New investors need an investment broker that walks them through the process. You need education, user-friendliness, and plenty of research. Fortunately, many of today’s online investment brokers offer this and more. You want a broker that acts as your ally, helping you make the most of your investments.
Understanding what to look for in an investment broker is the first step. Then, the next step is shopping for the right broker based on your needs.
Check out our guide on investment broker options for beginning investors below.
E*TRADE – Best for User-Friendliness
E*TRADE designed its standard platform for beginners. It has no minimum balance requirement. You can also trade online or on the app. Both platforms are user friendly and offer plenty of benefits:
- Commission-free stock trades
- Screening tools to minimize what investments you see based on your preferences
- Portfolio analysis reports
- Educational articles and videos
- Paper trading account to try trading before risking your money
If you want a platform you can jump into and start investing right away, E*TRADE offers this opportunity.
Robinhood – Best for Automated Investing
Do you prefer a hands-off approach? Robinhood creates your portfolio for you. It also automatically rebalances it. They do this based on your risk tolerance. After you answer a few questions and deposit your funds, Robinhood does the rest. Robinhood offers:
- Commission-free stock trades
- No minimum balance requirement
- You can buy fractional shares
- Some tools and research available, although the portfolios are managed for you
Robinhood makes hands-off investing simple. You don’t have to watch the market and worry about the right steps. After you deposit your funds, you can sit back and relax. That doesn’t mean you can’t watch your portfolio or make changes, though.
Merrill Edge – Best for Customer Service
Merrill Edge offers 24/7 online chat and phone support. They also have in-person consultants available in many Bank of America branches. Merrill Edge’s program walks you through your portfolio in a story-fashion. It tells you where changes may be necessary. Merrill Edge offers:
- Commission-free stock and ETF trades
- Great third-party integrated research
- Bank of America customers can see all accounts (Merrill Edge and BOA) in one dashboard
- Several screeners
- A quick-trade button allowing trades from any screen
If you’re a Bank of America customer, Merrill Edge makes perfect sense. With integrated dashboards, you’ll see your net worth in one place. Plus, you have the advantage of seeing consultants in-person. Even though they specialize in life planning/retirement, it’s professional advice when you need it.
TD Ameritrade – Best for Education
TD Ameritrade targets new investors. They offer a lot of educational information. They teach the basics of investing overall. TD Ameritrade’s topics also cover advanced topics. It can grow with you as you gain more experience. TD Ameritrade offers:
- Commission-free trades online
- Customized learning experience based on your needs
- Offers interactive courses and webinars
- Provides third-party research
- User-friendly platform
Once you get experience, TD Ameritrade has a great platform for experienced/day traders. If you ever want to dabble in options trading, they lead the industry in it. TD Ameritrade offers research, guidance, and a great platform.
Charles Schwab – Best for Research
Research is the key to successful investing and Charles Schwab excels at it. They specialize in retirement accounts, but you can open a taxable account too. They offer a great selection of investments for both beginner and experienced investors. Charles Schwab offers:
- Commission-free trades
- Excellent in-house research
- A simple, user-friendly platform for new investors
- No minimum deposit requirement
- A separate platform for day traders
Charles Schwab is great for investors saving for retirement – that’s their bread and butter. Overall, though, they offer great research opportunities, which is great for the hands-on investor that wants to improve his skills right away.
Choose your online stock broker according to your needs/preferences. Do you want a hands-off approach or are you more hands-on? Look for brokers that require the minimum you can afford ($0 is great) and the educational opportunities you need. Think about if you want third-party research options or if you’ll do your own research. All these pieces add up when choosing the right platform.
Once you choose your platform, get familiar with it. Play with the features, and if they offer paper trading, use it. Get yourself used to trading before risking your own money and lower your stress when you start trading.