Are you looking for the best brokerage accounts for beginners in the U.S, then this article is for you. Read down.
An online broker is necessary if you want to trade stocks. We carefully examined each brokerage company before including them on our list of the top online brokers for trading stocks. See our selections by reading on.
Due to their reasonable fees, robust trading platforms and tools, and superior customer support, these online brokers stood out as the best for trading stocks in the U.S in our analysis.
Key Takeaways
- You will learn about the best brokerage accounts for beginners in U.S.
- What is a stockbroker?
- How to buy stock from a broker as a beginner in U.S.
What is a Stockbroker?
A stock broker is a financial professional that buys and sells securities on behalf of clients (stocks, bonds, mutual funds, and so on). A stockbroker acts as a go-between or middleman for the investor’s transactions.
How to buy stocks as a beginner in U.S
Here are five steps to help you understand how to purchase stocks as a beginner in us:
#1. Open a brokerage account
To begin, you will need a brokerage account to purchase stock. When choosing an online stock brokerage, keep the following two factors in mind:
What the brokerage offers:
Is the brokerage firm able to provide you with all of the products and services you require? Some brokerages provide excellent educational resources for new investors.
Others provide access to stock research and also analytical tools. Some online brokerages have physical locations where you can get help.
Other characteristics, such as the ability to trade international equities or buy fractional shares, may be significant to you. These are not available at every brokerage.
The user-friendliness of the platform:
Is the brokerage platform simple to use? If you wish to trade from your smartphone, the brokerage’s mobile interface must be well-designed.
Many of the larger brokerages allow you to use play money to test out their trading platforms before investing, so try a few to see which one you prefer.
#2. Decide which stocks you want to buy
The next stage is to decide which stocks you want to buy.
Here are a few pointers:
- Follow a “buy and hold” strategy:
Only purchase stocks that you want to keep for a long time. Don’t buy a stock simply because you believe it will perform well in the coming weeks or months.
- Diversify your holdings:
Don’t invest all of your funds in a single or a few stocks. Buy a few shares of several different types of stocks to diversify your portfolio, even if your initial investment is simply a little sum.
Owning the stocks of multiple companies doesn’t cost any more now that commission-free trading is available.
#3. Decide how many shares to buy
To figure out how many shares to buy, decide how much money you want to put into each stock that interests you, then divide that amount by the stock’s current share price.
You may access stock prices on your brokerage’s site by searching for the ticker symbol or the company name.
If your brokerage deals in fractional shares, you can buy a stock for any dollar amount, regardless of its share price.
Because many brokerages do not buy or sell fractional shares, you must round down to the next whole number of shares to determine how many you can purchase.
#4. Choose an order type
There are various order types for stock purchases. The type of stock order you submit indicates the parameters under which you want your broker to transact on your behalf.
For buy-and-hold investors, the optimal order type is a “market order,” which advises your broker to buy the stock immediately and at the best available price.
You might prefer to issue a “limit order,” which tells your broker the highest price you’re willing to pay for a stock.
For example, if a company is now trading at $20.50 per share and you want to buy it only if the price falls below $20, you would use a limit order. Your broker will only conduct transactions on your behalf if the stock’s price dips below $20.
#5. Place a stock order with your brokerage
To place a stock order, navigate to the appropriate part of your brokerage’s platform and provide the necessary information. Your brokerage will normally ask for the company or stock ticker name, whether you want to purchase or sell shares, and the dollar amount or number of shares you desire.
After you press the “place order” button, your stock transaction should be completed in a matter of seconds (if the order type is a market order). Your portfolio should be updated promptly to reflect your ownership of the freshly purchased shares.
#6. Build your portfolio
The last step in this procedure is to put together your investment portfolio.
You can keep adding funds to your brokerage account and investing in equities you want to own for years to come now that you have a brokerage account and understand the basics of how to purchase and sell stocks.
10 Best Brokerage Accounts For Beginners In U.S
Investing in stocks, bonds and other securities can be a great way to grow your wealth over time. But if you’re new to investing, where should you start? In this article, we’ll take a look at the 10 best brokerage accounts for beginners in the U.S.
#1. TD Ameritrade
TD Ameritrade is one of the major online brokers, and it has made a concerted effort to attract new customers (thus its extensive social media presence).
TD Ameritrade has included several elements that will assist beginning investors while also providing a wealth of investing alternatives for seasoned investors.
- Account Minimum: $0
- Fees: Free stock, ETF, and per-leg options trading commissions. $0.65 per options contract.
Pros:
- TD Ameritrade provides a range of teaching resources for new investors, including learning paths, and the mobile app is beautifully designed.
- New investors can test the platform without incurring cancellation fees.
- TD Ameritrade creates hours of educational programming that is available on the TD Ameritrade Network—an excellent resource for beginning investors.
Cons:
- Investors receive a poor interest rate on cash held in their brokerage accounts.
- TD Ameritrade is not a fully comprehensive platform and lacks some of the capabilities that experienced investors may require.
#2. Ally Invest
Ally Invest is a good alternative for beginners and others. The platform does not impose trading commissions on certain US securities trades, making it a suitable option for people who are still determining the correct portfolio balance.
- Fees: $0 per trade (on eligible US securities)
- Account minimum: $0
Pros:
- There is no account minimum with Ally Invest, making it a perfect alternative for beginners.
- There are no commission costs on qualifying US stocks, ETFs, and options.
- Ally Invest is well-known for its robust website and easy-to-use features.
- This is another program that provides a variety of research materials for beginners.
Cons:
- Because the platform is entirely online, it is unable to get in-person counsel or support.
- Users looking to invest in mutual funds may be dismayed to realize that Ally Invest charges transaction fees.
#3. Robinhood
Robinhood is a fantastic alternative for new investors because it has an easy-to-use interface that isn’t too intimidating for beginners; however, experienced investors may find it unnecessarily basic.
- Fees: $0 per trade
- Account minimum: $0
Pros:
- Robinhood provides a mobile app and a web platform with a good range of basic features such as watch lists, stock charts, and price notifications.
- You’ll get a high return on your uninvested funds in your brokerage account.
- A recent upgrade included sophisticated charts, which help consumers to better visualize data when making investment decisions.
Cons:
- At this moment, the mobile app and web platform may not offer extensive capabilities, and there are few research tools accessible for locating successful equities.
#4. Fidelity
Fidelity is a well-rounded broker that is suitable for both novice and experienced investors.
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
Pros:
- Fidelity provides you with access to a wide range of research providers—companies that examine stock and market performance. If you intend to invest in stocks, these materials could be extremely beneficial.
- Fidelity has a number of index funds with low expense ratios. This is ideal for investors who wish to save for retirement or construct a varied investment portfolio.
- The Fidelity platform is simple to use and customize.
- Fidelity offers a variety of instructional resources as well as seminars and webinars on a regular basis.
Cons:
- Fidelity has a strong trading platform, but the website can be quite difficult to navigate.
- Fees for broker-assisted trades (trades that you request over the phone when you don’t have internet access) can be very high.
#5. Merrill Edge
If you have a Bank of America account, Merrill Edge has several useful resources for novice investors.
- Fees: $0 per trade
- Account minimum: $0
Pros:
- Merrill Edge offers outstanding customer support. You can meet with a financial advisor in person at practically any Bank of America location in the US; they will assist you more with financial planning than with investing advice. A 24/7 service number and online chat are also available.
- Merrill Edge offers reliable portfolio analysis tools that can assist you in building a portfolio that is both stronger and more diverse.
- With context-sensitive support pop-ups, the Merrill Edge trading platform stands apart from the competition. For new investors, such a feature is crucial.
Cons:
- You are unable to trade futures, futures options, or cryptocurrencies.
- The interest rates on borrowed funds for margin accounts are exorbitant.
#6. Interactive Brokers
Although Interactive Brokers was originally intended for active traders, the online stockbroker recently created the IBKR Lite platform, which is aimed at new investors.
- Account Minimum: $0
- Fees: Maximum $0.005 per share for Pro platform or 1% of trade value, $0 for IBKR Lite
Pros:
- IBKR Lite has no inactivity or account maintenance fees, and all Interactive Brokers platforms have excellent research tools.
- There is a massive selection of investment options, including over 4,000 mutual funds with no expense ratios.
- IBKR Lite has a very low commission fee.
- There are low-interest rates on money borrowed in margin accounts, and Interactive Brokers provides Robo-advising.
Cons:
- The Interactive Brokers website isn’t the most user-friendly, but the platforms are fine.
- There are inactivity fees on the pro platform.
- For new investors, there aren’t as many options—no “hand-holding” features to help you understand the investment tools at your disposal.
#7. Firstrade
Firstrade is another stock broker that’s good for those long-term investors that are planning for retirement. It has a great set of features for both beginners and advanced investors.
- $0 Commission Trades
- $0 Options contract fees
- No minimums, No inactivity fees
Pros:
- Firstrade has three different trading platforms (including a mobile app) that are simple to use and configurable, and there are no commission fees for mutual funds, making it a superb online broker for long-term investing.
- You can use excellent research resources.
- By recommending people to Firstrade, you can receive free shares. Call your acquaintances!
Cons:
- Investors who are focused on their retirement have access to a lot of features, whereas active traders have few options.
#8. Charles Schwab
Charles Schwab is another well-rounded online broker that caters to both novice and experienced investors.
- Trading Commissions: $0 for stocks, ETFs, options
- Account Minimum: $0
Pros:
- Charles Schwab has a large selection of mutual funds with no-cost ratios, making it ideal for investors planning for retirement or looking for a broad portfolio. Charles Schwab provides a wide range of research providers.
- Google Assistant integration (so you can ask your Google smart speaker for information about securities you’re interested in fun for the tech-savvy investor).
- The trading platform is highly flexible and attractively designed.
Cons:
- Any funds in your brokerage account will earn a hefty interest rate. You may always direct your funds to the Schwab Value Advantage Money Fund, which yields a far higher rate of return. It’s just that it’s not the default option.
#9. E*Trade
E*Trade boasts one of the most user-friendly trading systems, making it an excellent online broker for new investors.
- Fees: $0 per trade
- Account minimum: $0
Pros
- E*Trade employs a number of platforms, including three computer-based platforms and two mobile-based platforms.
- Each platform is tailored to a specific type of investor, yet they are all simple to use.
- Each E*Trade app includes a full set of investment features.
- The E*Trade apps enable investors to engage in paper trading (simulated stock trading), which is an excellent learning tool for new investors. It’s also an excellent approach to putting financial strategies to the test.
- If you have a larger budget, you can use E*Trade’s “Prebuilt Portfolios” option. This will automatically invest your money in a variety of mutual funds and ETFs, allowing you to swiftly develop a varied portfolio of equities.
Cons
- There is no direct access to overseas markets through E*Trade.
- You can’t aggregate your other bank accounts (which is useful when trying to get a complete view of your net worth). Most first-time investors, on the other hand, are unlikely to be concerned with net worth.
#10. Webull
Webull is aimed toward moderate to skilled investors who like to manage their portfolios entirely online. Webull supports a variety of asset classes, including cryptocurrency.
- Fees: $0 per trade
- Account minimum: $0
Pros
- Webull has an easy-to-use desktop and mobile interface
- powerful trading capabilities that you won’t find on other applications on this list
- Webull is a low-cost trading platform with a $0 account minimum.
Cons
- Webull is not known for its instructional resources and is often advised for investors with at least some expertise.
- Webull does not provide mutual funds as investment choices.
Read also:
Conclusion
A stockbroker is a financial expert who purchases and sells shares on your behalf. Online stockbrokers manage your transactions at a lower cost, making them ideal for new investors with little funds.
The best brokerage accounts for beginners in the U.S have educational features, cheap account fees, and user-friendly mobile platforms.
FAQS
What is the cheapest broker?
Robinhood and Webull are the lowest commission brokerage accounts for stocks, ETFs, options, and cryptocurrency.
How many stocks to buy as a beginner?
Most experts advise beginning investors that if they are going to invest in individual stocks, they should attempt to have at least 10 to 15 different equities in their portfolio to appropriately diversify their holdings.
What stock should a beginner buy in 2023?
Here are the best stocks for beginners to buy in 2023:
- Amazon (NASDAQ: AMZN)
- Alphabet (NASDAQ: GOOG)
- Apple (NASDAQ: AAPL)
- Costco (NASDAQ: COST)
- Disney (NYSE: DIS)
- Meta (NASDAQ: META)
- Mastercard (NYSE: MA)
- Microsoft (NASDAQ: MSFT
You can learn more from the video below:
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