Best Online Brokers for Beginners of 2024

According to our research, Fidelity is the best online broker for beginners due to its abundant educational materials, low costs, excellent customer support, and more. We researched 25 online brokers and trading platforms and evaluated them based on 11 major categories and 66 criteria, including fees, usability, account services, mobile app experience, and additional features. 

Our research previously determined TD Ameritrade to be the best platform for beginners, the best platform for educational materials, and the best platform for customer service. However, now that TD Ameritrade is no longer accepting new customers as its integration into Charles Schwab nears completion, a reevaluation of our quantitative ratings model has determined that Fidelity and Charles Schwab are now the best brokers for beginner traders who want top educational materials and customer service.   

Best Online Brokers for Beginners of 2024

• Best Broker for Beginners: Fidelity
• Best Broker for Investor Education: Charles Schwab
• Best Broker for Customer Service: Charles Schwab
• Best Broker for Ease of Trading Experience: E*TRADE
  

Fidelity: Best for Beginners

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• Account Minimum: $0
• Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trades

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Why We Chose It

Fidelity is our choice for the best overall broker for beginners due to its low fees, wide-ranging educational content, strong customer service options, vast array of investment resources, and ongoing enhancements to improve the user experience.

Pros & Cons

Overview

Founded in 1943 and headquartered in Boston, Fidelity is one of the largest brokerages in the U.S., with 43 million individual investors, $11.5 trillion in assets under administration, and $4.4 trillion in discretionary assets. Beginner traders and investors will find Fidelity’s account setup process to be a breeze. The company offers three platforms that can be used simultaneously. Fidelity excels at providing a user-friendly experience, with ongoing enhancements designed to create an increasingly intuitive interface that simplifies the complexities of investing. Navigating through Fidelity’s web-based, downloadable, and mobile trading platforms is seamless, making it ideal for those taking their first steps in the financial markets.

Of course, when it comes to determining which broker is the best for beginners, education is a top-weighted criteria. One of Fidelity's standout features is its expansive Online Learning Center, which utilizes machine learning to highlight educational materials that match the customer’s investing behavior. The platform offers a wealth of educational materials, including articles, webinars, videos, tutorials, and live events and seminars catering to various learning styles. Additionally, Fidelity provides a powerful simulated trading environment with a paper trading feature. This allows beginners to practice their strategies and get a feel for the market without risking real money. It's a valuable tool for building confidence and honing skills before diving into live trading. Whether you're looking to grasp the basics of investing or delve into more advanced strategies, Fidelity's educational tools empower beginners to make informed decisions.

Customer support, another feature critical to the development of new traders and investors, is also top notch at Fidelity, which offers assistance through various channels. For beginners encountering uncertainties, responsive and knowledgeable customer service is available through several channels, including 24/7 live phone support, live online chat, a chatbot (Fidelity Virtual Assistant), and email. Perhaps most importantly, customers can talk to a live broker (there is a surcharge for any trades placed via the broker) and get face-to-face assistance at one of any 200 investment centers across the U.S.

Charles Schwab: Best for Investor Education and Customer Service

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• Account Minimum: $0
• Fees: $0 for stock/ETF trades, $0.65 per contract for options

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Why We Chose It

Best for Investor Education

With the recent integration of TD Ameritrade, Charles Schwab has bolstered its already strong educational offering to an industry-best level. For beginners looking to improve their investment knowledge and trading skills, the resources Charles Schwab now offers are unmatched.

Best for Customer Service

Charles Schwab has long been a close runner-up to TD Ameritrade when it comes to customer service. With TD Ameritrade nearly fully integrated into the Schwab ecosystem, customers will not find a better breadth and quality of service options backed by a satisfaction guarantee.

Pros & Cons

Overview

Originally formed as First Commander Corporation by its founder Chuck Schwab and his partners in April 1971, the company’s name was changed to Charles Schwab & Co., Inc. in 1973. Since the start, the company has put customers first as part of its “Through Clients’ Eyes” philosophy. As one of the largest discount brokerages in the world, with $8.52 trillion in client assets and 34.8 million brokerage accounts as of Dec. 31, 2023, Charles Schwab provides a full-service approach to the entire range of investor types, as well as to employers and independent advisors.

Charles Schwab announced that it had acquired TD Ameritrade for $26 billion in November 2019. The deal closed a year later and Charles Schwab has been working to integrate TD Ameritrade into its business ever since. Schwab customers have long enjoyed wide-ranging and responsive customer service and excellent educational resources. But Charles Schwab's acquisition of TD Ameritrade has created an educational and service-rich powerhouse that caters to investors' diverse needs. Schwab even goes so far as to offer a satisfaction guarantee to customers for the services it provides.

Charles Schwab's dedication to investor education has been a hallmark, and the acquisition of TD Ameritrade amplifies its already stellar collection of articles, videos, webcasts, live branch events, and podcasts. Customers will especially like that Schwab now offers live trading seminars that have been a top draw at TD Ameritrade for years. And when it comes to customer service, investors of all levels will be even closer to in-person support now that Schwab’s 400-plus branch locations will increase with the addition of many TD Ameritrade branches. All told, beginners will not find a deeper bench of financial advisor access, frequently asked questions (FAQs), and 24/7 live phone and chat support to help them navigate the complexities of investing.

E*TRADE: Best Broker for Ease of Use

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• Account Minimum: $0
• Fees: No commission for stock, ETF, and mutual fund trades. Options are $0.50-$0.65 per contract, depending on trading volume.

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Why We Chose It

E*TRADE wins our Best Broker for Ease of Use thanks to user-friendly desktop and mobile experiences to go along with readily accessible tools and features.

Pros & Cons

Overview

E*TRADE has been a leading broker since its founding in 1982, thriving as an innovative electronic platform with the evolution of the internet in the early ‘90s and building a reputation as a seamless, powerful trading service. In 2020, Morgan Stanley acquired E*TRADE for $13 billion. Morgan Stanley's ownership has been a net positive for E*TRADE, leading directly to E*TRADE eliminating all commissions for mutual funds on the platform in December 2022.

E*TRADE has diligently worked on enhancing an already strong desktop and mobile experience, implementing a number of app enhancements ranging from position details to site navigation optimization. Continuing improvements to educational material help investors move swiftly from research to investing. New investors can get started with ease due to straightforward site menus and research tools, although the platform is built for users of all backgrounds and experience levels. A wide range of pre-built portfolios and automated portfolio-building tools let beginners enter the market without having to spend an exorbitant amount of time learning the ropes. The paper trading account option lets users experience the site and test trading approaches without putting real money in the market. 

Two mobile apps are offered that cater to investors of different experience levels and trading styles. The E*TRADE mobile app is intuitive, aesthetically pleasing, and geared toward users looking to stay in touch with their brokerage accounts while maintaining full feature parity. The Power E*TRADE mobile app builds on this by providing even more interactive charts and technical analysis to ensure investors have everything they need in the palm of their hand. User reviews focus on a continually enhanced, intuitive experience, and low or eliminated trading fees. Overall, E*TRADE is one of the most advanced mobile trading platforms, as it’s extremely well-designed and offers a wide range of useful features.

Final Verdict

Fidelity, Charles Schwab, and E*TRADE are all strong full-service brokers with many outstanding qualities. They all offer a solid menu of trading resources, educational content, research tools, and demo accounts to help beginners get started. All have invested heavily in making their platforms intuitive and easy to navigate to provide users with a smooth experience. These are the critical tools necessary to help ease new investors into the complex world of investing. 

That said, Fidelity takes the top spot as the best broker for beginners due to its overall corpus of features that are critical to helping beginner traders and investors thrive. Educational resources and customer support are key elements in this evaluation, and Charles Schwab’s execution in these two areas is unmatched throughout the industry. Still, E*TRADE has been continually enhancing desktop and mobile offerings, particularly when it comes to education, making the difference between platforms nearly imperceptible. As a result, new investors would do well utilizing any of these industry titans to grow their investment expertise and capabilities.

Trading vs. Investing

Generally, when people talk about investing, they are referring to the practice of purchasing assets to be held for a long period of time. Investors hold their assets long-term so that they may reach a retirement goal or their money can grow more quickly than it would in a standard savings account.

In contrast, trading involves buying and selling assets in a short period of time with the goal of making quick profits. Trading is typically seen as riskier than investing, and those new or inexperienced in trading should do so cautiously.

Before selecting an online broker to use, you'll need to ask yourself questions including:

• Am I a beginner? If so, you'll want to find a broker with solid education resources and ideally a paper trading account to practice in. You'll also want calculators and analysis tools to help you plan, invest, and manage your portfolio. The quality of tools and resources can vary widely by broker but, generally, the larger brokers have a much wider selection.
• How much can I afford to invest right now? Some brokers require a larger initial investment to open an account and access the trading platform. If you have a small amount of money, you'll want a broker with a low to no account minimum.
• Am I a trader or an investor? While investors can usually get away with a web platform or app, the complex needs of traders generally require a customizable desktop platform with all the bells and whistles.
• What kind of assets would I like to invest in? While most brokers offer the basics of stocks and ETFs, you may find other seemingly standard offerings like bonds and options are far from universal. If you are interested in trading forex, futures, cryptocurrency, and so on, you will be looking to larger brokers with asset offerings far beyond the basics.

How to Pick a Brokerage

You’ll also need to decide the type of brokerage account you’ll want, the fees involved, and how involved you want to be, day-to-day, with your account.

Also consider your investment preferences, such as your need for research, tools, and portfolio tracking features, to ensure the broker you end up choosing will be a match.

You can also read our guide to choosing the right online broker for additional assistance in choosing the right brokerage account.

Terms Beginners Should Know

• Cash account: A cash account is a brokerage account in which a customer is required to pay the full amount for securities purchased, and buying on margin is prohibited. The Federal Reserve's Regulation T governs cash accounts and the purchase of securities on margin. This regulation gives investors two business days to pay for securities.
• Margin account: A margin account is a brokerage account in which the broker lends the customer cash to purchase stocks or other financial products. The loan in the account is collateralized by the securities purchased and cash, and comes with a periodic interest rate. Because the customer is investing with borrowed money, the customer is using leverage which will magnify profits and losses for the customer.
• Retirement account: Brokerages offer all types of retirement accounts like traditional IRAs, Roth IRAs, and 401(k)s.

Anyone who would like to get involved in the stock market should know some basic terminology:

• Stock: A stock (also known as "shares" or "equity") is a type of security that signifies proportionate ownership in the issuing corporation. This entitles the stockholder to that proportion of the corporation's assets and earnings.
• Price-to-earnings ratio: The price-to-earnings ratio (P/E ratio) is a ratio for valuing a company that measures its current share price relative to its earnings-per-share (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
• Market capitalization: Market capitalization, commonly referred to as "market cap," refers to the total dollar market value of a company's outstanding shares. Market cap is calculated by multiplying a company's shares outstanding by the current market price of one share.
• Dividend: A dividend is the distribution of reward from a portion of the company's earnings and is paid to a class of its shareholders.
• Exchange-traded fund (ETF): An exchange-traded fund (ETF) is a collection of securities—such as stocks—that typically tracks an underlying index.
• Bond: A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower which includes the details of the loan and its payments.
• Mutual fund: A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities such as stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors.
• Limit order: A limit order is the use of a pre-specified price to buy or sell a security. For example, if a trader is looking to buy XYZ’s stock but has a limit of $14.50, they will only buy the stock at a price of $14.50 or lower. If the trader is looking to sell shares of XYZ’s stock with a $14.50 limit, the trader will not sell any shares until the price is $14.50 or higher.  
• Market order: A market order is a request by an investor—usually made through a broker—to buy or sell a security at the best available price in the current market. It is widely considered the fastest and most reliable way to enter or exit a trade and provides the most likely method of getting in or out of a trade quickly. For many large-cap liquid stocks, market orders fill nearly instantaneously.

If you're interested in learning more about the stock market, you can check out our guide to investing.

How We Picked the Best Brokers for Beginners

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. This year, we revamped the review process by conducting an extensive survey of customers who are actively looking to start trading and investing with an online broker. We then combined this invaluable information with our subject matter expertise to develop the framework for a quantitative rating model that is at the core of how we compiled our list of the best online broker and trading platform companies.

This model weighs key factors like trading technology, range of offerings, mobile app usability, research amenities, educational content, portfolio analysis features, customer support, costs, account amenities, and overall trading experience according to their importance. Our team of researchers gathered 2,425 data points and weighted 66 criteria based on data collected during extensive research for each of the 25 companies we reviewed. 

Many of the brokers we reviewed also gave us live demonstrations of their platforms and services, either at their New York City offices or via video conferencing methods. Live brokerage accounts were also obtained for most of the platforms we reviewed, which our team of expert writers and editors used to perform hands-on testing to lend their qualitative point of view. 

Read our full Methodology for reviewing online brokers.