Investing is one of the best ways to grow your money. But if you are new to investing, you may find it hard to understand. Luckily, online brokerage accounts can help simplify the process and have you investing your hard-earned money in no time.
Brokerage accounts are a type of financial account used to buy stocks, mutual funds, ETFs, bonds, and other investments. These accounts come in several forms, including traditional taxable accounts and tax-advantaged retirement accounts.
If you don’t know where to start, don’t worry! Read on to find the best online brokerage account for you and your finances.
Overview of the best online brokerage accounts for beginners
|Public||Learning from other investors|
|Robinhood||Investors on a budget|
|J. P. Morgan Self-Directed Investing||In-person support|
|E*TRADE||Wide range of available investments|
|TD Ameritrade||Active trading platform|
|Personal Capital||Human investment advising|
Public takes a unique social approach to online investing with an app that emphasizes community. You can invest in stocks and ETFs through Public.
One of the best things about Public is that you can invest in fractional shares. That means you won’t need hundreds or thousands of dollars per share to buy into some of the bigger-name companies.
Public doesn’t charge commissions on trades, and you’ll pay no fees to use its services. However, there are some SEC and FINRA fees that may apply to certain trades.
It’s important to note that, although Public doesn’t currently charge, it is possible that some premium features will be rolled out in the future. You may find that these come with a subscription fee.
Currently, Public members can trade stocks and ETFs. You can browse a directory of the available investments on the Public site.
Public is an app-based platform, with support for iOS and Android devices. The app is free and includes everything you need to start investing and monitoring your results.
Research is where Public really stands out. You’ll have access to a social feed that lets you follow your favorite investors. You can even start or join group chats and discuss the trends of companies you’re considering investing in.
This social approach means the community helps each other out, but you’ll also be able to learn and grow as an investor this way.
Ease of use
The social media interface makes Public not only easy to use, but fun. When you see an investment you like, you can drag and drop it into your long-term portfolio and even share it with others for feedback. The design makes investing accessible to everyone, not just those with a high net worth.
Robinhood was an early entry into the commission-free online trading business model, having been around since 2013. You can invest in stocks, ETFs, and options. Robinhood also offers cryptocurrency investments through Robinhood Crypto.
Geared toward the beginning investor, Robinhood specializes in keeping you informed about your investments. You can set up alerts that help you keep an eye on your portfolio and identify new opportunities.
There is no fee for using Robinhood’s basic services, and the site has no plans to charge in the future. You can transfer money in and out of your account for free and use all the amenities. Best of all, you’ll get a free stock just for signing up. You will, however, pay regulatory fees, as disclosed on the site.
If, however, you want to get access to professional research reports, trade on margin, and make bigger instant deposits, you can sign up for Robinhood Gold, which starts at $5/month.
You have a wide range of investment options with Robinhood, including stocks, ETFs, options, and cryptocurrencies. Robinhood lets you invest in fractional shares, so you can get started with as little as $1.
You can sign up and fund your account on the website, but the app is where things really become useful. The app walks you through getting your dashboard set up, and you’ll have access to your whole portfolio on the app. This is where you can learn more about investing, grow your portfolio, and manage everything with a few clicks of a button.
Your Robinhood dashboard can provide ongoing news and notifications to help alert you to investment opportunities. Monitoring investment news is a great way to learn the markets and grow as an investor.
Ease of use
Robinhood was built with beginning investors in mind. The goal was to open up investing to everyone, not just the more experienced, wealthier investors that dominated the industry in the past. As a result, you’ll find the app and website are easy to use and intuitive.Advertiser Disclosure – This advertisement contains information and materials provided by Robinhood Financial LLC and its affiliates (“Robinhood”) and MoneyUnder30, a third party not affiliated with Robinhood. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Securities offered through Robinhood Financial LLC and Robinhood Securities LLC, which are members of FINRA and SIPC. MoneyUnder30 is not a member of FINRA or SIPC.”
J. P. Morgan Self-Directed Investing –Get up to $625 when you open and fund with $250,000 or more.
J. P. Morgan Self-Directed Investing is backed by a company that is one of the largest and oldest financial institutions in America: J.P. Morgan Chase.
J. P. Morgan Self-Directed Investing is an online brokerage, but if you need extra help you can always swing by one of Chase’s over 5,000 branches to ask basic questions.
J. P. Morgan Self-Directed Investing charges no commissions for online stock, ETF, options, and mutual fund trades and has no recurring fees for regular account activity on self-directed accounts.
J.P. Morgan Automated Investing (their managed portfolios) have a $500 minimum balance and charge an annual fee of 0.35% of your account balance.
Self-directed accounts can trade stocks, ETFs, options, mutual funds, and fixed-income investments (bonds).
The J. P. Morgan Self-Directed Investing platform is great for beginner traders. It doesn’t have all of the active trading bells and whistles some advanced traders look for, but it has a depth of information on each investment and makes it easy to manage your account.
J.P. Morgan is known for high-quality investment research and analysis. This well of knowledge is offered to J. P. Morgan Self-Directed Investing account holders at no extra charge.
Ease of use
J. P. Morgan Self-Directed Investing is easy to navigate and use. Existing Chase customers will find the platform very intuitive, as it integrates with other bank, credit card, and loan accounts on the same dashboard.Disclosure – INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
E*TRADE is the oldest online brokerage and has great platforms for both beginners and experts. The easiest place to manage your account for beginners is the mobile app or web-based platform.
As your investing chops improve, Power E*TRADE is the professional-level platform that active traders will love.
E*TRADE has no fee for stock or ETF trades. Options have no base fee and a 0.65 cent per contract charge (this drops to .50 cents with 30 or more trades per quarter).
Futures cost $1.50 each and secondary market bond trades are $1 each with a $10 minimum. Mutual funds cost $19.99 for trades if they not on the no-load, no-transaction-fee fund list.
E*TRADE supports a ton of different investments. In addition to common assets like stocks, bonds, and funds, you can trade futures at E*TRADE. Futures allow you to trade riskier assets like commodities, foreign currencies, equity indices, and Bitcoin. There are over 4,400 mutual funds on its no-load, no-transaction-fee list for you to explore.
E*TRADE has a solid education section to learn more about investing and trading. It has some good information on the investments in your account, but it is not the most in-depth of all major discount broker’s offerings.
Ease of use
E*TRADE has the most experience of any other online trading platform. They were the pioneer in the industry, after all. E*TRADE is straightforward and easy to use.
Fidelity is one of the largest discount brokerage firms in the U.S. It is known for its family of low-fee investment funds and focuses on helping investors reach a successful retirement.
Beginners will enjoy low fees and tools designed to help you with long-term investments.
Fidelity is among the best when it comes to pricing for retirement investments. In addition to commissions for stocks and ETFs, you can trade all of Fidelity’s mutual funds for free. It was the first brokerage to come out with mutual funds with zero expense ratio, which means no annual fund fees.
Fidelity supports virtually all of the most popular types of investments. It even supports international stocks on foreign exchanges as well as options in the commodity and forex markets. It has over 3,500 commission-free mutual funds.
Fidelity is built with long-term investing at the forefront. It’s trading systems for beginners are top-notch, however, some experts and advanced traders may find the options lacking.
Fidelity is a standout when it comes to research. The brokerage gives customers access to a wide range of data and analyst reports on stocks and other investments.
Ease of use
This brokerage is great for beginners. It’s easy for anyone to navigate, understand, and use. You can try things out by signing up for guest access to test things out for a month at no cost.
Learn more: Read our Fidelity review.
TD Ameritrade is a large discount brokerage that is perfect for beginners looking to become experts.
This brokerage offers multiple investment platforms for the web, desktop, and mobile. Its basic TD Ameritrade app is great for newer investors. As you gain more experience, you’ll want to upgrade to the powerful thinkorswim trading platform.
There’s no fee for stocks and ETFs. Mutual funds outside of its 4,200 no-transaction-fee (NTF) list cost $49.99 to trade, which is pretty steep. Futures cost $2.25 per contract.
TD Ameritrade makes most types of investments available. Those include futures, foreign currencies, and a few types of fixed income securities.
If you want the best active trading platform, TD Ameritrade is at the top of the list. Its thinkorswim platform gives you the same professional-level tools as Wall Street traders. For beginners, though, that’s probably overkill.
TD Ameritrade has great research available on-par with other large brokerage firms. It includes third-party reports from Morningstar, Thomson Reuters, Dow Jones, and CFRA.
Ease of use
TD Ameritrade has a platform for everyone. Its online trading platform and mobile apps are great for beginners and easy to use.
New investors who want the help of a seasoned professional should consider Personal Capital. Personal Capital offers a free personal finance and investment tracking platform that I recommend to any investor.
You can upgrade to the paid investment service and work with a dedicated advisor if you have at least $100,000 to invest.
Personal Capital has a free investment analysis service that’s great for anyone to use, even if you don’t use its paid investment management service. The premium service, which includes access to a human financial advisor, is available to investors with at least $100,000 and costs 0.89% of your portfolio value per year for portfolios up to $1 million.
Personal Capital advisors follow Nobel-Prize winning Modern Portfolio Theory. Wealth Management clients end up with a portfolio made up of diverse ETFs.
You don’t need to buy and sell your own funds with a Personal Capital wealth manager behind the scenes. The online platform, however, is one of the best around to get information about your investments.
Research is focused on the fees and projected performance of your portfolio. It doesn’t have a depth of information on each investment like some major brokerage firms.
Ease of use
If you’re willing to pay for an advisor, it’s about as easy as investing can get. They handle everything for you once your account is funded.
Summary of the best online brokerage accounts for beginners
|Public||$0 stock/ETF||Social media feed lets you interact with other investors. Fractional investing allowed.|
|Robinhood||$0 stock/ETF/options/cryptocurrencies||Wide range of fee-free investing options. Fractional investing allowed.|
|Webull||$0 stock/ETF/options||No commission trading and no minimum balances.|
|J. P. Morgan Self-Directed Investing||$0 stock/ETF/mutual funds||Easy to use for newer active traders. Great bank/investment combo.|
|E*TRADE||$0 stock/ETF, $19.99 mutual funds||Oldest online brokerage firm with multiple trading platforms to choose from. Many available investments.|
|Fidelity||$0 stock/ETF, $49.95 mutual funds||Great for retirement investing, low costs, and mutual funds with no expense ratio (annual fee).|
|TD Ameritrade||$0 stock/ETF, $49.99 mutual fund||Excellent active trading platform. Might be merged into Schwab platforms after pending merger closes.|
|Personal Capital||Starts at 0.89% of account value per year||Free investment analysis tools. Human financial advisor for an annual fee.|
How I came up with this list
This list of brokerage firms came from a look at the features that are most important to a beginner investor. Those include:
- Pricing and fees.
- Available investments.
- Investment platforms.
- Customer service.
- Research and education availability.
- Overall investing experience.
Because brokerage products are often quite similar, pricing and online platforms were major differentiators that helped brokerage firms make their way onto this list.
Why you need a brokerage account
Virtually every American adult should have a brokerage account. You need one to invest, it’s that simple. Without a brokerage account, ETFs, mutual funds, stocks, and bonds are out of reach.
Many people get their first brokerage account through their employer as a 401(k). But it’s important to save and invest outside of work as well. With your own brokerage account, you’re in full control of your investments and can limit the costs and fees charged in an employer-sponsored retirement account.
FAQs about online brokerage accounts for beginners
Investing is a huge part of managing your personal finances and growing your wealth, but you can’t do it without a brokerage account. Take the time to check out these great options if you are new to investing and are not sure where to start. Once you have your first brokerage account, you have the freedom to invest and build your portfolio how you see fit.