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For new investors, getting started can feel overwhelming. Risks loom large, and complicated, unfamiliar financial jargon can be intimidating. That’s where online brokers can come in handy: Those that offer intuitive platforms and plenty of educational resources can guide you through your early investing days.
In our search for the best online broker for beginners, Forbes Advisor evaluated 21 brokers. In side-by-side comparisons, we assessed the user friendliness of each broker’s platforms, with a strong focus on the quality of educational and research materials.
We also heavily considered available help resources. Newcomers to investing and trading need dependable, friendly and informative customer service for help. We thoroughly tested the support at each of the brokers in our survey via phone, live chat and email. Finally, we made sure that our recommended brokers for beginners offer $0 commissions, competitive fees and low minimum account balances.
In our testing, we compared more than 100 different features and variables for 21 of the leading U.S. online brokers. We dug deep to assess the broad selection of tools and trading features offered by each platform, details that have become even more important for choosing an online broker now that almost all major brokerages have slashed their trading commissions and fees to $0.
The survey reviewed six categories: commissions and fees, platform and technology, range of product offerings, research and education, account security and customer service. In our side-by-side comparisons, we gathered thousands of individual data points to arrive at our conclusions.
For the best broker for beginners, we gave the most weight to ease of use, educational resources and customer service. Additionally, we paid close attention to platform and technology and commissions and fees.
We opened live accounts at each of the brokers in our survey for hands-on testing of their services. Our broker reviews were conducted by a seasoned market professional with over 20 years of experience in the markets, both as a broker and a retail investor.
Some investors look to their investments as a source of income while others use it is a means to grow or preserve their wealth. Take your financial goals into consideration when selecting a broker and make sure it can accommodate your objectives.
Pay close attention to commissions and fees, especially for the markets that are the most important to you. Also consider the technology offered by the broker and if it fits your investing style, whether you are a long-term investor or an active trader.
A good broker is much more than a venue to execute trades. Look for a broker that can assist you with quality research and educational materials to aid your development as an investor and help you make winning decisions in the markets.
Finally, keep in mind how important it is for you to be able to access live customer support. Some brokers place a great deal of emphasis in this area, with live support available by phone and chat 24/7. Others prefer to focus more on technology and have bare-bones customer service available by email or text chat only.
An online brokerage account is a trading account that investors can set up online to trade stocks, bonds, ETFs and mutual funds. Unlike a traditional investment advisor, online brokers let investors trade for their own account—often with no fees or commissions.
You can open an online brokerage account with very little money. In fact, nearly all of the brokers we’ve included here let investors open an account with no minimum balance required.
Every online broker has a different account opening process, but they can usually be completed online. Start by visiting the broker’s website, which will walk you through the company’s process. You’ll need to provide some identifying information as well as details about your investing experience and objectives.
There are a variety of accounts you can open with an online broker. If your goal is to save money that you won’t need until retirement, then you may want to consider using a tax-advantaged account, such as an individual retirement account (IRA). If, on the other hand, your goal is to save for nearer-term goals—such as a down payment on a house—then you may just want to use a taxable account that you can access at any time.
When you open an account, you may be given the option to open a cash account or a margin account. Margin accounts are like a credit card, letting you buy more assets than you could with just the money you’ve deposited in your account. While investing on margin can magnify your gains, it could also magnify your losses. If you don’t have a lot of investing experience, you may want to stick with a cash account, which limits your purchases to your cash reserves, like a debit card.
Each online broker has a slightly different account opening process, but all of them generally require that you provide certain information, including:
Depending on where you open an account, you may also need to upload a copy of your driver’s license or provide other documentation. Firms must gather all of this information to demonstrate that they know their customers (including their objectives).
A paper trading account is like a normal investing account, except that it doesn’t involve investing any actual money. Instead, paper trading accounts pull in real-world market data and allow investors to place fake trades to see what their results would have been if they had actually invested.
