4 Best Online Stock Brokers
for Beginners in 2020

Top Companies to Consider

Investing is one of the best ways to grow your money. But if you’re not well-versed in trading, the stock market may seem like a dark chasm that you have no control over. That’s why you need the best online stock broker for beginners to guide you through the process of building a solid investment strategy.

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Top 4 Stock Broker Companies for Beginners 2020

1. TD Ameritrade

Founded in 1975, TD Ameritrade is a clear leader among investment firms. After launching its first online trading platform in 1995, this Omaha-based company quickly became the go-to option for inexperienced investors and trading veterans alike. Nowadays, TD Ameritrade stands out for its $0 commissions on stock, options, and ETF trades; unmatched educational resources; and easy-to-use platforms. Full Review

  • 2 trading platforms & mobile apps
  • Responsive customer service
  • No minimum balance

Founded in 1975, TD Ameritrade is a clear leader among investment firms. After launching its first online trading platform in 1995, this Omaha-based company quickly became the go-to option for inexperienced investors and trading veterans alike. Nowadays, TD Ameritrade stands out for its $0 commissions on stock, options, and ETF trades; unmatched educational resources; and easy-to-use platforms. Full Review

2. E*TRADE

An online brokerage pioneer, E*TRADE offers multiple online and mobile-based trading platforms to serve investors with varying levels of experience. Beginners are especially fond of its $0 commissions on all stock, options, and ETF trades and the educational resources it provides. The company has recently become a subsidiary of Morgan Stanley. Full Review

  • Advanced apps for iOS and Android
  • Many investment options
  • Extensive educational resources

An online brokerage pioneer, E*TRADE offers multiple online and mobile-based trading platforms to serve investors with varying levels of experience. Beginners are especially fond of its $0 commissions on all stock, options, and ETF trades and the educational resources it provides. The company has recently become a subsidiary of Morgan Stanley. Full Review

3. Ally Invest

Operating since 2017, Ally Invest is one of the latest additions to the online trading industry. The brokerage firm was founded by Ally Financial, which also offers banking and lending services. Thanks to its $0 commission policy on eligible US securities, an easy-to-use platform, and multiple educational resources, Ally Invest has become a favorite among new investors. Full Review

  • No minimum balance
  • Excellent web-based platform
  • Robust research and trading tools

Operating since 2017, Ally Invest is one of the latest additions to the online trading industry. The brokerage firm was founded by Ally Financial, which also offers banking and lending services. Thanks to its $0 commission policy on eligible US securities, an easy-to-use platform, and multiple educational resources, Ally Invest has become a favorite among new investors. Full Review

4. Merrill Edge

Launched in 2010 and owned by Bank of America, Merrill Edge is a relatively recent addition to the world of online trading. Best suited for beginners and intermediate-level long-term investors, this online broker has already welcomed more than 500,000 traders. The company offers cutting-edge trading platforms, competitive fees, and an unmatched rewards incentive. Full Review

  • Customizable platform
  • Generous rewards program
  • Excellent customer support

Launched in 2010 and owned by Bank of America, Merrill Edge is a relatively recent addition to the world of online trading. Best suited for beginners and intermediate-level long-term investors, this online broker has already welcomed more than 500,000 traders. The company offers cutting-edge trading platforms, competitive fees, and an unmatched rewards incentive. Full Review

2020’s Best Online Stock Brokers for Beginners

  • TD Ameritrade
Best for comprehensive educational resources
  • E*Trade
Best for ease of use
  • Ally Invest
Best for low fees and commissions
  • Merrill Edge
Best for high balances

 

Detailed Reviews

TD Ameritrade
TD Ameritrade

BEST FOR

those in need of comprehensive educational resources

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  • Stock trading costs: $0
  • Account fees: No annual, inactivity, or partial transfer fees; $75 full account transfer fee
  • Account minimum: No requirements
  • Trading platform: Downloadable software, online, mobile app
  • Customer support channels: Email, phone, chat, Amazon Alexa, Facebook Messenger

Overview

Founded in 1975, TD Ameritrade is one of the oldest and most reputable of America’s online brokerage firms. Considered one of the best choices for inexperienced investors, this Omaha-based company is well-known for its easy-to-use trading platforms, comprehensive online tutorials, and hundreds of brick-and-mortar educational centers located all across the United States.

Fees and Commissions

Low fees and commissions are one of this online brokerage company’s biggest selling points. TD Ameritrade may have been around for decades, but its pricing model was updated in the last quarter of 2019. Today, the investment firm doesn’t charge any fees for stock, ETF, and options trades, while the per-contract options charge is only $0.65.

You can use the platform on your own or trade with a little professional help. Assistance from a broker costs $25, while TD Ameritrade’s interactive assistant offers help over the phone for $5 per trade.

This online stock broker doesn’t require you to maintain a minimum account balance. As far as account charges go, there are no annual or inactivity fees. Also note that a partial account transfer doesn’t incur any fees, while a full transfer comes with a $75 charge.

Trading Technology

A clear leader among stock trading firms, TD Ameritrade stands out thanks to its powerful technology. The company’s most popular trading platform, Thinkorswim, used to be a standalone product that independent brokers could license. Thinkorswim is best suited for more experienced users, but beginners can also benefit from this online trading platform and its market analyses, test strategies, idea generation, and risk/reward monitoring.

If you are an absolute beginner, TD Ameritrade’s online platform is the way to go. Accessible directly from the Ameritrade website, this option works as a shortcut for a selection of third-party educational resources and for research and planning tools such as CRFA, Morningstar, and Market Edge. The platform also offers a portfolio tool with pre-built investment models.

If you prefer using a smartphone rather than a computer for your trading ventures, you’ll be happy to learn that TD Ameritrade also has options for iOS and Android users. Considering that these stock trading apps also work on tablets and certain smartwatches, trading on the go has never been easier.

Educational Resources and Ease of Use

Along with a state-of-the-art toolset, financial education is also a vital component of TD Ameritrade’s offering. The brokerage company’s online resources feature different learning paths – from beginner to advanced – and can help you understand everything from simple investment concepts to complicated derivative strategies.

Another great thing about this stock broker’s educational resources is that you don’t have to follow a predetermined curriculum. Instead, you can choose to learn anything you want by engaging with TD Ameritrade’s live-stream seminars and presentations, reading articles, and testing your knowledge with quizzes.

In addition to online lessons, the site also lets you test-drive the platform and all of its features. The feature called PaperMoney gives you an opportunity to invest $100,000 of “practice funds” to explore different options and investment strategies over a 60-day trial period.

Lastly, if you prefer an in-person experience, you can pay a visit to one of almost TD Ameritrade’s 300 brick-and-mortar educational centers.

Customer Support

We wouldn’t consider this company to be the best online stock broker for beginners if it didn’t have excellent customer support. Whether you contact TD Ameritrade via email, phone, live chat, Amazon Alexa, or Facebook Messenger, you can rest assured that your questions will be answered and your problems solved in a matter of minutes.

Our Verdict

A rare broker that does an excellent job of covering all the bases for a wide variety of users, TD Ameritrade can easily meet the needs of both experienced investors and beginning traders.

In addition to $0 commissions on online stock trades, this investment company offers an impressive list of services such as high-quality research, hands-on online investing courses, and portfolio-building guidance. These are especially beneficial to those on the hunt for the best online stock trading site for beginners. Overall, the provider’s cutting-edge platforms place it among our top picks.

Pros Cons
Two trading platforms with mobile apps High fees on broker-assisted trades
Commission-free stock, options, and ETF trades Low interest rate on uninvested cash
Responsive customer service
Comprehensive library of online educational resources
E*Trade
E*Trade

BEST FOR

those who value ease of use

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  • Stock trading costs: $0
  • Account fees: No annual or inactivity fees; $25 partial transfer fee; $75 full account transfer fee
  • Account minimum: No requirements
  • Trading platform: Online, mobile app
  • Customer support channels: Email, phone, chat, social media

Overview

E*TRADE is an online brokerage pioneer that recently became a subsidiary of Morgan Stanley. Thanks to its $0 commissions, multiple professional-level trading platforms, huge library of educational resources, and helpful guidance tools, this company is rightfully considered one of the best brokers for beginners and experts alike.

Fees and Commissions

Much like most of its direct competitors, E*TRADE doesn’t charge commissions on stock, ETF, equity, and options trading. Although there is no base fee, options do have a standard $0.65 per-contract charge (which drops to $0.50 with 30 or more trades on a quarterly basis). Trading penny stocks comes with a $6.95 fee. Note that there’s also a per-share electronic communication network (ECN) fee of $0.005 which you can avoid if you make sure to trade during market hours.

Another good thing about this online stock trading site is that it doesn’t charge annual maintenance or inactivity fees. However, a full account transfer will cost you $75, while a partial one has a fee of $25.

Trading Technology

As far as trading platforms go, all of E*TRADE’s solutions are completely web-based. In other words, you don’t need to download and install anything. As long as you have a desktop computer, a laptop, or a smartphone that connects to the internet, you’re all set to buy stocks online.

As one of the best investment companies, E*TRADE has three trading platforms: E*TRADE Web, E*TRADE Pro, and Power E*TRADE. For this review, we’ll focus on Power E*TRADE, as this option is the best fit for an inexperienced investor.

Although it is a platform for beginning brokers, Power E*TRADE still comes with several powerful features. There are more than 30 drawing tools, more than 100 technical studies, trading ladders, customizable options-chain views, and streamlined trade tickets. New traders are encouraged to explore all the possibilities this stock trading platform offers while enjoying a user-friendly interface that provides lots of useful information along the way.

Educational Resources and Ease of Use

Another reason E*TRADE deserves a spot among the best investment firms for beginners is its quick and easy account setup process. After just four simple steps you’ll have a trading strategy in place and be ready to start investing. Although the application process is easy to understand, keep in mind that there are very few additional explanations on the site. Many users feel that the mobile app is a better choice for that reason.

As far as educational opportunities go, E*TRADE proves again that it provides the best trading platform for beginners. Online users can read articles and view webinars on topics such as options trading, portfolio diversification, and technical analysis. There’s also a paper trading platform. Modeled after Power E*TRADE, it allows users to open a demo account where they can practice their skills and test strategies without having to use real money.

Additionally, in-person events are regularly held at the investment company’s branches. To top it off, E*TRADE has partnered with Morningstar, an independent investment research firm, to offer online courses that cover everything from stocks 101 and understanding different types of brokerage accounts to building an emergency fund.

Customer Support

In terms of support, E*TRADE offers all the typical communication channels, including phone, email, and live chat. Additionally, the company’s customer service representatives can be reached via popular social media platforms. Clients who make sizeable investments through their E*TRADE accounts get access to priority support.

Another good thing about this stock trader’s platform is that it offers excellent in-person client service, with 30 brick-and-mortar locations staffed by financial consultants and trading advisors.

Our Verdict

E*TRADE’s innovative trading technology, a wide range of useful investment tools, and the absence of transaction fees on stock, ETF, and options trades appeal to all types of investors. Meanwhile, comprehensive educational resources attract beginner traders. Power E*TRADE, one of the best online trading platforms, and its corresponding mobile app are especially popular among investors who are just getting started. Overall, if you’ve just started exploring the world of online investments, E*TRADE will treat you well.

Pros Cons
Advanced apps for iOS and Android Website has some navigation issues
Wide selection of investment options Unavailable to traders outside the US
Extensive educational resources
24/7 multi-channel customer support

Ally Invest
Ally Invest

BEST FOR

low fees and commissions

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  • Stock trading costs: $0
  • Account fees: No annual or inactivity fees; $50 account transfer fee
  • Account minimum: No requirements
  • Trading platform: Online, mobile app
  • Customer support channels: Email, phone, chat

Launched in 2017 as a part of Ally Financial, a diversified financial services firm that also offers banking and lending, Ally Invest is one of the latest additions to the US online trading industry. It’s built on the foundation of TradeKing, a brokerage platform that the company purchased. Ally has come a long way to become one of the best online stock brokers for new investors and experienced traders alike. The company is well-known for its $0 commissions, rich selection of trading features, and exceptional customer service.

Fees and Commissions

When it comes to costs, Ally Invest is one of the market’s most competitive investment websites. As of 2019, there are no commissions for eligible US stock, options, and ETF trades. Additionally, the per-contract charges on options trades have dropped from $0.65 to $0.50, a reduced fee previously available only to investors who had a minimum balance of $100,000 or made at least 30 trades per quarter. Thanks to these changes, Ally Invest has earned a spot among the best online brokerage companies for both beginners and active traders.

Ally doesn’t require you to keep a minimum balance in your account. There are also no annual maintenance or inactivity charges. However, Ally Invest charges a $50 account transfer fee on both full and partial transfers.

Trading Technology

Ally Invest may offer one of the cheapest stock broker solutions. However, that doesn’t mean that its investing tools are lacking. The company’s browser-based platform features a customizable dashboard, real-time streaming data and quotes, free research and screening tools, quick trading capabilities, and easy access to all of the broker’s planning tools, including options pricing calculators and strategy scanners.

Clients who prefer trading on the go and tend to use multiple devices to place orders or monitor changes will be happy to hear that Ally’s web-based solution doesn’t require any downloads or installations. All you need is your password and an internet connection.

There’s also a mobile app for iOS and Android devices that comes with advanced account functions such as trading, tracking, and quotes. As one of the best online trading sites, Ally also supports forex trading and even offers an app dedicated solely to the foreign exchange market (Ally Forex).

Educational Resources and Ease of Use

The Learn section on Ally’s website features an array of videos and articles that cover investment and personal finance topics. Inexperienced investors are especially appreciative of the company’s online and live webinars, where they can learn all about simple and advanced trading strategies. As the best online stock broker for beginners, Ally Invest holds at least 15 webinars a month featuring not only in-house experts but also internationally known financial advisors.

Convenience is another one of Ally’s strong points. Its platforms are neatly designed and easy to navigate. However, unlike most of its competitors, Ally Invest doesn’t offer a demo account.

Customer Support

Should you stumble upon any issues or have any questions, you can reach out to Ally’s support team via phone, email, and live chat. The company’s customer-service representatives are available from 7 a.m. until 10 p.m. Eastern time seven days a week. Given that Ally is a digital-only financial services company, there aren’t any branches that clients can visit.

Our Verdict

Considering its focus on high-quality and easy-to-use tools that come at an affordable price, Ally Invest may very well be the best stock trading site for beginners. With no minimum balance requirements, it’s easy for new investors to get started, while all traders appreciate the company’s commission-free trading rule on US securities. However, keep in mind that Ally Invest has no physical branches or demo account features.

Pros Cons
No minimum balance No brick-and-mortar branches
Excellent web-based platform No demo accounts
Robust research and trading tools
Responsive customer service
Merrill Edge
Merrill Edge

BEST FOR

customers with high balances

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  • Stock trading costs: $0
  • Account fees: No annual or inactivity fees; $49.95 full account transfer fee
  • Account minimum: $0
  • Trading platform: Online, mobile app
  • Customer support channels: Phone, email, live chat

Launched in 2010 by the Merrill Lynch subsidiary of Bank of America, Merrill Edge is among the newest and best brokerage firms we’ve come across. Since its founding, this investment platform has already welcomed more than half a million traders. Merrill Edge is an especially good choice for Bank of America customers because existing clients don’t get charged anything to open and connect a brokerage account.

Fees and Commissions

Like its competitors, Merrill Edge offers clients commission-free online stock, options, and ETF trades. Options trades carry an industry-standard per-contract charge of $0.65. Should you request assistance from a broker, you’ll be charged $29.95 per trade. The company charges no annual maintenance or inactivity fees. However, there’s a $49.95 full account transfer fee.

As one of the best brokerage account providers, Merrill Edge has a Preferred Rewards program that gives you access to benefits such as higher interest rates on savings accounts, reduced mortgage origination fees, and lower rates on auto loans.

Not everyone can qualify for these discounts and promotions. In addition to a Merrill Edge investment account, an eligible candidate must have a Bank of America checking account and maintain an average combined balance of at least $20,000 over a three-month period.

Trading Technology

As one of the best online stock trading companies, Merrill Edge offers a website-based solution and an active trader platform. Well-suited to beginners’ needs, the website-based trading platform is clean and intuitive. It makes sorting through stocks, mutual funds, bonds, and ETFs quite easy. Many users praise the “quick trade” feature which lets you make a stock or ETF trade from absolutely any page on the site, as long as you’re logged in.

Best suited for active traders but available to all Merrill Edge customers, MarketPro comes with everything you’d expect from the best trading platform – a customizable dashboard, alerts, interactive charts, streaming data, news, and more.

If you prefer trading platforms that are available on the go, you’ll be happy to hear that all features of the web version can also be accessed using mobile devices.

Educational Resources and Ease of Use

Merrill Edge adheres to very high customer experience standards. Beginning traders applaud the platform’s educational resources and planning tools. Not only is the site intuitively laid out and easy to get around, but it also inquires about your expertise level upon registration and suggests learning topics accordingly.

Although the company doesn’t offer integrated discussion boards or live-streamed webinars, it’s still considered one of the best online brokers when it comes to educational opportunities. Users can watch video tutorials, read articles, take short courses, and test their knowledge through quizzes. The best thing about Merrill Edge’s learning opportunities is that all resources are also available through the mobile app.

Customer Support

Customer service is another area where this broker excels. Support representatives can be contacted 24/7 via phone, email, and live chat. In our experience, agents are quick to respond and provide detailed but easy-to-understand answers to all questions. Because this free stock trading platform is part of Bank of America, there are more than 2,000 brick-and-mortar locations you can visit if you require face-to-face support.

Our Verdict

Given its excellent investment selection, high-quality research, and quick-to-respond customer service, Merrill Edge is a solid choice for traders of all skill levels. New investors will especially value its comprehensive educational resources and easy-to-use trading platform. With so many incentives, especially for current Bank of America clients, it’s easy to see why both beginning traders and seasoned investors consider Merrill Edge one of the best brokerage account providers.

Pros Cons
Integrated with Bank of America High fee for broker-assisted trades
Customizable platform No cryptocurrency trading
Generous rewards program
Excellent customer support

SpendMeNot’s Methodology

An online brokerage account is a financial account that allows you to buy and sell stocks, ETFs, mutual funds, bonds, and other securities. Provided by online stock brokers – firms or individuals licensed to buy and sell securities through market exchanges – these investment accounts allow you to place orders from anywhere in the world. All you need is access to the internet.

Choosing the best stock trading platform is never easy, especially if you’re an absolute beginner. Luckily, we’re here to help by identifying all the key features you should consider when comparing different brokerage account providers.

The market is brimming with companies claiming to offer good investments for beginners. But no two companies are the same, and only a select few will be able to meet your needs. That’s why it’s important to come up with a strict evaluation methodology and stick to it.

Here are the steps we took to determine the best stock brokerage firms for beginners.

First, we read through dozens of investment company reviews online. We used what we learned to create a comprehensive list of the top competitors among online brokers.

Next, we researched those investment firms according to essential criteria: fees and commissions, trading technology, educational resources, the application process, ease of use, and customer support. That data allowed us to rate the brokers and make a pros-and-cons list for each one.

Finally, we picked the most impressive brokerage firms and compiled a shorter list containing only the top-rated options. We also made sure to take all the shortlisted platforms for a spin, opening multiple accounts and getting in touch with customer support to assess the agents’ availability, responsiveness, and knowledge.

How to Choose the Best Online Stock Broker for Beginners

Know Your Needs

As a beginner trader, you probably won’t need advanced features such as an advanced trading platform. Chances are, you’ll prioritize comprehensive glossaries, basic educational resources, quick and easy access to customer support agents, and the ability to test the technology before committing real funds. Many brokers offer all of these features and benefits at no charge. You should make sure that the provider you choose is no different.

Determine the Costs

While most brokers offer a similar menu of investment options such as individual stocks, mutual funds, exchange-traded funds, options, and bonds, trading commissions and additional fees can vary. A provider may advertise its service as a free brokerage account, but that doesn’t necessarily mean that you won’t have any charges. In addition to trading commissions, investing sites may also charge account-related fees such as inactivity, annual maintenance, and full or partial account transfer costs. Some providers also offer assistance from a human broker at a cost of $15 to $50 per trade.

Research Account Minimums

Top-rated stock brokers like TD Ameritrade, Merrill Edge, E*TRADE, and Ally Invest don’t require you to keep a minimum balance in your investment account. Still, some providers won’t let you get started unless you make an initial investment of $500 or even more.

Make the Most of Promotions

Online brokers often entice new clients with deals such as rewards programs, cash bonuses on certain deposit amounts, or commission-free trades. While it isn’t a good idea to choose an online stock broker solely because of its promo offer, it’s certainly something that you should consider.

FAQ

What is the best brokerage account for beginners?

If you don’t have lots of experience and you’re comparing brokerage accounts, you should make sure to evaluate your top choices by looking at the provider’s fees and commissions, educational resources, trading platforms, and customer service channels.

What is the cheapest online stock broker?

Top stock brokers charge low commissions or no fees at all for online stock, ETF, and options trading. Top providers impose reasonable account transfer costs and don’t charge annual maintenance or inactivity fees. Based on our research, the list of the most affordable stock brokers includes TD Ameritrade, E*Trade, Ally Invest, and Merrill Edge.

 

How do I begin investing in stocks?

Start by choosing the best online stock broker for beginners. Make sure that the broker of your choice offers low fees, an easy-to-use platform, easy access to support staff, plenty of educational resources, and a demo account that you can use to test both your skill and the platform.