If you are looking into buying shares of stocks of any kind, you will first need to get an online broker account. Choosing which broker you use is one of the biggest decisions you will make.
Before you go looking into which online broker you should use, you need to think about a few things. These things include the type of platform you need or want if you would like access to educational resources and other things of nature. Newcomers to the industry may find this to be a daunting and scary task, but that is what we are here to help with.
We are going to break down what you need to look for in a broker and then give you some options for the best online brokers available for those just starting out.With markets being everchanging and unpredictable, you need to be sure you can count on your broker.
Best Online Brokers for Beginner Traders:
Interactive Brokers - Best Package For Starters
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Interactive Brokers offers services for both retail and institutional investors. It stands out from the pack as a broker that is best for gaining access to the worldwide markets. Interactive
IB offers a complete brokerage service. It not only caters to individual clients, but prop traders, family offices, hedge funds, money managers, and small businesses. This makes Interactive suitable for global traders. The company recently aggressive campaigning to encourage retailer traders, who can benefit from the experience, background, and resources the company gained through big business dealings.
While it may not be the cheapest broker around, the access to global financial markets, competitive pricing, and premium technology make Interactive an interesting proposition. So, if you’re in need of a professional, regulated, global broker, who brings together institutional clients and retail traders for mutual benefit. Interactive is a solid choice.
- Stocks - 125 markets worldwide
- Options - 40+ years’ experience – low commissioning gives access to sophisticated trading strategies
- Futures - Future options, commodities, futures, on 35 market centers in the world
- Forex - Transparent low commissions to trade 23 currencies worldwide
- Metals - Spot gold and silver on London bullion market
- Bonds - Access a full universe of U.S. government securities, corporate bonds, municipal securities and more
- ETFs - A large variety of ETFs, leveraged and short included
- Mutual Funds - Over 18,000 funds from 270 different fund families
- EFP - Exchange for Physical – sell stock and buy it back for future delivery
- Hedge Fund Investing - Choose from a wide range of independent hedge funds available on the IBKR’s network
- Easy to Navigate Website
- Free Trial
- No Pressure To Open An Account
- Amazing Educational Services
- Turnkey Solutions For Institutions
- IBKR Lite Account Needs Improvement
- Heavy Focus On Institutions
- High Inactivity Fees
Ally Invest - Best For Technology Experience
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Ally Invest is a leader in the digital financial services niche, assisting businesses with dealer financial services, corporate finance, banking, and direct to consumer home loans. Ally Invest offers two methods of investing: Self directed trade or through a managed portfolio.
Self directed trade allows hands on investors to trade stocks, options, and ETFs in a low commission environment. However, Ally also considered those potential investors with limited knowledge or those who don’t want the responsibility for investing their own funds. Through its managed portfolios, every type of individual investor has an option with Ally. Additionally, the minimum amount is just $100.
Ally Invest is a great option for those who are interested in margin trading. The company’s margin account rates are among the lowest in the industry, and there is a range of products to trade. However, the low commission structure also makes it competitive for any U.S. citizen looking for a broker. This makes Ally Invest a solid all rounder that caters to experienced traders and beginners.
- Stocks - Commission-free trading on all U.S. exchange-listed stocks
- ETFs - Wide selection from Vanguard, GlobalX, IShares, and more
- Options - Option-trading for just $0.5/contract
- Bonds - Government and corporate bonds to diversify the portfolio
- Mutual funds - Invest in various mutual funds worldwide
- Forex - 50 F.X. currency pairs to trade the world’s largest market
- Margin account - Trade on margin by borrowing from the broker
- Socially responsible - Invest in companies with environmental-friendly initiatives
- Tax optimized - Maximize your investment when making after-tax contributions to an investment account
- Core - Fixed-income, internationally diversified portfolio
- Income - High dividend yields while maintaining a conservative risk profile
- Managed Portfolios
- Simplified Process To Transfer Individual Stocks
- SIPC Protection
- No Minimum Amount To Open And Fund An Account
- 24/7 Support For Managed Portfolios
- Demo Forex Account Available
- Dedicated F.X. Platform + MetaTrader
- Low Margin Account Rates
- Little Or No Information On Several Products Offered To Trade
- Unclear Pricing Policy For Fixed-Income And Mutual Funds
- Markups on Fixed-Income Trading
- Poor Trading Education
- Little Details On The Main Trading Platform
- No International Clients Accepted
E-Trade - Best Education Source For Beginners
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E-Trade is a complete financial advisor and brokerage service for residents in the USA.
Both the desktop and mobile trading platforms offer in house assistance and tutorials. The E-Trade knowledge center covers most investment services and can be an invaluable resource for newbies who need an introduction into the world of financial market investments.
E-Trade’s Brokerage Account, its flagship account, allows members to reach an abundance of markets, providing superb diversification potential. However, regardless of whether you’re an individual trader, self employed, future retiree, or small company, E-Trade has something to offer everyone. This company has made investing transparent and diversified.
This platform suits active and passive investors. Active traders are likely to welcome the commission structure. E-Trade offers commission free trading on most stocks, mutual funds and ETFs, and low commission on options and futures. Passive investors will appreciate the variety of managed portfolios, as the advisory arm is one of E-Trade’s core strengths. E-Trade also has excellent retirement planning assistance, creating an ideal environment for beginners, particularly those new to the stock market.
- Mutual funds
- Rollover IRA
- Roth IRA
- Traditional IRA
- Beneficiary IRA
- E-Trade Complete IRA
- IRA for Minors
- Small Business Retirement Accounts
- Managed Accounts
- Futures Trading Options
- Full Cover of US Market
- Knowledge Center
- Commissions And Fees Exceptions
- Poor Promotions, Only For US Residents
Zacks Trade - Best For Active Individuals Traders
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Zacks Trade is a popular U.S. Broker that may offer access to global financial markets, but it is less well known internationally. However, Zacks does accept international clients, which puts this company in a small group of regulated brokers that target clients globally.
Zacks has a focus on international traders, offering low commissions and products catered more for individuals and active traders. There is also a simple and easy to understand commission and fee structure.
However, there are limited products on offer. Zacks Trade does not facilitate Forex trading. Additionally, many of the products have limited information. This focus on a limited number of products aims to create better trading conditions. Just be aware that Zacks lacks trading education and would benefit from a clearer presentation of account types and information.
- ETFs trading
- Mutual funds
- U.S. government bonds
- One Of The Lowest Margin Rates In The Industry
- Powerful Research Department
- No Extra Charges For Broker-Assisted Trades
- Extra Layer Of Security
- Offers International Accounts
- No minimum deposits
- Withdrawal Fee
- Difficult To Find The Account Types Offered
- Minimum Deposit Requirement
- Poor Presentation Of The Products Offered
- No Trading Education Provided
Robinhood - Best For Amateur Traders
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Robinhood has been around for over a decade, and as the name suggests, the overall aim was to democratize finance for all, slashing the cost of trading stocks for U.S. residents.
Today, Robinhood is one of the most popular brokerage platforms. It is also due to expand its services to the U.K. in the near future. With its introduction of fractional shares, Robinhood caters to traders who are cost sensitive. The company also offers access to cryptocurrency markets.
The target client for this company is the younger generation. This brokerage house is challenging the traditional broker, making waves in the industry. Robinhood understands that while traditional brokers have more account types and cover more markets, they lack the ability for quick responses to customer changes. So, they aim to give clients the power to participate without the bulk from the traditional industry.
Although it has caused a great deal of damage to lots of businesses, Robinhood has enjoyed additional business. With little to no sporting events for people to bet on, newbie investors have turned to Robinhood. This is a sure indication that over the coming years, Robinhood will continue to grow.
- Stocks and funds
- Simple and User Friendly
- Low Trading Costs
- Fractional Shares
- Easy to Open an Account
- Crypto Trading
- Extensive, Easy to Understand Trading Education Section
- Only Market Orders For Fractional Shares
- Fractional Shares Illiquid Outside the Robinhood Platform
- Margin Trading Available on Robinhood Gold Accounts
- Only US Clients
- Limited Account Types