Best Online Stock Brokers for Beginners for September 2023

We believe investing is the best wealth building tool out there, and we're so glad you're taking the first step to get started.

The best online brokers for beginners are easy to use and have low costs, a wide range of educational materials, and stellar customer service. We evaluated several brokers across the market and found 9 that we believe are some of the best.

On this page, you'll find our top picks of the best trading platforms for beginner investors, as well as a few terms you'll want to be familiar with as you explore and compare investment companies.

4 Best Trading Platforms for Beginners:

• Best Broker for Beginners: SoFi Active Investing
• Best Broker for Ease of Use: Fidelity
• Best Broker for Fractional Shares: Robinhood
• Best Broker for Investing and Banking in One: J.P. Morgan Self-Directed Investing

We know everyone's financial circumstances and goals are different, so we've compiled a list of the best stock brokers for beginners to help you find one that meets your needs. Here's a review of our picks for the best online brokerages for beginners.

SoFi Active Investing: Best Broker for Beginners

Why we picked SoFi Active Investing:

SoFi is our top pick for best broker for beginners because it has one of the best user experiences available, and it offers all-in-one investing, banking, and budgeting. It has some unique features, such as fractional share investing and access to IPO investing for smaller investors.

SoFi is also one of the few platforms to offer commission-free options trading to its members. It also emphasizes long-term responsible investing, and provides many educational tools to its members.

All of these features make SoFi one of the best investing platforms for beginners as well as seasoned investors. Fractional shares can allow investors to get started in the stock market with as little as a few dollars, and SoFi's user-friendly platform can be an excellent fit for new investors who might be intimidated by the stock market. SoFi additionally offers IRAs, which some of the other beginner-friendly brokerages don't, making it a good choice for new investors who want to start saving for retirement.

Fidelity: Best for Ease of Use

Why we picked Fidelity:

Consistently ranked one of the best investment companies for beginners, Fidelity is a solid broker for investors who want excellent customer service and low fees, as well as a variety of beginner-friendly features. Just to name a few, Fidelity is one of the few traditional brokers to offer fractional share investing, which can help new investors create a diverse portfolio with relatively little money.

Fidelity is our top pick for ease of use as well. It has an excellent mobile and desktop platform, with all the features above being incredibly usable for beginners.

Fidelity also has a branch network throughout the United States, making it an excellent choice for new investors who might benefit from in-person guidance when they need it.

Robinhood: Best for Fractional Shares

Why we picked Robinhood:

Robinhood has a reputation of being a platform built for traders, but it is a good option for beginner investors who want a standard brokerage account where they can buy and sell stocks and/or cryptocurrencies (via Robinhood Crypto) through an easy-to-use app. Robinhood is our favorite pick for buying fractional shares of stock, which can help beginner investors create a diverse portfolio without a ton of money, and also is one of the few brokers to offer commission-free options trading.

Robinhood also offers traditional and Roth IRAs through its user-friendly platform, making it a smart choice for beginning investors who might want to start investing for their own retirement. It also pays a highly competitive APY on uninvested cash balances, making it a good choice for beginners who want to gradually put their money to work while still earning some returns.

J.P. Morgan Self-Directed Investing: Best for App-Based Investing and Banking

Why we picked J.P. Morgan Self-Directed Investing:

If you're just starting out with investing, J.P. Morgan's platform is user-friendly with $0 commissions, even on mutual funds. Most brokers have a no-transaction-fee (NTF) list that allows customers to invest in certain funds without commissions, but J.P. Morgan's $0 commission price on all mutual funds is a rarity.

J.P. Morgan Self-Directed Investing could be an especially good choice for existing Chase customers who have bank accounts or credit cards with the company, as its app allows you to manage all of your Chase accounts in one place. And speaking of multiple accounts, J.P. Morgan also offers an excellent robo-advisor platform that can be managed through its app, making it a smart choice for beginners who want to put some of their investments on auto-pilot, but still want to create their own stock portfolio.

E*TRADE: Best Mobile Platform

Why we picked E*TRADE:

E*Trade is one of the best brokers for beginner investors who want a top-notch trading platform and many different investment choices. E*Trade offers a wide variety of account types and is a great well-rounded brokerage that will meet most investors' needs.

For beginners, E*Trade offers one of the best collections of educational resources and tools to help get started with responsible investing. And unlike some of the other online-based brokers, E*Trade has a physical branch network for beginners who might benefit from in-person help.

Merrill Edge? Self-Directed: Best for Customer Service

Why we picked Merrill Edge? Self-Directed:

Merrill Edge is a great choice for beginning investors who want the choice of stocks, bonds, mutual funds, ETFs, CDs, and options. One of the best beginner-friendly features of Merrill Edge is its unparalleled access to in-person help, as Merrill is owned by Bank of America and has advisors in many of its thousands of bank branches across the country. It takes the cake for our best broker for customer service.

Merrill Edge offers more account types than some of the beginner-friendly app-based brokers, such as custodial accounts and small business investment accounts. One potential negative is that Merrill Edge doesn't offer fractional share investing, which can be a valuable feature for newer investors who don't have a ton of money to invest.

Charles Schwab: Best for Investor Education

Why we picked Charles Schwab:

Charles Schwab is a good brokerage choice for beginner investors who want lots of investment and account type options, several ways to get customer service, as well as great banking and cash management products. It also offers one of the best collections of educational tools for beginners who want to learn the ins and outs of the investing world, earning it our pick of Best Broker for Investor Education.

Schwab is one of a few traditional brokers that offer fractional share investing, which can help beginners build a stock portfolio without a ton of initial cash. It also has an excellent robo-advisor platform for investors who want to take a more passive role in their strategy. In addition, Schwab offers an interest-bearing checking account for its brokerage customers, which can allow beginning investors to keep their finances in one place.

Acorns: Best for Rounding Up Spare Change to Invest

Why we picked Acorns:

If you don't want to choose individual stocks and funds to invest in, Acorns can make good sense for beginners. The Acorns platform is best suited to investors who want to completely automate their investment strategy, so if you're not comfortable choosing your own stocks, ETFs, and mutual funds, Acorns could be an excellent fit for you. Acorns is a robo-advisor that makes online trading for beginners easy, with features like automatic round-up of purchases to the nearest dollar and investing the change.

Acorns offers several different types of investment accounts, so it can also be a good option for new investors who want to start investing for retirement, or invest on behalf of their minor children.

Vanguard: Best for Low-Cost Index Investing

Why we picked Vanguard:

If you're a beginner investor who doesn't feel comfortable with owning individual stocks, Vanguard could be a great brokerage for you. Vanguard is a good broker for investors who want to put their money into ETFs or mutual funds, particularly Vanguard's own. Vanguard's low-cost mutual funds are rarely on any brokers' no-transaction-fee (NTF) lists, but investors can certainly buy them directly and avoid commissions.

In addition to its own mutual funds and ETFs, Vanguard also offers zero-commission stock trading for newer investors who want to buy specific stocks. Its investment platform isn't as feature-packed or user-friendly as some of its competitors, so it likely won't appeal to active traders, but for beginning investors who want to put most of their money into some of the best index funds in the market, Vanguard is a top choice.

How to pick the best online stock broker for beginners

There's no perfect broker for everyone, but here are some of the important factors to keep in mind as you're choosing for a stock broker for beginners.

Cost structure

The best brokerage accounts for beginners charge no commissions for online stock and ETF trades (what you'll generally focus on as a beginner) -- but many do charge commissions or fees for more complex moves like options trading, mutual funds, and other products.

Account minimums

Some stock brokers have a minimum deposit requirement to open an account, anywhere from $5 to $500, and some don't charge anything at all. We've narrowed our picks to brokers that don't have account minimums. Note that some brokers don't allow fractional share investing, so you'll need enough money to buy at least one share of a stock or ETF. These low-barrier-to-entry brokerages let anyone get started investing, even without a ton of capital.

Variety of funds

Picking individual stocks isn't right for everyone, especially beginners. The best investing platform for beginners should offer low-cost exchange-traded funds and no-fee mutual funds to help you invest wisely without a ton of stock market knowledge.

Account options

Within the realm of stock brokers, you can choose between a cash account and a margin account:

• Cash account: You can only spend the money you have sitting in your account.
• Margin account: You can borrow money from your broker to invest with. Trading on margin is a risky prospect, though, and isn't usually a great idea for beginner investors. Margin interest rates are generally high, and that's especially true in a rising-rate environment.

Features and support

If you simply want to stick a recurring amount of money into low-cost ETFs and let your money grow, a no-frills investing app could be all you need. If you're interested in taking your investing to the next level and learning how to choose individual stocks and direct your portfolio yourself, look for a platform that includes educational resources, research, news, and customer support that'll help you make smart choices as you learn the ropes -- and one that offers more advanced trading features you can use as your knowledge grows.

• Research: Many of the best online stock brokers for beginners offer access to research so you can read more about market sectors as well as individual stocks, ETFs, and mutual funds.
• News: Some of the best trading platforms for beginners offer news updates, so you can keep tabs on companies and happenings in the stock market in general.
• Customer support: You should be able to pick up the phone and speak to a live person who can help you navigate any issues you experience.

Educational resources

When you're new to investing, you may not be familiar with key terms that are necessary to manage your account. And if you don't know what a mutual fund is, you probably shouldn't buy one. Many of the best online brokerages for beginners have an educational resources section loaded with information that can help you learn more about investing and gain confidence.

Terms beginners should know when choosing a broker:

What is the best stock trading platform for beginners?

As a beginner investor, you may be working with limited funds, and you may need a bit more guidance getting started. That means you might benefit from an online broker with no account minimum, $0 commissions, and more educational resources.

Here's a list of the best stock trading platforms for beginners to consider.

• Best Broker for Beginners: SoFi Active Investing
• Best Broker for Ease of Use: Fidelity
• Best Broker for Fractional Shares: Robinhood
• Best Broker for Investing and Banking in One: J.P. Morgan Self-Directed Investing

What is a stock broker?

A stock broker is a trading platform (or person) that facilitates the buying and selling of marketable securities like stocks and exchange-traded funds (ETFs). Through a stock broker, you can open a brokerage account, a specialized financial account designed to hold investments and cash.

The term is often used interchangeably with "brokerage," which is technically the name for a business that employs brokers or acts as a broker to facilitate trading.

When you want to buy stock in a company, you can't simply call up the company and buy shares, and you can't just walk into your local bank and invest. You need a specialized brokerage account, and that's where stock brokers come in.

What are the different types of brokerage accounts?

There are two main types of stock brokers: discount and full-service. They each come with distinct costs and levels of service.

Discount broker

A discount broker is a company that lets an investor buy and sell securities online. As a customer, you can direct the process of buying and selling stocks or sign up for an account with a robo-advisor that'll automate your investments. Many discount brokers have features that help you decide how to direct your trades, as well as educational tools to help you learn how to invest, but typically there's no human broker taking and filling your orders.

True to their name, discount brokers are much cheaper than full-service brokers, and most offer zero-commission stock trading. For the vast majority of investors -- especially the beginning investor -- a discount broker is the best choice. That's why our picks for the best trading platform for beginners are exclusively discount brokers.

Full-service broker

Think of a full-service broker as an old-school broker. It's a firm that usually operates out of a physical office where an actual person, also called a stock broker, takes and executes clients' buy and sell orders. A full-service broker might also provide personalized investment planning services, such as stock-buying advice, tax guidance, and retirement planning help.

Full-service brokers are far more expensive than discount brokers, given the costs of human advisors and brick-and-mortar locations. But costs have generally come down over the past few decades as they face competition from stock brokers, aim to make investing more accessible, and gain access to tools to automate work on their end.

Full-service brokers are best suited to high-net-worth investors who want a personal level of service and dedicated investment portfolio management. Discount brokers are most appropriate for nearly all investors.

What is the best place to buy stocks for beginners?

The best place to buy stocks for beginners will vary depending on your needs. There are three standard options investors have when they want to know where to buy stocks:

1. Web-based stock brokers
2. Investing apps
3. Robo-advisors

The great thing for first-time investors is that many of the best brokers for beginners offer all three avenues to buy stocks under one roof.

1. Web-based stock brokers

The most common place to buy stocks is with a web-based stock broker. These accounts tend to be the best investment accounts for beginners seeking a simple investing platform and $0 online commissions for stocks and ETFs.

Before you start investing, be sure to check out our beginner guide on how to buy stocks.

2. Investing apps

The market is flush with options to buy stocks through mobile apps that also support other financial needs, like budgeting, banking, and cash transfers. The investing and banking app Acorns, as well as Cash App, are great free stock trading apps to buy stocks with micro investments and manage an array of money needs in one place.

3. Robo-advisors

For new investors, some of the best online brokerages for beginners also offer a robo-advisor service -- some exclusively operate this way.

Instead of working with a human broker or self-directing your stock trading account, you use a robo-advisor to set your portfolio on cruise control. You input your financial goals, and algorithms work like dedicated brokers to do the buying and selling for you. Robo-advisors are a low-cost solution for new and hands-off investors.

RELATED: Compare our picks for the best robo-advisors for beginners.

What do you need to open a trading account?

The process for opening a brokerage account is similar to the process for opening a checking or savings account. If you're using an online stock broker, it should take just a few minutes, and it'll involve filling out a few simple forms.

If you're opening a brokerage account:

To expedite the process, have this information available:

• Social Security number (SSN): Your broker needs your SSN for identity verification and to prepare year-end tax forms. If your account earns interest, receives dividend payments, or earns a profit (or loss) through sold investments, you'll have to report those on your tax return.
• Driver's license or other government-issued ID: If you don't have a driver's license, you can typically use another state-issued ID or a U.S. passport to verify your identity.
• Funding method: The easiest way to fund a new brokerage account for beginners is by an ACH transfer from your bank account. So have your bank routing and account numbers or online banking password handy. Alternatively, you can mail a check or wire money (usually for a fee), and your broker might have additional funding options.

If you're opening an IRA account:

The process for opening a traditional IRA account or Roth IRA account is no different. In fact, all an IRA account is a standard brokerage account that's taxed in a different manner. We mention this since one of the best steps new investors can take is to begin investing in a tax-advantaged account. Just like commissions, taxes can eat away at investment gains, and IRAs help shelter investors from paying these taxes.

TO LEARN MORE: Check out our picks for the best traditional IRA accounts and best Roth IRA accounts

Understanding brokerage trading fees

Trading commissions and account minimums are largely a thing of the past -- especially for most online stock brokers. Almost no stock broker or investing app charges commission fees on basic trading, and most let you open an account with $0 deposited, or just a few dollars.

However, most still require a minimum amount of money to use more complex features, such as margin investing. And $0 commission typically applies to stock and ETF trades; some brokers charge commissions for trading options and mutual funds, among other products. Take a look at a broker's full fee schedule before you open an account to make sure it makes sense for how you intend to invest.

Additionally, note that ETFs, mutual funds, and other types of funds you invest in usually come with fees of their own, called an expense ratio. This is a cost outside of your broker's control, but your broker will usually let you know the expense ratios for funds it lets you invest in.

Why commissions and fees matter

Here's why trading commissions are so important: Say your broker charges a $6.99 commission for online stock trades and you have $1,000 to invest. You want to spread your money across a portfolio of five stocks.

To make your initial investments, you'll pay nearly $35 in trading commissions. On a $1,000 investment, you're effectively starting with a 3.5% loss in your portfolio.

Plus, you'll pay another $6.99 each time you add to one of your stock positions. If you're planning to build up your portfolio over time, it's not hard to see how this can cost you thousands of dollars over the years.

Keep in mind the account minimum

Most major stock brokers have no account minimum. This historically hasn't been the case. When I opened my first brokerage account over 20 years ago, I needed to deposit $2,000 just to get started.

A low- or no-minimum-deposit requirement lets investors who don't have a ton of spare capital get started investing early, so you can gradually build your first investment portfolio and take advantage of long-term gains.

How much money do you need to start investing?

There's no set amount of money that you need to start investing. Some brokers will allow you to open a new account with $1, while others have minimum initial amounts, especially for mutual fund accounts. And even if your broker has a minimum, some will waive the minimum if you're willing to set up a recurring transfer from your bank account into your investment account.

It's also important to realize that some brokers allow you to buy fractional shares of stock, while others only allow purchases of whole shares. In other words, if you want to buy a stock that trades for $200 per share, you'll need at least $200 to get started if your broker doesn't allow fractional share investing. If it does allow fractional shares, you might be able to buy a "piece" of a share for just a dollar or two.

How to invest in stocks as a beginner

Follow these steps to get started investing in stocks:

1. Determine your investing approach. You could be hands-on, selecting individual stocks, or hands-off, letting a robo-advisor manage your portfolio. You could fall somewhere in between, working with a broker to choose low-effort index funds for your portfolio.
2. Choose how much to invest. Don't invest money you'll need within five years -- your investments aren't liquid funds, and short-term investments are too vulnerable to volatility. Before deciding how much to invest, make sure you've set aside an emergency fund, any vacation savings, short-term education costs, and other short-term savings like a down payment for a home or car.
3. Open an investment account with a brokerage. Choose a brokerage like the ones we've listed above to manage your investments. Open your account with at least the minimum investment.
4. Diversify your stocks. If you're investing in a self-directed account -- where you pick individual stocks -- choose stocks from businesses you understand across an array of industries. Avoid high-volatility stocks for now, or choose an ETF or index fund to skip having to choose altogether.
5. Continue investing. Continue to contribute to your investment accounts and hold on to the investments long term in order to get the best and most stable returns on your investments.

Should beginner investors buy fractional shares?

Many of the best trading platforms for beginners now offer the ability to buy and sell fractional shares of many popular stocks. Investors essentially buy a slice of a share, which opens up access to a wide universe of investments for beginner investors that would otherwise be unavailable when starting with a small portfolio. For example, some popular stocks can cost more than $1,000 per share. Buying these stocks would be impossible for someone starting out with, say, a $500 investment.

But with fractional share investing, investors can buy slices of these stocks in smaller dollar amounts. Best yet, many of the best brokerage accounts for beginners have $0 commissions to invest in fractional shares and you can do so with as little as a few dollars.

LEARN MORE: Best brokers for fractional shares

Additional investing resources for beginners

If you're new to investing, here's a handful of helpful resources to help you get started:

• How much money do you need to start investing?
• Stock market basics for beginners
• Investing in stocks for beginners
• Types of stocks
• How to invest $100
• What to invest in
• How to set investment goals

Best Trading Platforms for Beginners Comparison