Best Online Stock Brokers For Beginners

Blain Reinkensmeyer

Published by Blain Reinkensmeyer

Monday, February 19th, 2018

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The annual review sets the official industry benchmarks. Our data is used by executive teams, and our ratings are referenced on earnings calls, national TV commercials, US Senate hearings, and throughout the web. We spend more than one thousand hours testing online brokerage accounts every year. Industry leaders trust us because our rigorous testing is totally independent and 100% unbiased.

An online stock broker can offer beginners three essential qualities. The first and most important is a user-friendly website and platform. After all, what good is investing online if you can’t figure out how to perform research or place an order? Second, a robust offering of educational content is crucial. The third quality is having access to quality research.

In our assessment and ranking of online broker offerings for rookie investors, we have looked beyond just having investor videos or archived webinars. Instead, we have weighted the quality and quantity of each education type. We spent endless hours navigating research portals, testing website usability, watching videos and webinars, and even reading client magazines to find a true champion.

Best Online Brokers for Beginners

Here are the top five brokerages for beginner investors, based on over 140 variables.

Beginner Investing

Based on the above criteria, our No. 1 pick for beginners is TD Ameritrade. New investors have access to a user-friendly website, hundreds of monthly webinars, videos, and free premium courses and quizzes through its education subsidiary, Investools, excellent research, access to 364 branch offices for live seminars, and more. In fact, TD Ameritrade is the only broker to gamify the learning experience, offering customers a points system tied to progress tracking, and even badges to encourage continued learning.

TD Ameritrade education learning center

The Ticker Tape portal, together with the quarterly thinkMoney client magazine, are two other great offerings from TD Ameritrade (Charles Schwab is the only other broker that mails out a client magazine throughout the year). All data considered, TD Ameritrade was the only broker to score a perfect 100% in our 2018 assessment of investor education.

td ameritrade thinkmoney magazine

Our one gripe with TD Ameritrade is that its virtual trading environment, community chat rooms, and swim lessons are offered only through the thinkorswim desktop platform, which isn’t as easy to learn and use as the broker’s web platform, Trade Architect. This minor caveat aside, TD Ameritrade is hands-down the best environment for new investors.

TD Ameritrade Trade Architect

Our second pick, Fidelity Investments, offers new investors access to industry-leading research, an easy-to-use website, and excellent on-site education. In Fidelity’s learning center, content is sorted by experience level, category, and content type. The depth of content is impressive, with articles, videos, and webinars, as well as infographics and courses. Courses create a roadmap of both articles and videos to follow, with each step being tracked for completion so you can quickly pick up where you left off.

Fidelity education course

While Fidelity’s learning center is impressive, the broker does a fantastic job with its in-house market research and financial educational articles, Fidelity Viewpoints. Of all the brokers, I find myself sharing and bookmarking Fidelity Viewpoint articles the most. As far as subject matter goes, the broker’s retirement education is exceptional.

Fidelity account stock quote

In third place, earning a recommendation based on its platform alone, is OptionsHouse by E*TRADE. OptionsHouse’s web-based platform is a great environment for any beginner. It’s easy to navigate, fast, and rich with usability upgrades perfect for casual investors. For example, personal notes can be added to stock charts as well as any new trades being made (trade tagging also allows for post-trade analysis).

optionshouse etrade platform

While OptionsHouse by E*TRADE is a natural winner based on its user-friendliness, its research capabilities are unimpressive. Instead, investors should rely on E*TRADE’s website to perform research, watch educational videos, and read a large selection of articles covering the full spectrum of investment-related topics, including stocks, options, ETFs, mutual funds, bonds, and retirement.

Where E*TRADE’s website stands out is its clean filtering options within the learning center. Content can be filtered by ratings, skill level, type, or category. That said, once you click through to read an article, the primary drawback becomes navigation; there is no easy way to navigate back to the education home without clicking the back button on your browser. Also, while TD Ameritrade and Fidelity generated nearly all their content in-house, most of the material in ETRADE’s education center is provided by a third-party, which gives E*TRADE’s competitors an edge in terms of quality.

The other two top brokers for beginners include Charles Schwab and Capital One Investing. Charles Schwab provides a diverse offering of education covering all aspects of the stock market. With so much available to customers, Charles Schwab’s Achilles Heel is the way its learning center is organized. The broker made a big leap forward in 2017 with the launch of Trading Paths, which are hand-curated collections of content organized by topic. Trading Paths has a good foundation, but there is still room for improvement in 2018 as the experience is being developed.

Charles Schwab learning center

Although Capital One Investing has less to offer in terms of educational content and research, its website is well designed and easy to use. Capital One Investing provides just enough for casual investors to stay engaged. Placing trades is a breeze, managing and analyzing one’s portfolio is seamless, and it’s difficult to feel overwhelmed on the site.

Finally, navigating the challenges of being a beginner is not easy. That’s why having a quality broker to instill confidence while new investors are learning the rules of the game will pay big dividends down the line.

TD AmeritradeFidelity E*TRADECharles SchwabCapital One Investing
Has Education - Stocks Yes Yes Yes Yes Yes
Has Education - Options Yes Yes Yes Yes No
Virtual Trading Yes Yes No No No
Desktop Platform (Windows) Yes Yes Yes Yes No
Web Platform Yes Yes Yes Yes No
New Investors 5 5 4.5 4.5 4

Online Trading Basics

When buying and selling stocks as an online trader, you are buying shares of a company that is publicly listed on a stock exchange. It is important to understand that trading stocks is different from dealing in ETFs (exchange traded funds), options (derivatives contracts), and CFDs (contracts for difference). Buying shares means taking actual ownership in a company.

TD Ameritrade trade ticket

To place a stock trade, you fill out an order form with your online brokerage. The typical trade form includes the stock symbol, buy / sell, quantity, order type, and time in force.

The stock symbol is also known as the ticker, for example Apple's stock symbol is AAPL, Disney's is DIS, and Google's is GOOGL. To pull up a stock quote, you use the company's symbol; for example, here is a stock quote for Apple (AAPL).

The most common order type is a market order, meaning to buy or sell at the national best bid offer (NBBO). The other most popular order type is a limit order.

Finally, the time in force is the period you allocate for the trade to be active. The default option is "Good-until-cancelled", which traditionally means expiration within 60 days. Time in force is also used to designate trades for pre- and post-market hours.

Closing Thoughts

Over the years the online brokerage industry has realized that ease of use, quality research, and education centers that boast organization, variety, and depth are crucial components of a thorough offering for beginners. Each attribute is dependent on the other, and while quality education shouldn’t be the only reason to choose a broker as a beginner investor, it is a nice complement to the primary offering.

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All pricing data was obtained from a published web site as of 09/01/18 and is believed to be accurate, but is not guaranteed. The staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page. For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.

TD Ameritrade, Inc. and are separate, unaffiliated companies and are not responsible for each other’s services and products. Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading privileges subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options. Offer valid for one new Individual, Joint or IRA TD Ameritrade account opened by 9/30/2018 and funded within 60 calendar days of account opening with $3,000 or more. To receive $100 bonus, account must be funded with $25,000-$99,999. To receive $300 bonus, account must be funded with $100,000-$249,999. To receive $600 bonus, account must be funded with $250,000 or more. Offer is not valid on tax-exempt trusts, 401k accounts, Keogh plans, Profit Sharing Plan, or Money Purchase Plan. Offer is not transferable and not valid with internal transfers, accounts managed by TD Ameritrade Investment Management, LLC, TD Ameritrade Institutional accounts, and current TD Ameritrade accounts or with other offers. Qualified commission-free Internet equity, ETF or options orders will be limited to a maximum of 250 and must execute within 90 calendar days of account funding. No credit will be given for unexecuted trades. Contract, exercise, and assignment fees still apply. Limit one offer per client. Account value of the qualifying account must remain equal to, or greater than, the value after the net deposit was made (minus any losses due to trading or market volatility or margin debit balances) for 12 months, or TD Ameritrade may charge the account for the cost of the offer at its sole discretion. TD Ameritrade reserves the right to restrict or revoke this offer at any time. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. Please allow 3-5 business days for any cash deposits to post to account. Taxes related to TD Ameritrade offers are your responsibility. Retail values totaling $600 or more during the calendar year will be included in your consolidated Form 1099. Please consult a legal or tax advisor for the most recent changes to the U.S. tax code and for rollover eligibility rules. (Offer Code 264) TD Ameritrade Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2017 TD Ameritrade.