Invest Money In Stocks Online

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Are you ready to begin investing but aren't sure where to start?

We'll help you get going with our list of best online stock brokers for beginners. We know everyone's financial circumstances and goals are different, so we've chosen a variety of brokers to help you find one that meets your needs.

We've also included a guide to explain what to look for in an online stock broker, plus a few terms you'll want to be familiar with as you start investing.

The Ascent's best online stock brokers for beginners

Research: TD Ameritrade
Mobile investing: Robinhood
Membership ecosystem: SoFi Active Investing
Low fees: Ally Invest
Mobile platform: E*TRADE
Customer support: Merrill Edge® Self-Directed
Investors: Fidelity
Retirement investors: Charles Schwab
Mobile investing and banking: Cash App Investing

Ratings Methodology

Bottom Line

TD Ameritrade stands out as one of our top all-around brokerages with outstanding tools and products, in-depth and comprehensive research, and no account minimums.

Read Full Review

Bottom Line

A simple-to-use investing experience and commission-free trading are essentials for beginner investors, and Robinhood delivers on all these fronts, and more.

Read Full Review

Fees:

$0 for stocks, ETFs, options, and cryptocurrencies

Bottom Line

A clear standout with a modern experience. Beginners and long-term investors may find the most value, particularly those interested in stocks, cryptocurrencies, ETFs, and buying fractional shares.

Read Full Review

Fees:

$0 for stocks, 1.25% for cryptocurrencies

Bottom Line

Ally Invest impresses with $0 commissions and $0 account minimums. It's a great choice for those looking for one of the best trading platforms from which to make cheap trades.

Fees:

$0 stock and ETF trades

Bottom Line

E*TRADE manages to cater to active traders with one of the best stock trading platforms, while also appealing to long-term investors with thousands of mutual funds and ETFs that can be traded for free.

Bottom Line

Merrill Edge sports $0 stock and ETF trades, strong research offerings, and fantastic customer support. It's a solid option for all investors, and particularly attractive for Bank of America customers.

Fees:

$0 stock and ETF trades

Bottom Line

Fidelity combines $0 commissions, top-notch research, and an excellent mobile app, all in a simple stock trading platform for beginners. With $0 account minimums and zero-expense-ratio index and mutual funds, this is one of the most affordable brokers.

Bottom Line

Charles Schwab has aggressively slashed fees on its mutual funds and ETFs, eliminated common account fees, and lowered its base commissions to $0 per trade, making it one of the least-expensive brokers.

Fees:

$0 stock and ETF trades

Bottom Line

A great fit for stock-only investors seeking a no-frills, easy to use platform. Cash App is also one of the few platforms that offers the ability to buy fractional shares.

Fees:

$0 for stocks, fees vary for cryptocurrencies

What is a stock broker?

A stock broker is a trading platform (or person) that facilitates the buying and selling of marketable securities like stocks and exchange-traded funds (ETFs). Through a stock broker, you can open a brokerage account, a specialized financial account designed to hold investments and cash.

The term is often used interchangeably with "brokerage," which is technically the name for a business that employs brokers or acts as a broker to facilitate trading.

When you want to buy stock in a company, you can't simply call up the company and buy shares, and you can't just walk into your local bank and invest. You need a specialized brokerage account, and that's where stock brokers come in.

What are the different types of online stock brokers?

There are two main types of online stock brokers: discount and full-service. They each come with distinct costs and levels of service.

Discount broker

A discount broker, also known as an online discount broker, is a company that lets an investor buy and sell securities online. As a customer, you can direct the process of buying and selling stocks or sign up for an account with a robo-advisor that'll automate your investments. Many discount brokers have features that help you decide how to direct your trades, but typically there's no human broker taking and filling your orders.

True to their name, discount brokers are much cheaper than full-service brokers, and most offer zero-commission stock trading. For the vast majority of investors -- especially the beginning investor -- a discount broker is the best choice. That's why our picks for the best trading platform for beginners are exclusively discount brokers.

Full-service broker

Think of a full-service broker as an old-school broker. It's a firm that usually operates out of a physical office where an actual person, also called a stock broker, takes and executes clients' buy and sell orders. A full-service broker might also provide personalized investment planning services, such as stock-buying advice, tax guidance, and retirement planning help.

Full-service brokers are far more expensive than discount brokers, given the costs of human advisors and brick-and-mortar locations. But costs have generally come down over the past few decades as they face competition from online brokers, aim to make investing more accessible, and gain access to tools to automate work on their end.

Full-service brokers are best suited to high-net-worth investors who want a personal level of service and dedicated investment portfolio management.

What type of stock broker do I need?

The best type of broker depends on your personal situation, so no single type of broker will be right for everyone. However, for most beginners, the low-cost structure of a discount broker makes more sense. Plus, discount brokers are becoming more feature-rich over time, with educational resources, stock research, and other valuable features available at no additional cost.

How to pick the best online brokerage account

There's no perfect broker for everyone, but here are some of the important factors to keep in mind as you're looking for an online stock broker:

Cost structure: Most online brokers charge no commissions for online stock and ETF trades (what you'll generally focus on as a beginner) -- but many do charge commissions or fees for more complex moves like options trading, mutual funds, and other products.

Account minimums: Some online brokers charge a minimum deposit to open an account, anywhere from $5 to $500, and some don't charge anything at all. We've focused our picks on brokers that don't have account minimums. These low-barrier-to-entry brokerages let anyone get started investing, even without a ton of capital.

Variety of funds: Picking individual stocks isn't right for everyone, especially beginners. The best stock brokers for beginners offer low-cost exchange-traded funds and no-fee mutual funds to help you invest wisely without a ton of stock market knowledge.

Account options: Within the realm of stock brokers, you can choose between a cash account and a margin account:

Cash account: You can only spend the money you have sitting in your account.
Margin account: You can borrow money from your broker to invest with. Trading on margin is a risky prospect, though, and isn't usually a great idea for beginner investors.

Features and support: If you simply want to stick a recurring amount of money into low-cost ETFs and let your money grow, a no-frills investing app could be all you need. If you're interested in taking your investing to the next level and learning how to choose individual stocks and direct your portfolio yourself, look for a platform that includes educational resources, research, news, and customer support that'll help you make smart choices as you learn the ropes -- and one that offers more advanced trading features you can use as your knowledge grows.

Research: Many online brokers offer access to research so you can read more about market sectors as well as individual stocks, ETFs, and mutual funds.
News: Some online brokers offer news updates so you can keep tabs on companies and happenings in the stock market in general.
Customer support: You should be able to pick up the phone and speak to a live person who can help you navigate any issues you experience.

Educational resources: When you're new to investing, you may not be familiar with key terms that are necessary to manage your account. And if you don't know what a mutual fund is, you probably shouldn't go out and buy one. Many online brokers have an educational resources section loaded with information that can help you learn more about investing and gain confidence.

There is no one best investment platform for beginners -- which costs and features you need depends on your financial goals.

Where can you buy stocks?

While traditional discount and full-service brokers are where most investors go to trade stocks, they're not the only options for beginner investors.

The market is flush with options to buy stocks through mobile apps that also support other financial needs, like budgeting, banking, and cash transfers. The investing and banking app Acorns as well as Square's Cash App are great options for buying stocks with micro investments and managing an array of money needs in one place.

Many online brokerages also offer a robo-advisor service -- some exclusively operate this way.

Instead of working with a human broker or self-directing your stock trading account, you use a robo-advisor to set your portfolio on cruise control. You input your financial goals, and algorithms work like dedicated brokers to do the buying and selling for you. Robo-advisors are a low-cost solution for new and hands-off investors.

Learn more: How to Buy Stock: 6 Steps for Beginners

What do I need to open an online brokerage account?

The process for opening a brokerage account is similar to the process for opening a checking or savings account. If you're using an online broker, it should take just a few minutes, and it'll involve filling out a few simple forms.

To expedite the process, have this information available:

Social Security number (SSN): Your broker needs your SSN for identity verification and to prepare year-end tax forms. If your account earns interest, receives dividend payments, or earns a profit (or loss) through sold investments, you'll have to report those on your tax return.
Driver's license or other government-issued ID: If you don't have a driver's license, you can typically use another state-issued ID or a U.S. passport to verify your identity.
Funding method: The easiest way to fund a new brokerage account is by an ACH transfer from your bank account. So have your bank routing and account numbers or online banking password handy. Alternatively, you can mail a check or wire money (usually for a fee), and your broker might have additional funding options.

Trading commissions and account minimums

Trading commissions and account minimums are largely a thing of the past -- especially for online stock brokers. Almost no online broker or investing app charges commission fees on basic trading, and most let you open an account with $0 deposited, or just a few dollars.

However, most still require a minimum amount of money to use more complex features, such as margin investing. And $0 commission typically applies to stock and ETF trades; some brokers charge commissions for trading options and mutual funds, among other products. Take a look at a broker's full fee schedule before you open an account to make sure it makes sense for how you intend to invest.

Additionally, note that ETFs, mutual funds, and other types of funds you invest in usually come with fees of their own, called an expense ratio. This is a cost outside of your broker's control, but your broker will usually let you know the expense ratios for funds it lets you invest in.

Why commission fees matter

Here's why trading commissions are so important: Say your broker charges a $6.99 commission for online stock trades and you have $1,000 to invest. You want to spread your money across a portfolio of five stocks.

To make your initial investments, you'll pay nearly $35 in trading commissions. On a $1,000 investment, you're effectively starting with a 3.5% loss in your portfolio.

Plus, you'll pay another $6.99 each time you add to one of your stock positions. If you're planning to build up your portfolio over time, it's not hard to see how this can cost you thousands of dollars over the years.

Keep in mind the account minimum

Most major online brokers -- including all of the brokers in our list -- have no account minimum. This historically hasn't been the case. When I opened my first brokerage account nearly 20 years ago, I needed to deposit $2,000 just to get started.

A low- or no-minimum-deposit requirement lets investors who don't have a ton of spare capital get started investing early, so you can gradually build your first investment portfolio and take advantage of long-term gains.

Which trading platform is best for beginners?

As a beginner investor, you may be working with limited funds, and you may need a bit more guidance getting started. That means you might benefit from a broker with no account minimum and more educational resources. Here's a list of brokers to consider.

Broker/Advisor	Best For	Commissions	Next Steps
TD Ameritrade Rating image, 5.0 out of 5 stars.	Rating image, 5.0 out of 5 stars.	Best For: Research	Commission: $0 stock trades	Open Account
Robinhood Rating image, 4.5 out of 5 stars.	Rating image, 4.5 out of 5 stars.	Best For: Mobile investing	Commission: $0 for stocks, ETFs, options, and cryptocurrencies	Open Account
SoFi Active Investing Rating image, 4.0 out of 5 stars.	Rating image, 4.0 out of 5 stars.	Best For: Membership ecosystem	Commission: $0 for stocks, 1.25% for cryptocurrencies	Open Account
Ally Invest Rating image, 4.5 out of 5 stars.	Rating image, 4.5 out of 5 stars.	Best For: Low fees	Commission: $0 stock and ETF trades	Read Review
E*TRADE Rating image, 4.5 out of 5 stars.	Rating image, 4.5 out of 5 stars.	Best For: Mobile platform	Commission: $0 stock trades	Read Review
Merrill Edge® Self-Directed Rating image, 4.5 out of 5 stars.	Rating image, 4.5 out of 5 stars.	Best For: Customer support	Commission: $0 stock and ETF trades	Read Review
Fidelity Rating image, 5.0 out of 5 stars.	Rating image, 5.0 out of 5 stars.	Best For: Investors	Commission: $0 stock trades	Read Review
Charles Schwab Rating image, 4.5 out of 5 stars.	Rating image, 4.5 out of 5 stars.	Best For: Retirement investors	Commission: $0 stock and ETF trades	Read Review
Cash App Investing Rating image, 4.0 out of 5 stars.	Rating image, 4.0 out of 5 stars.	Best For: Mobile investing and banking	Commission: $0 for stocks, fees vary for cryptocurrencies	Read Review

FAQs

A brokerage fee is a fee you'll be charged to use a broker's service. These fees can apply to both discount brokers and full-service brokers who offer stock-picking advice.
Fractional shares let you buy a portion of a share of a company rather than a full share. If a share of a given company costs $1,000 but you only want to invest $250, fractional investing lets you buy a quarter of a share.
A paper trading account lets you go through the motions of buying stocks without using actual money. It's a good way to learn the ropes of investing.
You can buy stocks through discount and full-service brokers. You can also use a robo-advisor service, where an algorithm makes stock choices for you based on your inputs.
Cash and securities in a brokerage account are insured by the Securities Investor Protection Corporation (SIPC), so you have protection if your broker goes bust. But that doesn't mean you won't lose money if your investments perform poorly.
You can cash out a brokerage account by withdrawing your cash balance and selling your investments for cash. It could take a few days for your trades to settle, so you may not get all of your money right away. These can have tax implications, so check with a tax professional.

Ask the experts

Dr. Jeff Jones

Dr. Jeff Jones

Jeffrey S. Jones, PhD, CFA®, CFP®, CPA (Inactive), Department Head, Finance and General Business Department

What should investors look for in an online stock brokerage?

Investors should look for a reputable company that has been in existence for several years. Additionally, they should understand that "free" trading is not actually free. The company is finding a way to earn money off of the trades of those customers, and often this involves selling the order flow from those customers to another party. This practice does not necessarily guarantee best execution for the customer.

What does it mean to be an active investor vs. a passive investor?

An active investor is one who believes that with time, effort, and/or skill, they can consistently achieve higher risk-adjusted returns than the overall market. Oftentimes, an active investor believes that pricing inefficiencies exist in financial markets.

A passive investor is one who believes that markets are generally price efficient, and that superior risk-adjusted returns cannot be consistently achieved over multiple time periods. In other words, an investor cannot "beat the market," and so the best strategy is to passively invest in a market index fund with very low expenses.

What are some questions new investors should ask when developing an investment strategy?

New investors should likely either 1) engage a professional financial advisor, or 2) pursue a passive investing strategy. A novice investor likely does not have the skill to beat the market on their own. A new investor should also familiarize themselves with common behavioral biases exhibited by investors (i.e., overconfidence, framing, regret avoidance, etc.).

What tips would you give someone new to online brokerages?

They need to recognize three things:

They likely do not possess superior knowledge or skills.
If something is advertised as "free," there likely is a hidden cost.
They need to recognize the difference between trading (speculation) and investing.

What would you say to people who don't think they know enough about the stock market to start investing?

Everyone needs to start somewhere. A passive index fund can be a great tool for someone who does not know anything about the stock market, as it essentially allows one to invest in the entire market using very small sums of money.

Christopher Schwarz, Ph.D.

Christopher Schwarz, Ph.D.

Associate Professor of Finance Faculty Director, CIWM

What would you say to people who don't think they know enough about the stock market to start investing?

To start investing, you really don't need to know much about the stock market. You can simply open a brokerage account, buy a total stock market or S&P 500 ETF commission free, and be patient. It's the same philosophy as if you were investing through a company sponsored 401k. In fact, I would encourage everyone to start investing as soon as possible. New stock traders would also need to understand the behavioral issues that cause individual investors to have poor performance (overtrading, overconfidence, herding in attention grabbing stocks, and so forth).

What are some questions new investors should ask when developing an investment strategy?

The two most important things to consider before investing are: (a) what is your time horizon, and (b) what is your risk tolerance? Once you feel you understand those issues and have gotten some basic education, always try to paper trade your strategy for a while to see how it does. Learn from free mistakes before you actually try to trade individual stocks. Then when you feel ready, start to trade with small amounts of money at first so you can get used to having real money on the line. This will help you learn how to control your emotions, which will likely cost you the most money when you start. You'll get fear and FOMO at the very worst times. Like budgeting, credit cards, saving, and dieting, being a good investor takes a lot of discipline and patience.

What tips would you give someone new to online brokerages?

All major brokerages are probably close enough to the same, it really doesn't matter which you choose in terms of prices you'll get or simplicity of actually placing a trade. One important thing is to make sure whatever is displayed doesn't impact your decisions. For example, some brokerages show you top mover lists, which can lead to investors herding into the same stocks and likely experiencing negative outcomes.