Looking for the best online stock brokers for beginners? It’s easy for new investors to become overwhelmed investing in the stock market. From the risk of losses to a lack of knowledge to having little money to invest, it’s a challenge for many beginners to start investing for retirement. Nevertheless, the best online brokerage accounts for beginners can help start you down the path to investing and building wealth that will last a lifetime. But finding the best stock trading sites and accounts isn’t just about one single factor or another. Opening the right brokerage account for you depends on a combination of investment goals, expected returns, fees, trading platform, and customer service.
If you’re new to investing and looking for the best brokerage accounts for beginners, here’s a list of the top 5 options to consider, especially since most of them have minimal opening balance requirements.
Likely one of the best online brokerages for beginning investors is Betterment. There are many reasons for that statement. Betterment is known for following a very basic, yet very powerful investment approach. The company helps you make a portfolio that fits your needs, both short and long-term.
In an age where it’s sexy to make investing something it doesn’t have to be (e.g. complex), Betterment provides the confidence you’re doing what you need to set yourself up for retirement success. In a nutshell, Betterment asks you a series of basic personal finance questions and then puts you into a group of exchange-traded funds (ETFs) based on your particular circumstances. The portfolio they create is diversified and low-cost with the most minimal fees.
Betterment then re-balances and manages your investments all based on your given needs. It’s like having a real financial advisor without the high fees and expenses. The best part is that you can open a Betterment account with no minimum balance. If you’d like to read more about their platform, check out our Betterment Review.
Wealthfront is much like Betterment, and is the other “best” online broker for beginners. Both are robo-advisors so much of the investing in the stock market is done for you. You answer a handful of questions to let them know your needs and risk tolerance, and Wealthfront creates a custom portfolio for you.
When looking at Wealthfront vs Betterment, there are some differences to keep in mind. They both have the same focus of simplistic investing with an eye towards long-term growth. Both Wealthfront and Betterment also have very low-cost fee structures, making them much cheaper than any other financial advisor or planner. While Wealthfront offers a bit better diversification, Betterment requires nothing to open account.
You can open a Wealthfront account for as little as $500, and start investing today. If you’d like to read more about their platform, check out our Wealthfront Review.
Motif Investing is part robo-advisor, part DIY investing – either of which qualify them to be among the top online brokerages for new investors. Motif started off with a unique approach – allow investors to create their own ETFs known as “motifs”. Motifs work quite simply – you create a fund with up to 30 stocks or ETFs for one low price of $9.95.
What happens if you don’t know what stocks or ETFs to pick? Motif makes it simple by providing over 100 unique motifs targeting specific industries, trends, geographies, etc. You can pick something very traditional to something more obscure – all at the same low price.
If a motif doesn’t sound like your thing and you’d like to invest in individual stocks, Motif Investing offers the lowest price in the industry at $4.95 per trade. Motif Investing also makes it easy for beginners as you can open a Motif account for a little as $250. If you’d like to read more about their platform, check out our Motif Investing Review.
Scottrade is more of a traditional discount brokerage. You completely self-direct the investing in a variety of stocks, mutual funds or ETFs. That being said, Scottrade is one of the most well-known players in the online brokerage industry after being in business over 30 years, so rest-assured, you are putting your money with one of most stable financial institutions in the United States.
What makes Scottrade one of the best online brokerage accounts for beginners is their educational offerings. If you’re new to investing, you’ll benefit from their online courses and webinars geared towards helping you start investing. Additionally, Scottrade is among the leaders in investment selection, so you have plenty of options to consider. Lastly, Scottrade has a competitive $7.00 per trade commission price and an extensive nationwide branch network.
One thing to keep in mind with Scottrade is they require an opening balance of $2,500. However, you can save on your taxes and open a Scottrade IRA account for as little as $500. If you’d like to read more about their platform, check out our Scottrade Review.
Ally Invest (TradeKing)
The final best online broker for beginners is Ally Invest, formerly known as TradeKing. Ally bought TradeKing because, like Scottrade, the investment firm was geared towards self-directed, do-it-yourself investors.
Ally Invest, through TradeKing, now offers extensive educational offerings as well as a huge social media presence to provide assistance to investors in real-time. Like Motif Investing, Ally Invest only charges $4.95 per trade, making the discount broker the cheapest in the industry. This commitment to being low-cost and maintaining a cheap pricing structure can be seen throughout TradeKing’s services.
Finally, TradeKing is like Betterment in that you can open a TradeKing account with no minimum balance. If you’d like to read more about their platform, check out our Ally Invest Review.
Best Online Stock Brokers
The best online brokerage accounts for beginners serve one purpose – helping you to start investing. The brokers above make it easy to open an account and start investing for retirement. For reviews of other brokerage options, check out our list of best discount brokers. And if you need a place to track your income for tax purposes, make sure to check out a Quickbooks 2019 alternative or other accounting software.