Best Online Brokers for Beginners of 2024 (2024)

New investors look for brokerage platforms that have tools and resources to help guide their investing journey. The best online brokers for beginners are easy to navigate, have strong educational features, provide excellent customer service, and offer a range of portfolio construction options. Some trading platforms for beginners also have low minimum balance requirements and offer demo versions to help you get started. We’ll explore the best brokers for beginners so you can better understand the strengths of each platform.

Best Online Brokers and Trading Platforms for Beginners of 2023

• Best Broker for Beginners: TD Ameritrade
• Best Broker for Investor Education: TD Ameritrade
• Best Broker for Customer Service: TD Ameritrade
• Best Broker for Ease of Trading Experience: E*TRADE
  

TD Ameritrade: Best Broker for Beginners, Best Broker for Investor Education, and Best Broker for Customer Service

TD Ameritrade: Best Broker for Beginners

Why We Chose It

TD Ameritrade is our choice for the best overall broker for beginners due to its strong educational commitment and an extensive array of investment resources. The platform deftly blends an expansive offering with an intuitive experience, all while providing a range of features, tools, and support that beginners will find beneficial in growing their investment expertise.

Pros & Cons

Overview

TD Ameritrade got its start in 1975, building a brand as a full-service broker in a discount package and as a leader in trading innovation, experience, and education over the years. In 2020, Charles Schwab announced that it had completed its acquisition of TD Ameritrade for $26 billion.

Where TD Ameritrade really shines for beginners is education, offering resources across a wide range of topics and in a variety of formats. Customer service is also readily accessible through a number of different channels, giving new investors peace of mind. Beginners will also find comfort with no balance requirements and low, transparent pricing.

TD Ameritrade also stands out for its intuitive and dynamic portfolio tools. Users of all backgrounds and investing preferences will find trading features that are customizable to their personal strategies, but beginners in particular will benefit from a well-executed design that makes it easy to get started. Navigation between mobile, desktop, and web versions is seamless and provides consistent experiences.

The company’s flagship trading platform, thinkorswim, offers a powerful combination of elite research, screening features, and calculators with backtesting capabilities, letting users test investment strategies on historical data. New product enhancements are continually rolled out as well, including updates to charting functionality and a portfolio digest feature announced in 2022. Demo accounts are also available so that investors can ease into the market.

Users report enjoying the impressive, intuitive trading tools and ongoing innovation as one of the top things to like about TD Ameritrade. Paired with low fees, outstanding customer service, and robust education resources, it's clear how TD Ameritrade resonates with beginner investors.

TD Ameritrade: Best Broker for Investor Education

Why We Chose It

TD Ameritrade’s broad range and depth of educational content sets it apart from industry competition. For beginners looking to improve their investment knowledge, TD Ameritrade has all the guidance resources necessary to enlighten your journey.

Pros & Cons

Overview

TD Ameritrade stands above the rest when it comes to the range and depth of education resources. Users have access to learning material across a wide variety of channels and formats across desktop, mobile, and web. The education center holds an extensive library of content that is easily searchable depending on your goals, investment knowledge, and topic of interest. Tutorials, podcasts, videos, webinars, and even investment coaching is available, and more.

TD Ameritrade successfully pairs education with technology so your learning experience continually improves. Suggested educational material is personalized based on your preferences, account history, and other investors in a comparable financial situation. As you grow your understanding of investing over time, the site adjusts recommended material to ensure it matches your interests and needs.

New investors who are looking for a hands-on learning experience will find that paperMoney is a powerful tool. This feature allows users to experience the flagship platform, thinkorswim, as an investment simulator so you can improve your market knowledge without investing real money. This tool is accessible on the device of your choice, making it easy to have this learning resource at your fingertips.

TD Ameritrade: Best Broker for Customer Service

Why We Chose It

TD Ameritrade provides exceptional client support, winning our category for best broker for customer service. By pairing an extremely well-rounded educational library with an accessible and responsive customer service team, TD Ameritrade empowers beginners on their investing journey.

Pros & Cons

Overview

Customer service is highly accessible through a variety of channels at TD Ameritrade, as it’s clear that the company places satisfied clients high on its list. Users will find live telephone support available 24/7 and chat functionality with a support representative through the thinkorswim mobile experience without needing to leave the app.

Investors can also conveniently reach out on social media, whether it’s through X (formerly Twitter) direct messages or Meta’s message platform. Contact by email is also offered as a way to get in touch. Brokers and TD Ameritrade financial advisors are accessible to investors, but fees may apply.

Users are impressed with not only the accessibility of the customer service team but also the speed and quality of responses. These aspects make it easy to see how TD Ameritrade came away as the winner of this category.

E*TRADE: Best Broker for Ease of Use

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, releasing more than a dozen app updates in 2022. These updates include enhancements 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 demo 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

TD Ameritrade and E*TRADE are both strong brokerage platforms with many outstanding qualities. They both have a solid menu of trading resources, expansive content libraries, research tools, and demo accounts to get started. Both have intuitive designs and site navigation to provide a smooth experience. All these factors help ease new investors into the market.

That said, TD Ameritrade takes the top spot overall as the best broker for beginners due to a marginally more robust educational experience and accessible customer service team. 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 either TD Ameritrade or E*TRADE 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 Accounts: 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 Accounts: 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 Accounts: 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.