Best Online Stock Brokers for Beginners for September 2021

A photo to accompany a story about the best online stock brokers for beginners Shutterstock

We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

Gone are the days when investing was only for professionals or the wealthy. 

Investing is more accessible now than ever, and more necessary than ever. These days, experts agree simply saving money — whether for retirement, college, or simply a big expense on the horizon — is often not enough. To really grow your wealth and secure your financial future, you need to invest it.

Pro Tip

We recommend building a diversified portfolio with low-cost ETFs and index funds for long-term investing. If you want to trade individual stocks, we recommend that you keep active trading and stock picking to a small portion of your overall investing strategy, and make sure you always do your research and understand what you’re buying.

With the rise of online stock brokers, anyone can start investing, often with no fees and no minimum deposit. Mobile apps and online trading platforms allow you to buy stocks with the tap of a finger, while many brokerages are offering free tools and educational resources to help new investors learn how to invest and make informed decisions.

We’ve rounded up our favorite online stock brokers for beginners, as well as expert advice on everything you need to know about picking a brokerage and getting started. 

Best Online Stock Brokers for Beginners for September 2021

Fidelity

A reputable name in the investing space, Fidelity offers several different investment account options, from retirement accounts like IRAs and 401(k)s, to brokerage accounts, to wealth management services. Fidelity’s basic brokerage account offers all of the most common investment options, like stocks, bonds, and ETFs, and charges no fees and no commissions on most trades. Fidelity offers fractional shares, lowering the barriers to entry for new investors who don’t have a lot of cash to invest upfront. With fractional shares, you can buy part of a share of a stock, for the exact dollar value you want, if the full share costs more than you want to invest. 

Fidelity’s many tools and learning resources make it easy for new investors to do their own research and get informed. Its mobile app is great for investors who want to manage their money on the go.

Fidelity also offers a robo-advisor option as well as private wealth management services for those who want their investments managed for them. These services may charge an advisory fee, either in the form of a flat monthly fee or a percentage of the portfolio balance annually. Fidelity Go, Fidelity’s robo-advisor, charges no fee on account balances of $9,999 or less. 

Fidelity
Investment products offered• Stocks
• Options
• Bonds & CDs
• ETFs
• Mutual funds
• Sector funds
Commissions and fees• $0 commissions for online U.S. stock, ETF, and option trades (terms and conditions apply)
• $0.65 per contract on options
• $1 per bond or CD in secondary trading and free for US Treasuries traded online
• $0 account service fee
• $0 – 0.35%/yr advisory fee for Fidelity Go
Account minimum• $0 for self-directed trading account
• $0 for Fidelity Go
Mobile app?Yes
Fractional share purchases?Yes

Charles Schwab

Charles Schwab offers all the popular investing products with $0 commissions. Charles Schwab recently acquired TD Ameritrade, but the two companies are operating as independent brokerages until 2023. In addition to brokerage accounts, Charles Schwab also offers Schwab Intelligent Portfolios®, a fee- and commission-free automatic investing service. While a basic brokerage account with Charles Schwab has no account minimum requirements, you’ll need a minimum of $5,000 to open a Schwab Intelligent Portfolio account.

Like Fidelity, Charles Schwab offers fractional shares, which lets you buy stock in any company in the S&P $500 for as little as $5, even if the amount you invest isn’t enough to buy a full share. 

Charles Schwab offers a satisfaction guarantee, and will refund your fee or commission if you’re not satisfied for any reason. Charles Schwab will also cover 100% of any losses in your accounts due to unauthorized activity as part of its security guarantee.  

Charles Schwab
Investment products offered• Stocks 
• Options
• Bonds
• Mutual funds
• ETFs
• Futures
• Margin loans
• Money market funds
Commissions and fees• $0 commissions on online U.S. stock, options, and ETF trades
• $0.65 per contract on options
Account minimum• $0 for brokerage account
• $5,000 for Schwab Intelligent Portfolios
Mobile app?Yes
Fractional share purchases?Yes

TD Ameritrade

TD Ameritrade was recently acquired by Charles Schwab, though both companies will continue to operate as independent brokers until 2023. TD Ameritrade offers commission-free online investing options and a multitude of online resources and tools for investors. 

One of its featured tools is thinkorswim, a comprehensive digital platform that lets investors access third-party research, educational resources, and planning tools. One feature of note of the thinkorswim platform is the paperMoney stock market simulator that lets you practice trading without risking real cash. While these features may be a bit complicated — and even unnecessary — for new investors and are better suited to trading than long-term investing, they’re still valuable if you want to educate yourself or if your investing goals change in the future.

If you have questions or need help getting started, TD Ameritrade offers 24/7 phone and email customer service, as well as more than 175 physical branch locations. Although the recent acquisition by Charles Schwab means that TD Ameritrade accounts will eventually be converted to Charles Schwab accounts, this conversion is scheduled to take place between April and September of 2023, according to the Charles Schwab website. This means that if you like the benefits TD Ameritrade offers, you can still open and keep a TD Ameritrade account for some time before the change takes place. Even though the conversion process isn’t finished yet, TD Ameritrade accounts now carry some of the benefits offered by Charles Schwab, including a new Satisfaction Guarantee similar to Charles Schwab’s own.  

TD Ameritrade
Investment products offered• Stocks
• Options
• Bonds & CDs
• ETFs
• Mutual funds
• Futures
• Forex
Commissions and fees• $0 commissions on online U.S. stock, ETF, and option trades
• $0.65 per contract on options
• $0 account service fees
Account minimum• $0 required to open an account
• Electronic funding minimum is $50
• Margin or options privileges require a minimum balance of $2,000 on the account
Mobile app?Yes
Fractional share purchases?No

Ally Invest

Previously featured on our best high-yield savings accounts list, Ally also offers investment accounts in addition to checking and savings accounts. Like its competitors, Ally Invest offers commission-free trading on the most popular investment options. Ally Invest is especially good for existing Ally customers, as you can easily access both your banking accounts and investment accounts from the same platform (web and mobile app) as well as make seamless transfers from one to the other. No account minimums make it easy to get started.

If you want a more hands-off option than self-directed trading, Ally also offers managed portfolios that are curated and managed by Ally. You can choose your investing goals and time horizon, and Ally’s robo-advisor service will create a balanced portfolio tailored to your needs and rebalance it as needed. Unlike some other robo-advisors, Ally does not charge any advisory fees, annual charges, or rebalancing fees for its managed portfolios.

Ally Invest
Investment products offered• Stocks
• ETFs
• Options
• Bonds
• Mutual funds
• Margin account
Commissions and fees• $0 commission on online U.S. listed stocks and ETFs
• $0.50 per contract on options
• $1 per bond
• $4.95 + $0.01 per share for stocks priced less than $2.00
Account minimum• $0 for self-directed trading account
• $100 for managed portfolio
Mobile app?Yes
Fractional share purchases?No

E*TRADE

E*TRADE offers a full range of investments with no commissions on the most popular options. E*TRADE has solid options for both new and experienced investors alike. For new investors, commission-free pre-built portfolios make it easy to get started if the thought of picking your investments on your own feels too overwhelming.

Power E*TRADE — the version of the platform geared toward experienced traders — offers a host of tools, data, and research to help facilitate advanced trading. Notably, the E*TRADE mobile apps for both the standard and Power versions of the platform make it easy to manage your portfolio on the go.

E*TRADE
Investment products offered• Stocks
• Options
• Mutual funds
• ETFs
• Futures
• Bonds & CDs
• Prebuilt portfolios
Commissions and fees• $0 commissions on online U.S. stocks, options, and ETFs
• $0.65 per contract on options
• $1.50 per futures contract
• $1 per bond
Account minimum• $0 for brokerage accounts
• Prebuilt portfolios: $500 (mutual funds) or $2500 (ETFs)
Mobile app?Yes
Fractional share purchases?No

Charles Schwab

Charles Schwab offers all the popular investing products with $0 commissions. Charles Schwab recently merged with TD Ameritrade, but the two companies are operating as independent brokerages until 2023, so you can still open and keep a Charles Schwab account for some time. In addition to brokerage accounts, Charles Schwab also offers Schwab Intelligent Portfolios®, a fee- and commission-free automatic investing service. While a basic brokerage account with Charles Schwab has no account minimum requirements, you’ll need a minimum of $5,000 to open a Schwab Intelligent Portfolio account.

Like Fidelity, Charles Schwab offers fractional shares, which lets you buy stock in any company in the S&P $500 for as little as $5, even if the amount you invest isn’t enough to buy a full share. 

Charles Schwab offers a satisfaction guarantee, and will refund your fee or commission if you’re not satisfied for any reason. Charles Schwab will also cover 100% of any losses in your accounts due to unauthorized activity as part of its security guarantee.  

Charles Schwab
Investment products offered• Stocks 
• Options
• Bonds
• Mutual funds
• ETFs
• Futures
• Margin loans
• Money market funds
Commissions and fees• $0 commissions on online U.S. stock, options, and ETF trades
• $0.65 per contract on options
Account minimum• $0 for brokerage account
• $5,000 for Schwab Intelligent Portfolios
Mobile app?Yes
Fractional share purchases?Yes

How We Chose These Brokers

To compile our best brokers list, we looked at several factors: investment options available, commissions and fees, accessibility, and ease of use of the platform (online and mobile), and reputation. In addition, all the brokers we chose are members of the Securities Investor Protection Corporation (SIPC), meaning your investments will be protected for up to $500,000 in the (unlikely) event of the broker going out of business. 

How to Pick the Best Brokerage Account

Picking the best brokerage account depends on what your investing goals are and what you need from a broker. But these are some good basic factors to consider:

Fees

Fees are one of the most important factors to consider when choosing a brokerage, as any trading commissions or account fees can quickly eat into your earnings. While you can find many fee-free options nowadays, especially among online brokerages, the presence of fees isn’t necessarily a dealbreaker; just make sure that you fully understand what the fees are, and that you’re getting enough value from the broker to make the fees worth it.

It’s worth noting that brokers may charge different fees for different investment products. For example, many brokers charge $0 commissions on U.S.-listed stock and ETF trades, but may charge a commission for bonds. Funds, such as index funds, mutual funds, and ETFs, may come with additional fees of their own called expense ratios. Expense ratios tell you what percentage of a fund’s assets are used to cover the fund’s operating costs. Expense ratios are set by the company managing the fund, not by the brokerage you use to buy or sell the fund. We recommend investing in low-cost index funds, which commonly charge expense ratios as little as 0.10% or less. For example, the iShares Core S&P 500 ETF has an expense ratio of 0.03%, meaning that investors will only pay $3 per year for every $10,000 invested in the fund. 

Barriers to entry

Account minimums are another thing to watch out for, especially for new investors who may not have a huge sum of cash to invest. “Look at what the minimum deposits are to make sure you can afford to open up an account with this company,” says Dominique Broadway, financial literacy expert and creator of Finances Demystified

If you don’t have a lot of money to invest, consider finding a brokerage that allows you to purchase fractional shares. The prices for certain stocks can get expensive, but having the option of fractional shares lets you purchase stocks based on the dollar amount you want to invest, even if you end up with a fraction of a share of a company instead of a whole share. 

Reputation 

Before handing your money to a brokerage, you should always do your due diligence to make sure it’s a reputable company. At the very least, the brokerage should be registered with the SEC and part of a self-regulatory organization, or SRO. It’s best if the brokerage is a member of the SIPC as well so that your investments are insured if the broker goes out of business. 

Beyond the basic due diligence to avoid scams, it’s also worth looking at a brokerage’s overall reputation, history, and business practices, to determine if you feel comfortable with how they operate. If you’re uncomfortable with a company’s public reputation or business practices for any reason, it’s probably best to trust your gut and look elsewhere. 

Ease of use and accessibility 

Ease of use means something different to everyone, but at the end of the day, investing shouldn’t be complicated or a chore. Pick a brokerage that gives you easy, understandable access to your investments and offers the features you need. 

“I like to look for brokerage accounts that make things super simple,” says Broadway. Another thing she likes? “A nice app,” she says, so she can easily look at and review her money. But if there’s something else that would make your investing experience go smoother — for example, easily-reachable customer service or on-site learning materials — it may be worth looking for a brokerage that can meet your specific needs.

What Do I Need to Open a Brokerage Account?

Each brokerage will have different requirements for opening an account, but in general, here are some documents or information you’ll want to have on hand:

  • Your personal information (name, address, date of birth, phone number, and email address)
  • Your Social Security number
  • Your driver’s license or other government-issued ID
  • Your annual income and net worth
  • Your employment status and occupation
  • Your bank account information
  • An opening deposit (if applicable)

Before you open a brokerage account, you should also have a good idea of your investment goals, your time horizon (when you’ll need the money), and what type of account — retirement account, cash account, or margin account — you want to open. And before you buy any investment, make sure you’ve done your research and fully understand what the investment is, how much it costs, and what risks you’re taking in buying it. The key to smart investing is to know your goals, understand what you’re doing, and do your research every step of the way. 

What Is a Stock Broker?

A stock broker, also known as a brokerage, is a financial service provider that allows you to buy and sell investments, says Shang Saavedra, personal finance blogger and creator of Save My Cents. While most brokers will offer common investment options like stocks and ETFs, some brokers also offer more specialized investment products like cryptocurrency. “A brokerage is essentially the middle person between you and the investment that you want to buy,” Saavedra explains. 

Brokers buy and sell investments for clients and charge a fee, known as the broker’s commission, for that service. Most brokers are required to register with the Securities and Exchange Commission (SEC) and join a self-regulatory organization (SRO) like the Financial Industry Regulatory Authority (FINRA) (with some exceptions, as outlined by the SEC). Most states also have licensing requirements for brokerages operating in their state. 

While banks are insured by the Federal Deposit Insurance Corporation (FDIC), a federal agency, brokerages have a different form of protection — a nonprofit organization known as the Securities Investor Protection Corporation (SIPC). Not all brokerages are members of SIPC, but most reputable ones are. The SIPC will protect your investments for up to $500,000 if your brokerage firm fails. But keep in mind, SIPC protection does not apply in the case of investment losses due to the market.

Where Can You Buy Stocks?

There are several ways to buy stocks, but typically you’ll have to go through one of two channels: the company itself or a stock broker. 

Here’s the breakdown of three common methods for buying stocks:

1. Direct stock plans. Some companies may allow you to buy or sell stocks directly through the company without going through a broker. While this method could help you save on commissions, there may be complications. There may be other fees or minimum purchase amounts. Some companies may limit these plans to only their employees. 

With a direct stock plan, companies will typically buy or sell shares at specific, predetermined times at an average market price, so you usually won’t be allowed to buy and sell shares in this way whenever you want.

2. Dividend reinvestment plans. Similar to direct stock plans, these plans are agreements you sign with an individual company. A dividend reinvestment plan lets you exchange your dividend payments from a stock for more shares of that stock.

3. A stock broker. A stock broker buys and sells stocks on your behalf for a fee, known as a commission. The three most common types of stock brokers are full-service brokers, discount brokers, and online brokers. Nowadays, there are many online brokerages that offer commission-free trading. 

What Are the Different Types of Stock Brokers?

There are several types of brokers, mainly differing from one another in the services they provide and the fees they charge. While some brokerages are still run by professional stock brokers who buy and sell stocks for a living, the rise of online brokerage accounts and robo-advisors have given investors a self-service route that doesn’t require the same level of human interaction as in the past.

Here are the most common types of stock brokers:

Full-service stock brokers 

With big names like Fidelity, Charles Schwab, and TD Ameritrade, full-service brokerages provide more comprehensive services like human-based financial advising and in-person offices. Full-service brokerages were traditionally the most expensive type of brokerage, often charging high commissions or management fees. 

But with the rising popularity of online investing, many full-service brokerages have separated their trading platforms from their financial advising services. There’s a common misconception that full-service brokerages are always expensive, but what’s actually expensive is the financial advising and not the brokerage account itself, says Saavedra. For many of the popular full-service brokerages, “it actually costs you no money to open an account, and many of their investments have no commissions,” she adds.

While financial advising or managed portfolios from a full-service brokerage may still come at a premium, full-service brokerages can actually have the lowest costs for those who just need a place to buy and sell investments without any extras. 

Robo-advisors

Robo-advisors are brokerages that use computer algorithms to help you decide what you want to invest in, says Saavedra. Somewhere between a self-directed trading account and a traditional financial advisor, robo-advisors can provide you with a custom-built investment portfolio based on your preferences, goals, and risk tolerance. They’ll also continuously manage that portfolio for you, so there’s no need to buy or sell individual investments on your own. 

Robo-advisors may charge a management fee, typically a percentage of your total assets, says Saavedra. Robo-advisors tend to cost more than a self-directed trading account but less than a human financial advisor. Robo-advisors can be a great starting point for new investors who don’t want to research and pick investments on their own, and are willing to pay a fee to have their portfolio managed for them. 

App-based brokerages

A relatively recent development in the investment world, app-based brokerages like Robinhood, Stash, and Public let you buy and sell-stocks from the palm of your hand via smartphone app. The lines of this category have begun to blur as traditional full-service brokerages like Fidelity and TD Ameritrade also offer mobile apps, and traditionally app-based brokerages like Robinhood have expanded to include a web platform in addition to their mobile apps. 

One of the unique features of some of these new app-based brokerages is the social media element, says Saavedra. With the brokerage app Public, for example, you can see what stocks other users are buying or selling as well opt to make your own trades public. 

While investing apps can provide an easy, almost game-like way to get started investing, their accessibility and ease of use can present big risks if consumers fail to educate themselves about investing and its risks. In December 2020, for example, the Massachusetts Securities Division filed a complaint accusing Robinhood of “exposing Massachusetts investors and their assets to unnecessary trading risks,” “using aggressive tactics to attract new, often inexperienced investors,” and using “strategies such as gamification to encourage and entice continuous and repetitive use of its trading application.” 

Robinhood posted a statement on its blog in response to the complaint, saying: “We will stand with our customers to enable them to have the investing experience they want. We will not succumb to unfounded, politicized allegations and unreasonable demands from the Massachusetts Securities Division. We welcome the opportunity to correct the record on both the facts and the law, and expect to prevail in state court.” 

No matter if you use an app-based brokerage or another type of brokerage, we always recommend investing for the long term with a diversified portfolio of index funds and ETFs, rather than day trading or picking individual stocks.

Trading Commissions and Account Minimums

Before you open a brokerage account, it’s important to understand two important concepts that will have a big impact on your money: trading commissions and account minimums.

Account minimums are the minimum deposit required to open — or maintain — an account with a brokerage. High account minimums can be a barrier to entry to new investors without a lot of cash, but you can find many brokerages that have low or no account minimums. 

Pro Tip

If you don’t have a lot of money to invest, look for brokerages that offer fractional shares, which will allow you to buy the exact dollar value of stock you want, even if it’s less than one full share.

Trading commissions are the fees a brokerage charges for using its services. Trading commissions are charged every time you buy or sell a stock or exchange-traded fund (ETF) and are typically calculated as either a percentage of the sale or a flat fee per trade (regardless of the sale amount). The commission fees depend on the brokerage you use, with full-service brokerages often charging higher commissions. Many brokerages nowadays, like some of the ones featured above, offer commission-free trading on select ETFs and stocks.

Note that trading commissions are different from ETF operating expense ratios (OER). While trading commissions are charged by the brokerage when you buy or sell an ETF, the expense ratio is the annual cost of owning an ETF. It’s paid to the fund company and it covers the costs of managing the fund.

Beyond commissions and operating expense ratios, there may be other fees that come with having a brokerage account, such as annual account fees. Annual fees are typically more common among professionally-managed investment accounts, rather than self-directed accounts. 

On this page