place trades and manage your investment portfolio. Many brokerage accounts offer features like research tools, portfolio tracking and access to professional advice to help you make informed decisions.

» MORE: What is a good investment?

Types of brokerage accounts

The Securities and Exchange Commission divides brokerage accounts into two main types:

• Cash accounts – These are the most common non-retirement options, letting you purchase investments with your own money.
• Margin accounts – These involve your broker lending you cash in order to buy investment products. Those investments then serve as collateral. There are often additional costs associated with buying on margin, and it comes with additional risks as well.

A variety of account types fall under these two broad categories, including many proprietary options. Because there are so many account types available and brokerage offerings are always changing, it’s a good idea to compare individual account types once you’ve narrowed down your list of potential brokerages.

If a standard brokerage account isn’t right for you, consider working with an automated robo-advisor or opening a retirement account, such as a 401(k) or individual retirement account (IRA). These other investment accounts offer different features and functions. For example, retirement accounts often come with tax benefits. You can also get IRAs backed by gold or Bitcoin.

Full-service brokerage vs. discount brokerage

It's up to you to decide what type of account is best suited for your needs:

• A full-service online brokerage provides a higher level of individualized service and guidance. It may offer more products to invest in and personalized services to help you with investments. However, it also typically costs more.
• A discount brokerage may be a good option if you want to save money and you’re fine doing more of the work yourself. Many online brokerages lean towards this model.

How to choose a brokerage account

Here are some tips to help you choose the right brokerage account:

• Determine what you wish to invest in and make sure your online broker offers that. If you’re not yet sure what you want to invest in, consider an account with a brokerage that has a variety of investments available.
• Look for a brokerage account that has a simple-to-use platform and ample research material.
• Be sure the account you choose does not require a higher minimum investment than you're comfortable with. Also, consider your plans for the future. It might be wise to allow for some wiggle room should you want to pull out some funds or try another brokerage down the road.
• Research and compare fees, platform features and any other limitations or costs. As a new investor, you might not know what’s normal in the industry, but comparing options from leading brokerages gives you a benchmark for what’s acceptable.

Many brokerages offer multiple types of accounts, so compare the tiers and see what level of account you need.

» MORE: How to open a brokerage account

Bottom line

The right broker for you will vary based on your situation and your personal preferences. However, the best online brokers for beginners typically prioritize educational tools, customer service and a simple-to-use platform and app.

As a new investor, you want a broker that has a low barrier to entry (minimal fees and account minimums) and enough options and resources to let you test the waters, see what you prefer and grow along with your portfolio.

Methodology

To make our choices for best online stockbrokers for beginners, we started with a list of 17 popular online brokers. We examined the verified reviews and ratings on our site and also reviewed information benefiting beginner investors the most, such as educational tools, ease of use and minimum investment requirements.