Top rated stock brokers for new investors. The best online brokerage firms for beginners.

Top Brokers for New Investors

Let's take a look at the best online investing firms for beginner investors in 2024:

-  Webull (read review) offers $0 commissions on stock, option, ETF, and cryptocurrency trades. There are no account fees, making it hard to beat.

Webull's website is user-friendly, and all the tools are straightforward and easy to use.

Promotion link: Grab your last chance to get up to 40 free stocks when you deposit at Webull!

Open Webull Account

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-  Robinhood (read review) offers an easy-to-use app with a lot of great cash management services. Robinhood also has $0 pricing for stock, ETF, options, and cryptocurrency transactions.

Promotion link: Up to $200 free stock + 1% IRA match + transfer fee refund at Robinhood.

Open Robinhood Account

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-  Charles Schwab (read review) offers $0 commissions on stocks and ETFs and a $49.99 rate on mutual funds. There’s no minimum deposit to open an account at Schwab. As one of the most established brokerage firms in the U.S., it has an excellent reputation and provides a wide range of educational resources.

Promotion link: Satisfaction guarantee and $0-fee trades at Charles Schwab.

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Recommendations

If you are new to investing and looking for a comprehensive option, choose Charles Schwab. It’s a top choice if you want to invest with a well-known firm offering advanced trading and research tools.

Robinhood is a great choice for beginners looking for an IRA account, high cash interest, and cryptocurrency options.

Webull is ideal for new investors wanting the lowest possible pricing.

How to Choose Your First Ideal Brokerage Company

For anyone new to investing, the stock market can seem complex and hard to navigate. New investors may feel overwhelmed by trading platforms, fluctuating stock prices, and unfamiliar risks. But, like any skill, investing can be learned with practice and understanding.

The first and very important step is choosing a brokerage company that is user-friendly and beginner-friendly. There are many options today. Some companies manage money handed to them by clients, while others cater to experienced traders comfortable with complex platforms.

There are also “starter” brokerage companies tailored to new investors. They offer learning resources like online tutorials, webinars, and practice trading tools to help gain experience without risk. Some brokers have online communities where investors share tips, and some even allow beginners to make trades with live broker assistance, without additional fees.

Overview of Stock Market Brokerage Companies

Stock market brokers offer both beginner and experienced investors a range of products and services. When you open an account, you gain a financial partner who is there to help you succeed. Some brokers may provide a more extensive service for an additional cost, but it’s important to understand what’s available to you.

Financial Advice

Some brokers offer investment advice for an extra fee, others provide basic advice for free, and some don’t offer advice at all. If you need help making investment decisions, choose a broker that provides this service.

Betterment, for example, gives customers in its Plus plan one call per year with a licensed financial advisor. This robo-advisory service costs 0.40% annually and requires a $100,000 minimum deposit. The Premium plan (50 basis points per year) offers unlimited calls with advisors.

Many brokers now offer robo management, where a program makes investment decisions. Robo services often cost less than human-advised accounts. Charles Schwab’s robo advisor charges 0.30% annually with a $5,000 minimum. M1 Finance offers this service for free.

Fidelity provides basic investment advice over the phone at no charge. This includes general guidance on buying or selling securities.

For a more personalized experience, traditional firms like Edward Jones and Raymond James have local offices with advisors who can help create a tailored financial plan. This model can cost up to 2% of assets in some cases.

Trading Technology

If you're investing on your own, having good trading tools can help you place orders and spot investment opportunities. Some brokers, like TradeStation and Charles Schwab, offer advanced desktop platforms with powerful charting and screening tools, which can be useful for making your own trading decisions.

Some brokerage firms charge for using their trading tools or require minimum account balances. TradeStation, for example, provides its software for free, but there is an annual account fee. This fee is waived if you maintain at least $2,000 in your account or make 5 trades a year.

The quality of trading tools can vary significantly. Charles Schwab's advanced thinkorswim platform, for example, is much more robust than JPM's basic platform. Some brokers, like WellsTrade and Sofi Invest, don’t offer a desktop platform at all.

Educational Materials

Understanding the basics of finance is important before making trades. Many brokers provide learning materials, but the quality and quantity vary widely. Schwab, for example, has a comprehensive library of resources, including articles and videos covering topics like retirement, estate planning, and securities. Other brokers, like Robinhood, offer very limited educational resources.

New Investor Brokers Pricing

All brokers have a fee and commission schedule that outlines the costs for specific services. Mutual fund commissions are one of the more common charges, and costs can vary widely. For example, Firstrade does not charge for mutual fund trades, while Schwab clients may pay up to $49.99 per transaction.

Some brokers also charge fees just for maintaining an account. Fees may apply for transferring an account, wiring funds, or closing a retirement account. Be sure to review a broker’s pricing schedule, which is usually available on its website, before opening an account.

Customer Support

Every broker offers some level of customer support, though availability varies. Firstrade does not offer 24/7 support but has online chat on its website. Merrill Edge provides 24-hour service but lacks an online chat feature. E*Trade has physical branches, while Vanguard operates entirely online. Make sure your broker offers the support tools you need before making a decision.

Range of Funds

Mutual funds and ETFs are popular investment options. All discount brokers offer ETFs, but not all provide mutual funds. M1 Finance, for instance, does not offer mutual funds, though it supports ETF trades.

For brokers that offer mutual funds, the variety, fund family options, and costs differ. Merrill Edge offers under 5,000 mutual funds, while Schwab provides access to over 10,000.

Banking Features

Having banking features in your brokerage account can be convenient for managing cash. Some brokers offer these features for free. Merrill Edge, for instance, provides checks and a debit card at no cost. Other brokers, like WellsTrade, charge for these services; WellsTrade customers, for example, pay $100 annually.

Best Brokerage Firms For Beginners Summary

These are the standard features that the best brokerage firms offer for beginner investors and experienced traders alike. While they are standard, the quality and cost of these services can vary greatly between brokers. Take the time to research before choosing a broker.

If you're still unsure where to start, Charles Schwab is a great option for beginners.