Best Online Stock Brokers for Beginners

Brokers, Investing

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We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers.

Maybe you’re not a seasoned investor (yet). That doesn’t mean you need to settle for anything less than a high-quality, low-cost, cutting edge, customer-focused brokerage service. In fact, the sheer bounty of broker options for beginning investors can make the task of choosing one the hardest part of getting started.

Based on costs, account minimums, range of services, investment choices and other features that new investors prioritize, NerdWallet has narrowed the universe of options so you can quickly identify the best online broker for your needs and begin your illustrious investing career.

The best online brokers for beginners overall

These brokers offer tons of educational offerings for beginners (and the advanced investor you’ll eventually become), affordable commissions, a broad range of inexpensive investment options and strong customer service support.

 

The hands-on DIY investor can have it all. Both TD Ameritrade and Charles Schwab offer top-notch customer service, abundant online educational content, in-person support at local branches and, most importantly, access to a diverse array of low-cost investments. (All investors, not just beginners, need to watch out for return-eroding investment fees, such as the expense ratios on funds and ETFs.)

Aiming to build your portfolio with mutual funds and ETFs (exchange-traded funds, which are low-cost index funds that trade like individual stocks)? You’ll find both brokers offer a healthy lineup of commission-free ETFs as well as no-transaction-fee mutual funds (of which TD Ameritrade has more than 2,000 and Schwab offers more than 3,000).

Investors interested exclusively in ETFs may want to lean toward Schwab as the broker of choice. Customers have access to the Schwab ETF Portfolio Builder tool, which guides investors through the process of creating a diversified ETF portfolio based on risk tolerance. On top of that, it has more than 200 commission-free ETFs (a larger selection than TD Ameritrade offers).

As for the minimum investment requirement to open an account, you can’t beat TD Ameritrade’s $0 vs. Schwab’s $1,000. However, Charles Schwab often waives its account minimum for investors who agree to automatic monthly transfers of $100 or more. That’s great incentive for new investors to keep building their portfolio over time.

The best online brokers with no minimum deposit requirement

The $0 initial deposit requirement at these brokers means you can open an account and get set up to start investing today.

Don’t let the cover charge some brokers and mutual fund companies require to get in the door stop you from opening an IRA. With just the lint in your pocket you’ll be welcomed with open arms at Merrill Edge and E-Trade — two of NerdWallet’s top-rated brokers. (One important caveat: At E-Trade the $0 account minimum applies only to customers opening an IRA. You’ll need $500 in order to meet the minimum account balance requirement for a regular taxable account.)

Deciding between these $0-minimum-deposit brokers comes down to what kinds of investments you seek and how often you plan to trade.

For mutual funds, Merrill Edge comes out ahead with its more than 5,000 no-transaction-fee funds compared with E-Trade’s roughly 1,300. That said, E-Trade’s 100-plus commission-free ETFs beat out Merrill, which offers none. As far as commissions, you’ll pay as much as $3 more per trade with E-Trade than you would in a Merrill brokerage account. And should you decide to eventually move your money elsewhere, consider that Merrill Edge charges a $49.95 account closing fee (compared with E-Trade’s $60). But there’s a good chance you’ll want to stay put at either you choose given the high-quality service and the additional bells and whistles that appeal to novice and seasoned investors alike.

The best online brokers for customer support

New investors will appreciate that these brokers have people on standby to answer questions online, over the phone and in person. They also have an impressive lineup of classes and tutorials offered both online and at local branches.

Fancy trading widgets, research doohickeys and rock-bottom fees aren’t every investor’s top priority. Having someone to walk you through how to use those widgets and doohickeys may be a bigger selling point to those just getting started. At Scottrade and Fidelity, help is just a phone call (or short drive to a brick-and-mortar branch) away.

Each of these discount brokerages make customer and investor education a top priority. (The trade-off is higher-than-average minimum account requirements for non-IRA accounts.)

Both have branches across the country where they host investor events and teach classes and where customers can speak to an investment advisor in person. If there’s no branch nearby, phone service and virtual customer service chat is available, and similar educational perks — online guides, live webinars — can be had through each broker’s online education center.

In the customer service category, Merrill Edge also deserves a mention. Since its merger with Bank of America, the broker has increased its office space to more than 2,000 locations. Customers can schedule complimentary consultations in person or over the phone with Merrill Edge Financial Solutions Advisors.

The best low-cost online brokers

Even seasoned investors with high-dollar balances need to watch out for the corrosive effect fees can have. If your main aim is to keep overall account expenses in check, these brokers offer a range of investment options and have the courtesy not to nickel-and-dime customers for inactivity.

 

You’re not going to get any cheaper than free, and that’s exactly what investing app Robinhood charges: commission-free trading of more than 5,000 equities and ETFs. What you don’t get for your $0 on this bare-bones platform is access to research reports, analysis software and automatic reinvestment of dividends (those are credited back to accounts as cash). However, the more limiting factor for some beginning investors may be that Robinhood supports only individual taxable accounts and not IRAs.

For more choice — in types of accounts, available investments and everything else a full-fledged brokerage offers — look no further than OptionsHouse, which also happens to be one of our top picks overall for best online brokers for stock trading. Like Robinhood, OptionsHouse has no account minimum to get started and no punishing inactivity fees. And it does support IRAs. The company’s $4.95 per-trade commission compares favorably with other mainstream brokers. At OptionsHouse, that $4.95 buys you a lot, including access to an impressive amount of research and education tools.

The best online brokers for mutual fund and ETFs

These brokers offer a large lineup of low-cost ETFs and no-transaction-fee mutual funds.

It’s no surprise that the king of low-cost mutual funds (Vanguard) and the company that brought online discount investing to the masses (Charles Schwab) earn high marks in this category. For beginning investors seeking to build a portfolio of diversified funds and/or ETFs, both of these brokers offer the tools and services you need — as long as you’re able to meet certain minimum investment requirements.

The deciding factor may well be the range of offerings: which funds and ETFs you’re eyeing and which broker has them at the most favorable terms.

Both Vanguard and Schwab offer plenty of no-transaction-fee (no commission) mutual funds as well commission-free ETFs. For mutual fund investors without a lot of money to invest at the start, Schwab’s Mutual Fund OneSource platform stands out. With as little as $100, customers can start investing in some of Schwab’s fund offerings, and subsequent investments can be made for as little $1. But be careful if you want to invest in a fund that is not on the broker’s no-fee list: Schwab charges $76 — one of the highest trading commissions of all the brokers we’ve surveyed.

At Vanguard there’s no minimum to open a brokerage account, however many of the funds it offers have a $1,000 minimum investment requirement to get in. That said, the $1,000 price of entry doesn’t apply to ETFs at Vanguard: Investors can buy as many or as few shares as they can afford, and have access to its more than 50 commission-free ETFs (Schwab offers more than 200). Investors at Vanguard also have access to the extensive lineup of low-cost ETFs the broker is known for. The difference here is in what you’ll pay for ETFs that are subject to a trading commission. At Vanguard the price is $7 for the first 25 trades per year and $20 for subsequent trades if your balance is under $50,000. At Schwab investors pay $8.95 per trade.


Best brokers for beginners: summary

Broker
Best
for
Highlights
Commiss-
ions
Promotion
Account minimum
Start investing
TD Ameritrade
Overall
Broad educational content;
no inactivity fees
$9.99
per trade
$100 to $600 cash bonus, depending on account size
$0
Charles Schwab
Charles Schwab
Overall
+
Mutual Funds & ETFs
Among largest selections of commission-free ETFs
$8.95
per trade
$100 to $500 cash bonus for deposits of $10,000 or more
$1,000
E*Trade
E*Trade
No account minimum
Low commissions, superior trading tools
$9.99
per trade; volume discounts
Trade free
for 60 days with deposit of $10,000 or more
$500
($0 for IRAs)
Merrill Edge
Merrill Edge
No account minimum
Breadth of research reports
$6.95
per trade
$100 to $600 cash bonus, depending on account size
$0
Fidelity
Fidelity Investments
Customer support
24/7 live support; free investing seminars
$7.95
per trade
300 commission-free trades with deposit of $50,000 or more
$2,500
($0 for IRAs)
Scottrade
Scottrade
Customer support
High level of support: online + 500 branches
$7.00
per trade
50 commission-free trades with deposit of $10,000 or more
$2,500
($0 for IRAs)
Robinhood
Robinhood
Low cost
No-frills, free trading app for beginners
$0
per trade
None
$0
OptionsHouse
OptionsHouse
Low cost
Low commissions, free tools and research
$4.95
per trade
$1,000 in free trade commissions with deposit of $5,000 or more
$0
Vanguard
Vanguard
Mutual Funds & ETFs
Low-cost index funds and ETFs
$7
for first 25 trades/year, $20 for later trades
None
$0; $1000+ fund minimums


» MORE:
 New to investing? Read our article on how to buy stocks.

Dayana Yochim is a staff writer at NerdWallet, a personal finance website: Email: dyochim@nerdwallet.com. Twitter: @DayanaYochim.