Best Brokerage Firms For Beginners in 2016

Top online stock broker companies for new investors with best value, extensive research, and great educational tools for beginner investors and traders.

Investing can be intimidating to those of us who have no experience. Picking stocks and mutual funds, reading charts, diversifying a portfolio, and managing accounts can be overwhelming for somebody who is just getting started. Additionally, here are many online brokerage firms to pick from - each with their own fees, tools, websites, and trading platforms. The cost of choosing a brokerage company that is easy-to-use and helpful to new investors can be significant - especially for those novice investors who can put broker's advice, lessons and support to work over a very long periods of time. If you are looking for the best IRA provider for new investors visit best IRA accounts for beginners. Below we list some of the best online brokerage firms for beginner investors in 2016.

Best Brokerage Firm For Beginners: Scottrade

Scottrade brokerage firm rating
  • Stocks & ETFs: $7
  • Options: $7 + $0.70 per contract
  • Mutual Funds: $17

Minimum to open: $2,500 for a cash account, $0 for an IRA.
Investments: Stocks, ETFs, Options, Mutual Funds, Bonds, CDs, Treasuries, OTS Stocks.

Scottrade Advantages

  • Clear and straightforward fees
  • Broad selection of investments
  • No account set up, maintenance or inactivity fees
  • No cost IRAs
  • Over 14,500 mutual funds, including 2,637 commission-free NTF funds
  • Free dividend reinvestment program (FRIP)
  • Free real-time streaming quotes and charts for non-professionals
  • Free online educational resources and free live investment workshops
  • Free online banking through Scottrade Bank
  • Over 500+ locations throughout the country
  • Ranks highest in the J.D. Power 2016 U.S. Self-Directed Investor Satisfaction StudySM
  • After-hours trading

Scottrade Disadvantages

  • Additional 0.5% of the principal value to commissions for stocks priced under $1

Consistently rated as one of the online stock brokers year after year, Scottrade combines the convenience of an online broker with the comfort of a local business, providing over 500 branches across the entire US. Firm's selection on mutual funds cannot be beat, with over 14,500 to choose from. Almost all other forms of investments are available to be bought and sold on the platform as well. The website and mobile platform are not flashy, but easy to navigate and pick up quickly for those who are just starting out.

Open an account: $2,000 in Cash Bonus and 50 FREE Trades When You Open a Scottrade Account.

Scottrade Review »

Best Brokerages For Beginners: TradeKing

TradeKing brokerage firm rating
  • Stocks & ETFs: $4.95
  • Options: $4.95 + $0.65 per contract
  • Mutual Funds: $9.95

Minimum to open: $0 for a cash account, $0 for an IRA.
Investments: Stocks, ETFs, Options, Mutual Funds, Bonds, CDs, Treasuries, Forex.

TradeKing Advantages

  • Very low commissions
  • Excellent customer support via email, phone and chat
  • Trader Network: an online community of investors
  • Customizable trading platform with responsive design
  • Free DRIPs/Dividend Reinvestment plans (whole and fractional shares)
  • Free real time streaming quotes for active traders
  • Free access to MarketGrader's research reports
  • Extensive educational resources
  • Extra hours trading

TradeKing Disadvantages

  • A single source of third-party research

Pricing on TradeKing is some of the best in the business. There is no minimum to open an account. There are no hidden fees. Stocks and ETFs can be traded for just $4.95. What may be most important for the new investors is the education center TradeKing provides, which allows users to gain more knowledge, and research strategies for investing. There is even a section dedicated to “Rookies” where beginners can get the basics on everything from bonds to options trading strategies. Another great feature is their Trader Network, which provides an online community forum to discuss trading ideas and tools with other investors.

Open an account: Open a TradeKing Account and Get $1,000 in Free Trade Commissions.

TradeKing Review »

Best Brokerage Firm For Beginners: TD Ameritrade

4-star brokerage firm rating
  • Stocks & ETFs: $9.99
  • Options: $9.99 + $0.75 per contract
  • Mutual Funds: $49.99

Minimum to open: $0 for a cash account, $2,000 for an IRA.
Investments: Stocks, Options, ETFs, Bonds, Mutual Funds, Futures, Forex.

TD Ameritrade Advantages

  • No inactivity or maintenance fees
  • No-fee IRA accounts
  • Wide range of investing options
  • Objective, outstanding third-party research from trusted sources
  • Sophisticated trading platforms, Thinkorswim and Trade Architect, free of charge
  • Over 13,000 mutual funds
  • Over 101 commission-free ETFs
  • Free Dividend Reinvestment Plans (DRIPs)
  • Virtual trading
  • Great customer service
  • Over 100 local branches

TD Ameritrade Disadvantages

  • Very high trading commissions

Out of all the names on this list, TD Ameritrade is the most well-known for those with little to no investing experience. Being a bank and financial institution with branches all across the eastern part of the US and Canada, TD Ameritrade will be a more reassuring place to do business for those who are intimidated by online-only options. There is a wide array of investment options which even includes preferred stock and money market accounts. Additionally, the broker provides over 100 commission-free ETFs which is a great added bonus for investors.

The Thinkorswim Trading Platform at TD Ameritrade has received multiple awards on its usability and was rated the № 1 trading platform by Barron’s. Users are also able to stream CNBC Plus via live video while looking up trade research and analysis simultaneously. The combination of high tech and professional grade research tools with a long history in the brokerage industry make TD Ameritrade a solid choice for any beginner investor.

Open an account: Join TD Ameritrade. Trade free for 60 days + get up to $600.

TD Ameritrade Review »