8 Best Online Brokers for Beginners of February 2024 (2024)

• United States

• United Kingdom

• Germany

• India

• Australia

• Italy

• Canada

In our testing, we compared more than 100 different features and variables for 21 of the leading U.S. online brokers. We dug deep to assess the broad selection of tools and trading features offered by each platform, details that have become even more important for choosing an online broker now that almost all major brokerages have slashed their trading commissions and fees to $0. But beginners should be alert to myriad additional charges that brokers may levy.

The survey reviewed six categories: commissions and fees, platform and technology, range of product offerings, research and education, account security and customer service. In our side-by-side comparisons, we gathered thousands of individual data points to arrive at our conclusions.

For the best broker for beginners, we gave the most weight to ease of use, educational resources and customer service. Additionally, we paid close attention to platform and technology and commissions and fees.

We opened live accounts at each of the brokers in our survey for hands-on testing of their services. Our broker reviews were conducted by a seasoned market professional with over 20 years of experience in the markets, both as a broker and a retail investor.

To learn more about our rating and review methodology and editorial process, check out our guide on how Forbes Advisor rates investing products.

Brokers, also referred to as brokerages or stockbrokers, are middlemen who help people access the stock market. They buy and sell securities in financial markets on behalf of their clients.

In the past, brokers and brokerage firms worked with their clients face-to-face or by phone, but those days are largely over. For the vast majority of people today, brokers are almost exclusively online services accessed via the internet,and that’s why they’re called online brokers.

The terms online brokerage and online broker are used interchangeably. Not long ago, online brokers were more commonly known as discount brokers. That’s because they offered lower fees and commissions than conventional brokerages, who employed armies of employees in offices located across the country.

Online brokers let you follow markets and trade securities from anywhere, as they are almost universally available via mobile apps. They provide fast execution of trades, and most importantly they are much less expensive than a traditional broker.

You can still find conventional brokers who work with you face-to-face, but they have evolved into very expensive bespoke services for high-net-worth individuals.

Online brokers are your personal gateway to financial markets. They help you buy and sell the securities that make up your investment portfolio.

When you open an account with an online broker, you get access to a trading platform that provides you with a wide range of investing tools. Every online brokerage platform is different, ranging from very simple interfaces that permit only the most basic trades, to sprawling, complicated trading platforms designed for professionals.

When it comes to trading securities, online brokers route your orders to markets and then act as the custodian of your assets—or route them to a dependable custodian. It works with market makers who match buyers and sellers, and they handle settlements—the exchange of cash for securities.

If you are a hands-on investor who wants to manage your own portfolio, you need an online brokerage account. Signing up for an account with an online broker gives you tools for trading stocks, bonds and funds, plus more exotic assets like futures and options.

An online brokerage account works similarly to a bank account—you deposit money and make withdrawals as needed. But instead of investing in a certificate of deposit or a savings account that earns an APY, you buy securities with the goal of earning a decent return on your investment.

It’s important to keep in mind that these are taxable investment accounts. Income payments and capital gains that you earn when you sell securities are subject to taxation. Depending on the type of security and the length of time you’ve owned it, your profits may be subject to regular income taxes or capital gains taxes.

Contrast this treatment with tax-advantaged retirement accounts, like a 401(k) or an individual retirement account. These retirement accounts give you valuable tax breaks; depending on the type of account, you may earn an upfront tax break the year you make contributions or tax-free withdrawals in retirement. Additionally,you are sheltered from capital gains taxes when you buy and sell assets in the account.

The brokerage you choose depends upon your own individual investment needs and goals. For example, if you’re looking for individual support from your online brokerage, you might want to try one of our best brokerages for customer service, such as Charles Schwab or Fidelity.

On the other hand, if you’re simply looking for a broker that is easy to use, E*Trade or Robinhood might be the best fit for you.

Every individual has different approaches to handling their money. These approaches are based on different factors, including present and future goals, time until retirement and lifestyle expectations.

There’s no one-size-fits-all approach when it comes to brokers. We recommend that every individual do their own research to determine which online brokerage might best suit them.

Some investors look to their investments as a source of income while others use it is a means to grow or preserve their wealth. Take your financial goals into consideration when selecting a broker and make sure it can accommodate your objectives.

Pay close attention to commissions and fees, especially for the markets that are the most important to you. Also consider the technology offered by the broker and if it fits your investing style, whether you are a long-term investor or an active trader.

A good broker is much more than a venue to execute trades. Look for a broker that can assist you with quality research and educational materials to aid your development as an investor and help you make winning decisions in the markets.

Finally, keep in mind how important it is for you to be able to access live customer support. Some brokers place a great deal of emphasis in this area, with live support available by phone and chat 24/7. Others prefer to focus more on technology and have bare-bones customer service available by email or text chat only.

Once you’ve researched online brokers and selected the best option for your investing needs, here are the steps to take to open a brokerage account.

1. Visit the brokers website. The application process for brokerage accounts happens online, although for some accounts you may be asked to sign and return paper documents that you would receive by mail in order to complete the account opening process.
2. Locate the new account section. Look for menus or sections labeled “Open an Account,” “Get Started” or something similar.
3. Select the type of account you want. Once you’ve navigated to the new account section, you’ll be presented with a menu of different types of accounts to choose from: including retirement, banking and managed accounts. Choose the brokerage account option that is right for you. You may also be able to choose an individual or joint account, depending on whether you plan on sharing the account with a spouse or partner.
4. Provide your personal information. Information required for a brokerage account typically includes your name, address, contact details, Social Security number (or equivalent identification number),and salary and employment information.
5. Complete the application. Follow the instructions provided by the brokerage firm to complete the application. You may need to answer additional questions related to your investment goals, risk tolerance and financial situation.
6. Review the account terms. Carefully read through the terms associated with opening the account. Make sure you understand the fees, trading policies, account minimums and other important information.
7. Fund your account. Account approval may happen immediately or take several days. Once your application is approved, it’s time to fund your account. Options may include bank transfers, wire transfers, or checks.
8. Familiarize yourself with the platform. Take some time to explore and familiarize yourself with the brokerage’s trading platform. Learn how to place trades, access research and market data, set up alerts, and manage your account.

Remember, these steps may vary slightly depending on the brokerage firm you choose. It’s essential to carefully read and follow the instructions provided by the firm during the account opening process.

• Investing Basics: What Is A Brokerage Account?
• How To Open A Brokerage Account
• Buying on Margin: What Is a Margin Account?
• Cash Account vs Margin Account: Which Do I Need?
• What Is A Registered Investment Advisor (RIA)?
• How To Invest With a Robo-Advisor

Dan Blystone has over a decade of experience in the trading industry. He started as a floor clerk at the Chicago Mercantile Exchange (CME) in the currency futures pits. Then progressed to working as a proprietary trader off the floor trading the bund overnight. Later, Dan worked as a retail futures broker. He founded TradersLog.com, which has received tens of millions of page views to date. Dan worked with many leading industry experts on creating educational webinars and archiving them on their YouTube channel.

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