Best Online Brokers for Beginners of 2024

At the start of your investment journey, many things can feel intimidating. Your brokerage account should not be one of them. The best broker for beginners is more than just a platform to place buy and sell orders – it’s a trusted partner that supports you at every step with an intuitive interface, abundant educational content, no-fee trading, low account minimums, and strong customer service.

We conducted hundreds of hours of comprehensive research, data analysis, and live broker platform demos to find the best brokerages for beginners. Charles Schwab is our best overall online broker for beginners thanks to its massive library of evergreen educational materials, unmatched live coaching and training programs, and top-tier customer service. Charles Schwab is just one of 26 online brokers that we evaluated based on 89 criteria, including ease of use, costs, user experience, and additional features.

Best Online Brokers for Beginners of 2024

• Best Overall: Charles Schwab
  
• Best Broker for Investor Education: Charles Schwab
• Best Broker for Customer Service: Charles Schwab
• Best Broker for Ease of Trading Experience: E*TRADE
• Best Broker for Research: Merrill Edge
• Best for Young Investors: Fidelity
  

Best Overall: Charles Schwab

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• Account Minimum: $0
• Fees: $0 for stock/ETF trades, $0.65 per contract for options

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Why We Chose It

Best Overall

Charles Schwab serves investors of varying experience levels, from brand-new to very sophisticated. Schwab is a leader among discount brokers for its educational and research materials, extensive investing and trading tools, and the ease with which clients can open an account and start investing, with $0 account minimums and $0 commission trades. The company has also been able to integrate help centers across various user-friendly platforms.

Best Broker for Investor Education

Charles Schwab offers investors a vast array of investing and trading education and coaching, with the most frequent programming in the industry. Not only does Schwab offer abundant educational materials, guides, and articles in its online magazine, "Onward," but the company also has Schwab Network, which is free live-streaming financial news throughout the day during market hours, plus a library of on-demand clips. Additionally, investors have access to Schwab Coaching, where they can view live webinars, webcasts, and podcasts on various investing topics or listen to a podcast to gain further insight into the markets, financial planning, policy, or the economy. 

Best for Customer Service

Charles Schwab shines in the area of customer service, providing a client-centered experience with 24/7 customer service support via telephone and online chat. Additionally, investors can visit their local Schwab branch or search the broker’s online or mobile FAQs to find answers to commonly asked questions. Schwab also offers investors access to licensed brokers and advisors.

Pros & Cons

Overview

Charles Schwab is one of the largest and most well-known full-service brokers in the industry, serving individual investors, registered investment advisors, and employers. Founded over 50 years ago, Schwab has been a leader in wealth management, continually innovating and growing, with a focus on the core company value of putting the client first. As part of its merger with TD Ameritrade in 2020, Charles Schwab relocated its corporate headquarters from San Francisco to Westlake, Texas. 

While Charles Schwab has long been a major broker, its acquisition of TD Ameritrade has bolstered the company in the area of customer service. Schwab is so confident with its level of customer service offered via telephone, online chat, and in-person branch locations that it offers a satisfaction guarantee to all clients. In addition to strengthening customer service, the TD Ameritrade acquisition also significantly increased the company’s ability to offer unparalleled investor education and a state-of-the-art trading platform. Schwab Trading powered by Ameritrade offers investors advanced trading simulators along with powerful charting and analytical tools.

Further, Schwab has been able to incorporate several hallmark elements of TD Ameritrade’s educational offerings, including a vast digital library of articles, coaching, videos, podcasts, live events, courses, and other helpful resources.One of the most anticipated additions to Schwab's lineup occurred on April 11, 2024, with the company announcing that futures and forex trading, along with a new Portfolio Margin feature, have been made available on its thinkorswim platform.
Then, on Oct. 30, 2024, the company announced more exciting news when it introduced access to overnight trading in S&P 500 and Nasdaq-100-traded stocks, as well as hundreds of additional exchange-traded funds (ETFs), 24 hours a day, five days a week (24/5).

Charles Schwab’s ability to provide wealth management across the spectrum of clients, from new investors to sophisticated and high-net-worth investors, with a plethora of platforms and investing options has also earned the company the title of best overall for beginner investors.

Best Broker for Ease of Trading Experience: E*TRADE

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• Account Minimum: $0
• Fees: No commission for stock, ETF, and mutual fund trades. Options are $0.50-$0.65 per contract, depending on trading volume.

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Why We Chose It

E*TRADE offers investors an intuitive desktop and mobile experience. The company has been able to integrate a powerful suite of easy-to-use tools that support both passive and active traders and investors.

Pros & Cons

Overview

TradePlus, the predecessor company of E*TRADE, was founded in 1982. In 1991, with money from TradePlus, the company founder created a new business, E*Trade Securities Inc., to provide deep-discount brokerage services. The broker grew steadily until the early 2000s, when the housing bubble burst and E*TRADE suffered losses. The company never really regained its footing—naming several different CEOs over the years—until merging with Morgan Stanley in 2020. E*TRADE is headquartered in Arlington, Virginia, with parent company Morgan Stanley headquartered in New York City. E*TRADE’s investing platform has always focused on making investing easy and available to the masses, an area that Morgan Stanley seemingly underserved, making this acquisition a mutually beneficial business move. 

E*TRADE has two robust trading platforms: E*TRADE and Power E*TRADE. E*TRADE is focused on any client wanting to simply invest and gain access to an all-inclusive experience of investing, banking, trading, and research. Power E*TRADE is designed with the active and advanced trader in mind. This type of investor will appreciate the speed and ease with which they can trade options, stocks, futures, and ETFs. This robust platform offers investors the abiity to get streaming quotes, track the markets, and perform technical analysis. 

Best Broker for Research: Merrill Edge

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• Account Minimums: $0
• Fees: $0 per stock trade. Options trades $0 per leg plus $0.65 per contract

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Why We Chose It

Merrill Lynch provides some of the most robust research in the industry, putting out proprietary reports on stocks, news, and market commentary, along with research from Morningstar and Lipper.

Pros & Cons

Overview

Merrill Lynch was founded in 1914 as an investment bank. E.A Pierce, which merged with Merrill Lynch in 1940, was the U.S.’s largest brokerage in the 1930s but struggled financially. Merrill Lynch grew and thrived until the housing crisis in the early 2000s brought growing scrutiny over questionable business practices and major liquidity issues. Losses stemming from Merrill’s heavy exposure to subprime mortgages and derivative products enabled Bank of America to take it over Merrill Lynch in 2008. Although the merger came from a need to shore up the company’s reputation and gain access to liquidity at a time when many other banks were failing, Merrill’s partnership with Bank of America has been a positive one.

Merrill Lynch launched Merrill Edge in 2010, presenting investors with an all-in-one platform to manage their banking and brokerage needs. Clients can be self-directed, work with financial advisors, or access portfolio management through Merrill Edge Guided Investing. Proprietary research tools, such as Stock Story and Portfolio Story, provide an uncomplicated way to obtain key information about a particular stock, its performance, and how it might fit into your portfolio strategy. These tools truly make Merrill Lynch an industry stand-out in the area of easy-to-understand research.

Best for Young Investors: Fidelity

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• Account Minimum: $0
• Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trades

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Why We Chose It

Fidelity offers a youth account, Fidelity Youth, that is unique within the industry. Fidelity Youth is geared toward 13- to 17-year-olds and provides teens with the ability to save, spend, and invest their own money while keeping parents in the loop.

Pros & Cons

Overview

Fidelity was founded in 1946 in Boston and has been headquartered there ever since. Founded on the idea of "take intelligent risks rather than follow the crowd," Fidelity has been able to continue to meet the evolving needs of its customers and implement innovative strategies to be competitive. In an industry full of innovative companies competing for the attention of a diverse population of traders and investors, Fidelity is also Investopedia's choice for best online broker overall because it delivers the most well-rounded product offering to suit the needs of nearly every investor.

One innovation that makes Fidelity stand out is the company’s dedication to reaching teen investors to educate them on investing. Unlike custodial accounts, where the custodian makes the investment decisions on the minor's behalf, Fidelity Youth accounts are teen-owned brokerage accounts, allowing the minor to make all the investment decisions. Besides the Fidelity Youth account—which caters to teens ages 13 to 17, cultivates interest in investing, and potentially helps Fidelity gain and retain lifelong clients—the company also has a strong social media presence on platforms such as TikTok and Discord, which are popular among younger generations.

The Bottom Line

Every investor is unique and has different financial goals, timelines, and requirements, so it is important to choose the broker that best fits the individual’s specific needs. We have looked at several companies that are great for beginner investors, but they all have nuanced platforms and products that are aimed at accommodating slightly different audiences.

Investors looking for a myriad of educational resources and accessible customer service will certainly appreciate Charles Schwab, which provides 24/7 customer service, access to representatives at local branches, and a vast library of articles, podcasts, and live educational seminars. Those looking for an easy-to-use platform or active traders can choose E*TRADE, which has an intuitive platform that offers investors several account amenities and investment product lines. Merrill Lynch has been around for a while and shines when it comes to providing investors with both proprietary and external research options. Fidelity has created a niche in the area of providing young investors with investment education and account amenities. Fidelity meets those young investors where they are, using apps and social media and providing account options that give teens the freedom to start investing while still keeping parents involved.

Compare the Best Online Brokers for Beginners

Trading vs. Investing

Generally, when people talk about investing, they are referring to the practice of purchasing assets to be held for a long period of time. Investors hold their assets long-term so their money can grow more quickly than it would in a standard savings account. That enables them to reach goals like affording a comfortable retirement.

In contrast, trading involves buying and selling assets in a short period of time with the goal of making quick profits. Trading is typically seen as riskier than investing, and new or inexperienced investors should engage in trading cautiously.

Before selecting an online broker to use, you'll need to ask yourself questions including:

• Am I a beginner? If so, you'll want to find a broker with solid education resources and ideally a simulated trading account that lets you practice without putting money at risk. You'll also want calculators and analysis tools to help you plan, invest, and manage your portfolio. The quality of tools and resources can vary widely by broker, but generally the larger brokers have wider selection.
• How much can I afford to invest right now? Some brokers require a larger initial investment to open an account and access the trading platform. If you have a small amount of money, you'll want a broker with a low or $0 account minimum.
• Am I a trader or an investor? While investors can usually get away with a web platform or app, the complex needs of traders generally need a customizable desktop platform with all the required bells and whistles.
• What kind of assets would I like to invest in? Brokers typically offer the most familiar securities, stocks, mutual funds, and exchange-traded funds (ETFs). Newcomers to investing may be surprised to learn that other presumably standard menu items like bonds and options are not offered by all online brokers. If you are interested in trading forex, futures, cryptocurrency, and so on, you will need to look to larger brokers with asset offerings far beyond the basics.

How to Pick a Brokerage

There are several things that you will need to consider when deciding which broker is right for you. 

Decide What Type of Brokerage Account You Want

When deciding the type of brokerage account that will meet your needs, you need to consider how involved you want to be, day-to-day, with your account. If you are a hands-off investor, you may opt for a brokerage that offers robo-advisor services; if you are more hands-on, you will likely prefer a standard brokerage account that gives you more control over individual investment picks. Another factor that influences the type of brokerage account you want is your vision of what your investing goals are. Depending on your investment needs, you may want a specialized account–such as an IRA or a custodial account–inside your brokerage account.

Consider Brokerage Fees and Commissions

While it is very common in the industry for a brokerage to offer $0-commission trades, other fees, such as for account maintenance, transfers, and ETFs as well as mutual funds, are still prevalent. Be sure to carefully review a company’s fee schedule to decide if any of your investments would incur the less obvious fees.

Evaluate Account Features

Some brokerages offer a very streamlined platform with basic account and goal-tracking features, while others provide sophisticated charting and research tools. Further, it is important to note that some brokers offer extensive educational resources, which can be particularly useful for any investor, not just beginners.

Know Your Investment Preferences

Are you looking to invest in stocks, mutual funds, and ETFs, or are you interested in alternative investments such as cryptocurrencies, options, or futures? Different brokers offer different investment products, so before you open an account, make sure the brokerage offers the types of investments that you are looking for.

Check Customer Service Options

Customer service levels vary from broker to broker. Find out if a brokerage you are considering offers access to a live representative via telephone or if communication is done via a chatbot or email. Also, take note of customer service hours to determine if you will have access beyond market hours.

How Beginners Can Learn to Trade Stocks In a Brokerage Account

Turning your newly-opened brokerage account into a profitable endeavor will require a lot of learning and a lot of practice. Depending on the brokerage you choose, you may have access to tools and knowledge to help you make your first trade, and to continue growing your trading knowledge and expertise. A good broker will provide:

• Educational webinars
• Videos on investing strategies
• Charting and stock analysis tools
• Articles and research from market strategists and experts

In addition to the tools that your brokerage may offer, you also need to implement the basic common sense rules of investing:

• Don’t try to time the market - focus on the long-term growth: While it may be tempting to try to jump into a stock when it hits a low, timing stock prices can be very difficult. Over time, the market tends to move in an upward direction. There will be ups and downs along the way, but in general, solid companies should see their stock value increase over time.
• Diversify your portfolio: Make sure to spread your investments out among several market sectors, growth and value stocks, as well as large cap and small cap companies. 
• Never invest money that you can’t afford to lose: The idea is to invest the money to make more money, but drawdowns can and will occur, and you need to be prepared. If you need the money that you are investing in the short term—for example, to use as a down payment when buying a home or to pay for your child’s college education—then you don’t want to have those funds tied up in an investment. You only want to invest money that you either don’t need right away, that you can afford to lose, or that you have time to ride out a downturn in the market.

Frequently Asked Questions (FAQs)

Terms Beginners Should Know

• Cash account: A cash account is a brokerage account in which a customer is required to pay the full amount for securities purchased, and buying on margin is prohibited. The Federal Reserve's Regulation T governs cash accounts and the purchase of securities on margin. This regulation gives investors two business days to pay for securities.
• Margin account: A margin account is a brokerage account in which the broker lends the customer cash to purchase stocks or other financial products. The loan in the account is collateralized by the securities purchased and cash, and comes with a periodic interest rate. Because the customer is investing with borrowed money, the customer is using leverage, which will magnify profits and losses for the customer.
• Retirement account: Brokerages offer many types of retirement accounts, often including traditional individual retirement accounts (IRAs), Roth IRAs, and 401(k)s.

Anyone who would like to get involved in the stock market should know some basic terminology:

• Stock: A stock (also known as an "equity") is a type of security that represents ownership in the issuing corporation. This proportion of ownership is a percentage of the company’s total number of shares–which are units of stock–issued. Stock entitles each stockholder to that proportion of the corporation's assets and earnings.
• Price-to-earnings ratio: The price-to-earnings ratio (P/E ratio) is a ratio for valuing a company that measures its current share price relative to its earnings-per-share (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
• Market capitalization: Market capitalization, commonly referred to as "market cap," refers to the total dollar market value of a company's outstanding shares. Market cap is calculated by multiplying a company's outstanding shares by the current market price of one share.
• Dividend: A dividend is the distribution of reward from a portion of the company's earnings and is paid to a class of its shareholders.
• Exchange-traded fund (ETF): An exchange-traded fund (ETF) is a collection of securities—such as stocks—that typically tracks an underlying index.
• Bond: A bond is a fixed-income instrument that represents a loan made by an investor to a borrower (typically a corporation or government). A bond could be thought of as an I.O.U. between the lender and borrower, which includes the details of the loan and its payments.
• Mutual fund: A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities such as stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors.
• Limit order: A limit order is a pre-specified price for buying or selling a security. For example, if a trader is looking to buy XYZ stock but has a limit of $14.50, they will only buy the stock at a price of $14.50 per share or lower. If the trader is looking to sell shares of XYZ stock with a $14.50 limit, the trader will not sell shares until the price is $14.50 or higher.  
• Market order: A market order is a request by an investor—usually made through a broker—to buy or sell a security at the best available price in the current market. It is widely considered the fastest and most reliable way to enter or exit a trade and provides the most likely method of getting in or out of a trade quickly. For many large-cap liquid stocks, market orders typically fill nearly instantaneously.

If you're interested in learning more about the stock market, you can check out our guide to investing.

How We Picked the Best Brokers for Beginners

Providing readers with unbiased, comprehensive reviews of online brokers and trading platforms is a top priority for Investopedia. We combined our industry research, subject matter expertise, and investor survey data to guide the research and weightings for our 2024 online broker awards. To collect the data, we sent a digital survey with 110 questions to each of the 26 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Feb. 19 to March 19, 2024.

We then developed a proprietary model that scored each company to rate its performance across 11 major categories and 89 criteria to find the best online brokers and trading platforms. The score for each company’s overall star rating is a weighted average of the criteria in the following categories:

Additionally, during our 2024 research, many of the companies we reviewed gave us live demonstrations of their platforms and services via video conferencing methods and also granted our team of expert writers and editors access to live accounts so they could perform hands-on testing.

Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top online brokers and trading platforms.

Learn more about how we review online brokers.