10 Best Stockbrokers for Beginners in 2021(Charges, Pros, & Cons)

BEST STOCK BROKER FOR BEGGINERS

Most stockbrokers provide the same features like commission fee, and minimum account balance which makes hard to find the best stock broker for beginners. You can compare the stockbrokers based on to find the right one based on your requirements

  • Tradable securities, a few stockbrokers only provide limited securities 
  • Minimum investment in funds like Vanguard funds minimum investment starts at $1000
  • Trading platform 
  • Customer support 

Here is the list of the 10 best stock brokers for beginners in 2021

  • TD Ameritrade – Best overall for beginners 
  • SoFi – Best for fractional share and crypto investment 
  • Interactive Brokers – Best for large tradeable securities 
  • E*Trade – Best for educational resources 
  • Ally Invest – Great for promotional benefit 
  • Merrill Edge – Best for Bank of America customers 
  • Vanguard – Best for below-average expense ratios
  • Fidelity – Great for retirement investment 
  • Charles Schwab – Biggest stockbroker 
  • Robinhood – Free crypto trading 

10 Best Stockbrokers for Beginners in 2021

#1. TD Ameritrade 

TD ameritrade

TD Ameritrade covers all of the bases that you need as a beginner from stockbroker like  

  • no commission on stock, ETF, options trades
  • $0 minimum requirement 
  • Large selection of mutual funds 
  • Quality trading platforms 

All these features make TD Ameritrade ideal for both active traders and beginner investors. 

You require a $0 minimum investment and $0 commissions for stock, options, and exchange-traded fund trades. You get a wide range of services like guidance on portfolio building, investing courses, high-quality research, trading tools, and a large selection of no-transaction-fee mutual funds. 

You can use the virtual trading simulator for testing the platform with virtual trade before setting up a real-money account. You will get $100,000 in practice “money” along with access to a margin account. Non-customers can register for a free 60-day trial for testing virtual trading simulators. 

Charles Schwab acquired TD Ameritrade in October 2020, but the integration may take 18 to 36 months to complete. 

TD Ameritrade falls short

You cannot invest in shares fractionally through TD Ameritrade. Fractional shares allow you to invest by the investment amount, not by the number of shares. With fractional shares, you can include the stocks in your portfolio that may otherwise be expensive to include. 

A beginner who starts with a small investment might find fractional shares a crucial feature in the stockbroker.   

TD Ameritrade Tradable securities 

You can trade in the following securities with TD Ameritrade stockbroker. 

StocksBondsFutures
ETFsMutual fundsForex
OptionsForeign ADRsIPOs for qualified accounts

TD Ameritrade Account & Brokerage Charges

Minimum Account $0
Stock Trading Brokerage$0
Option Trades $0.65 per contract, no base commission
ETF$0
Futures & Options on Futures$2.25 fee per contract
Account fee No annual or inactivity fee
$75 full transfer; $0 partial transfer.

TD Ameritrade Trading platforms 

You get 4 trading platforms 

  • TD Ameritrade web
  • Thinkorswim for desktop
  • thinkorswim Web
  • TD Ameritrade mobile app

Pros of TD Ameritrade

  • 0 commission on stock, ETF, and options trades.
  • No account minimum, good for beginners 
  • High-quality trading platforms
  • Large investment options
  • No account fee for the practical transfer. 

Cons of TD Ameritrade

  • No fractional shares buying option.

#2. SoFi Active Investing 

sofi broker

SoFi Active provides a limited investment scope which makes SoFi a good option for beginner investors who want free trades only in stocks and exchange-traded funds. You cannot invest in index funds, mutual funds, and bonds through SoFi. 

Otherside, You can buy and sell 3 cryptocurrencies Bitcoin, Ethereum, and Litecoin through SoFi active which is an uncommon feature in other stockbrokers. 

You can also invest in fractional shares of blue-chip companies such as Amazon and Netflix which are otherwise difficult to do in the initial phase because of the high price. 

SoFi recently started offering IPO investment to Active Invest members to participate in upcoming IPOs. You can invest in IPOs only in the SoFi app. You need to open an active investment account 

SoFi Active Investing Falls Short

SoFi Active Investing offers a limited set of investment options if we keep crypto and fractional shares aside. You cannot invest in mutual funds, index funds, and bonds or trade-in options, forex, and futures. 

Currently,y SoFi doesn’t offer margin accounts 

SoFi Active Investing is good choice for:

  • Active traders
  • ETF investors
  • Fractional shares
  • Cryptocurrency investor

SoFi Active Tradable Securities 

StocksETFs
CryptocurrencyFractional shares

SoFi Account & Brokerage Charges

Minimum Account $0
Stock Trading Brokerage$0
Option Trades No available 
ETF$0
Crypto Trades1.25%
Futures & Options on FuturesNo available 
Account fee No annual or inactivity fee. $75 for partial and full transfer
Promotional Benefit $5 to $1000 in free stock for users who sign up via a mobile app

SoFi Trading Platforms 

SoFi active provides easy-to-use desktop and app-based trading platforms with decent features for beginners. But you wouldn’t get a few features like stock research, and charting tools essential for active investors. 

Pros of SoFi Active

  • 0 commission on stock, ETF, and options trades.
  • No account minimum
  • Fractional shares possible 
  • 3 Cryptocurrency trading
  • Promotional benefit up to $1000

Cons of SoFi Active

  • Allowed a small selection of tradable securities.
  • Little track record as launched in Feb 2019. 

#3. Interactive Brokers IBKR Lite Plan

Interactive brokers

Interactive Brokers has been a popular broker for advanced traders who want cheaper pricing for higher volume with advanced trading platforms. In 2019 the company launched IBKR Lite for occasional investors.

You get unlimited free trades of stocks and exchange-traded funds that are listed on U.S. exchanges with the IBKR Lite pack.  You can trade in other investment options like mutual funds, options, futures but you need to pay the same cost as IBKR Pro account charges. 

You can also invest in foreign stock which makes a difference for interactive brokers as compared to other stockbrokers. You can invest in 135 exchanges in 33 countries. Investors from 218 countries can invest through interactive brokers. 

Both tiers of service (IBKR Pro & Lite) have a $0 account minimum and offer fractional shares of stock. You need to pay zero account maintenance or inactivity fees for IBKR Lite. IBKR Pro charges an inactivity fee which is not an ideal option for beginners. 

You can invest in fractional shares to purchase a portion of a company’s stock with IBKR. 

Interactive Brokers Tradable Securities 

StocksMutual fundsETFs
BondsFractional sharesForex
OptionsFuturesMetals

Interactive Brokers Account & Brokerage Charges

HeadsIBKR LiteIBKR Pro
Minimum Account $0$0
Stock Trading Brokerage$0$0.005 per share; minimum $1 and maximum 1% of trade value
Option Trades 65 cents per contract with a $1 minimum65 cents per contract with a $1 minimum
ETFUnlimited commission-free trades96 commission-free ETFs
Account fee No annual or inactivity fee. Accounts with less than $100,000 pay $10/month minus any trade commissions

with less than $2,000 pay $20/month minus commissions
Promotional Benefit NoNo

Interactive Brokers Trading Platform 

You get access to trading platforms 

  • Trader Workstation platform
  • Advanced features mimic the desktop app

Interactive Brokers Pros

  • Large investment selection.
  • Strong research and trading tools.
  • More than 4,300 no-transaction-fee mutual funds.

Interactive Brokers Cons

  • Website navigation is difficult 

Also read – Best personal finance books for beginners

#4. E*TRADE 

etrade_product

E*TRADE is one of the most popular online stockbrokers among both active traders and beginner investors.  

$0 commissions for all stock, ETF, and options trades and strong trading platforms suit active trader’s requirements.  Being a beginner investor you get a large library of educational resources.

You get educational resources, professional-level trading platforms, and tools to assemble a risk-appropriate, and balanced portfolio.

In October 2020, Morgan Stanley completed a $13 billion deal to purchase E*TRADE. The stockbroker will continue to operate under the E*TRADE name with no changes to the prices, tools, and offerings.

E*trade Tradeable Securities 

StocksMutual fundsETFs
BondsOptionsFutures

E*Trade Account & Brokerage Charges

Minimum Account $0
Stock Trading Brokerage$0
Option Trades $0.65 per contract
Futures Contract$1.50
ETFAll ETFs commission-free
Bonds$1.0
Account fee No annual or inactivity fee
$75 full transfer out fee; $25 partial
Promotional Benefit Up to $3000

Promotional Benefit

You can get a promotion benefit of up to $3000 on account opening depending upon your deposit amount. Here are the details –

Etrade promotional benefit

E*Trade Trading Platforms 

Free trading platforms available for all customers 

Web-based Platform Mobile App
E-Trade WebE*TRADE mobile
Power E-TradePower E-Trade

E*Trade Pros

  • Advance & easy-to-use tools.
  • Good customer support.
  • Large educational resources for beginners 
  • Advanced mobile app
  • $0 Commission stock, options, and ETF trades
  • Promotional benefit up to $3000

E*Trade Cons

  • The website can be difficult to navigate
  • Less tradable securities as compared to others in the list 

#5. Ally Invest 

ally invest

Ally Invest is the online brokerage firm of Ally Financial which also operates Ally Bank. Ally Invest is suitable to both the beginning investor and the experienced trader with $0 trading costs on securities, a $0 account minimum, 

Ally provides a huge selection of no-transaction-fee mutual funds and a $0.50 low-cost options contract fee makes it the best choice for options traders.

You also get benefits like forex trading, an automated portfolio management option, and free trading tools for investors. Ally invest provides a browser-based trading platform with free screening tools, customizable charting, research, and real-time data.

Ally Invest Falls Short 

Ally Invest offers a large number of tradable securities but missing the fractional share securities which are important for beginner investors. You would also not trade in futures contracts with Ally Invest. 

Ally Invest Tradeable Securities 

StocksMutual fundsOptionsPenny stocks
BondsETFsForex

Ally Invest Account & Brokerage Charges

Minimum Account $0
Stock Trading Brokerage$0
Option Trades $0.50 per contract
Futures ContractNA
ETFAll ETFs commission-free
Account fee No annual or inactivity fee
$50 full outgoing transfer fee
Promotional Benefit $50 to $3000 

Ally Invest Promotional Benefit Details

You can get a promotional benefit in between $50 to $3000 depending on your first-time deposit. 

Ally Invest will credit transfer fees up to $150 when you complete a first-time account transfer for $2,500 or more.

Being new customers, on deposits over $10,000, you will receive cash bonuses ranging from $50 to $3,000.

Ally Invest Pros

  • Commission-free trades on eligible U.S. stocks, options, and ETFs.
  • No account minimum.
  • Strong web-based platform.
  • Robust research and tools.

Ally Invest Cons

  • No fraction shares 
  • No futures contract 

#6. Merrill Edge 

merrill-edge

Bank of American acquired Merrill Edge in 2008 and made the best efforts to provide a seamless experience for clients who use both services. 

Both the products are integrated in a seamless way than you can check Bank of America accounts and Merrill Edge accounts with a single login and Merrill Edge investment account balances on Bank of America ATMs. You can transfer the money between the account instantly. 

If we talk about Merrill Edge then it stands out for its robust research and unlimited free trades on stocks and exchange-traded funds. 

Merrill Edge launched 2 tools for better consumer experience:  “Dynamic Insights” and “Idea Builder” tools. 

  • Dynamic Insight a customizable dashboard for providing an analysis of your portfolio, research and news and based on your portfolio holdings. 
  • Idea Builder is to search for new investment opportunities by ideas rather than individual companies, performance, sector or other traditional criteria. Like Warren Buffet Stocks, Climate change investment opportunities. Idea Builder is helpful for ESG investors (environmental, social, governance) looking for an easy way to compare socially responsible investment opportunities.

Merrill Edge working on providing in-person support by making a presence in Bank of America branches across the country. Now you can get customer support from more than 4300 locations. 

Merrill Edge is ideal for existing Bank of America customers. Bank of America customer may qualify for Merrill’s Preferred Rewards program, which provides offers like 

  • a variety of discounts and promotions, 
  • including higher interest rates on savings accounts, 
  • reduced rates on auto loans and 
  • discounts on mortgage origination fees.

You must have a Bank of America checking account with a three-month minimum average balance of $20,000 deposit accounts, qualified Merrill Edge, and Merrill Lynch investment accounts.

Merrill Edge Tradeable Securities 

StocksMutual FundsOptions 
BondsETFs

Merril Edge Account & Brokerage Charges

Minimum Account $0
Stock Trading Brokerage$0
Option Trades $0.65 per contract
Futures ContractNA
ETFAll ETFs commission-free
Account fee No annual or inactivity fee
$49.95 full outgoing account transfer fee for retirement accounts
Promotional Benefit $0 

Merril Edge trading platforms:

  • Full site HTML experience.
  • Merrill Edge Mobile App (iOS and Android).
  • Merrill Edge MarketPro
  • Advanced features mimic a desktop trading platform

Merrill Edge Pros

  • Robust third-party advanced research
  • Seamless Integration with Bank of America.

Merrill Edge Cons

  • Active traders may miss futures contracts and forex trading 

#7. Vanguard 

Vanguard

Vanguard is known for below the national average expense ratios on its index funds and exchange-traded funds. Low-cost investing makes Vanguard ideal for long-term investors and retirement investors with higher account balances. 

Vanguard offers a minimum $0 account balance but the funds minimum investment starts at $1000. 

Vanguard offers a $0 stock trading commission even though active traders are likely to disappoint with Vanguard due to the lack of a strong trading platform. 

But active traders will find the broker falls short despite its $0 stock trading commission, due to the lack of a strong trading platform. Vanguard’s trading platform is suitable for buy-and-hold but not much more as the company focus on investors rather than active traders. 

If you are looking for a stockbroker for long-term investment or retirement planning then it’s hard to beat the service and fund selection found with Vanguard. 

Vanguard Tradable Securities 

StocksETFsOptions 
BondsMutual FundsCDs

Vanguard Account & Brokerage Charges

Minimum Account $0
but, fund minimums start at $1,000 
Stock Trading Brokerage$0
Option Trades $1 per contractget 25 free trades with a ,,$1M+ account balance get 100 free trades per year with $5M+ 
Futures ContractNA
ETFAll ETFs commission-free
Account fee No closing, inactivity, or transfer fees.
$20 annual account service fee for all brokerage accounts and IRAs
Promotional Benefit $0 

Vanguard Pros

  • Large mutual fund selection.
  • Commission-free stock, options, and ETF trades.
  • Leader in low-cost funds.
  • Helpful customer support

Vanguard Cons 

  • Basic trading platform
  • Minimum funds start at $1000
  • $20 annual service fee 

#8. Fidelity 

Fidelity

Fidelity is one of the leading stockbrokers with more than $3 trillion worth of customer assets globally. 

Fidelity is known for low-fee investment funds along with $0 trading commissions, more than 3,500 no-transaction-fee mutual funds, and decent trading platforms. You can trade all Fidelity’s mutual funds for free which includes zero-fee index funds. 

Fidelity is more famous among investors for retirement investments due to low-fee investments. 

You can expect better customer service as compared to many other stockbrokers in the market.  You can meet with representatives in physical branch locations and attend investor seminars for free. You would learn about topics, such as social security and technical analysis. 

One drawback is Fidelity charge a higher broker-assisted trade fee at $32.95.

Fidelity Tradable Securities

StocksBondsFractional Shares 
Mutual fundsETFsOptions 

Fidelity Account & Brokerage Charges

Minimum Account $0
Stock Trading Brokerage$0
Option Trades $0.65 per contract
Futures ContractNA
ETF$0
Account fee No annual or account for partial and full transfer
Promotional Benefit $0 

Fidelity Trading Platform

  • Fidelity.com platform 
  • Active Trader Pro web platform 
  • Fidelity mobile app

Pros

  • $0 commission on stock, ETF, and options trades.
  • Large selection of research providers.
  • Better customer support.
  • Fee-free index funds.

Cons 

  • Relatively high broker-assisted trade fee.
  • Lack of futures and forex trading 

Also check out – ETrade vs Fidelity

#9. Charles Schwab 

Charles Schwab

Charles Schwab is one of the biggest stockbrokers in terms of customer base. Charles provides full-service broker services which include Robo advisory. 

It wouldn’t be wrong if I say Charles Schwab leads the stockbroker market. In 2019, Charles Schwab was the first online broker to offer a $0 commission fee on stock, ETFs, and options. Today almost all stockbrokers follow the same fee structure.  

Last year-end, Charles Schwab acquired the emerging stockbroker TD Ameritrade. You can now expect more streamlined service and better products. 

Charles Schwab is a great option for beginners who prefer an all-around broker in terms of fees, service, product, educational products, and Robo-advisory. Intelligent Portfolio is a Robo-advisory that provides complete portfolio management along with automated investment. 

Schwab Stock Slices also offers fractional shares, so you can buy a small slice of stock rather than paying the full share price. For example, you can buy a 10% fraction of Google stock with $230 that costs $2300 a share. 

Charles Schwab Tradeable Securities

StocksMutual FundsFractional SharesOptions
BondsETFsCDsFutures

Charles Schwab Account & Brokerage Charges

Minimum Account $0
Stock Trading Brokerage$0
Option Trades $0.65 per contract
ETFAll ETFs commission-free
Account fee No annual or inactivity fee
$50 for full transfer; $25 for partial transfer 
Promotional Benefit $0 

Charles Schwab Trading Platfroms 

Trading Platform Mobile App
StreetSmart Edge (desktop platform)Schwab Mobile
Schwab.comStreetSmart Mobile
StreetSmart Central

Charles Schwab Pros

  • Commission-free stock, options, and ETF trades
  • Fast and better mobile app.
  • Better customer support 
  • Large fund selection.

Charles Schwab Cons

  • Low default cash sweep rate with 0.01%

Also read – Charles Schwab vs Vanguard

Robinhood 

robinhood

Robinhood is a California-based brokerage house that has grown to 11 million+ traders. 

Robinhood is known for commission-free trading across products. You can trade stocks, ETFs, and options with zero commission fees. You wouldn’t even need to pay a contract fee on options which other brokers charge $0.65 per contract. 

One unique feature of Robinhood is providing crypto products for crypto investment and trading. The present list of tradable crypto include:

  • Bitcoin
  • Bitcoin Cash
  • Bitcoin SV
  • Dogecoin
  • Ethereum
  • Ethereum Classic
  • Litecoin 

You can trade all the crypto at zero brokerage charges. SoFi is the only other stockbroker in this list to provide 3 cryptos for trading but charge a 1.25% fee. 

Robinhood collared the crypto trades up to 1% for buys, and 5% for sells. This means your order won’t be executed if the price of the cryptocurrency moves more than 5% for selling orders or more than 1% for a buy order.

One drawback is, you can trade for 5 days only if you have a minimum account balance of $25,000. In case, value less than $25000 Robinhood allows four-day trades within five days.

You can’t trade in mutual funds, bonds, and CDs as well. 

Robinhood Tradeable Securities

StocksOptions
ETFsADRs
Cryptocurrency 

Robinhood Account & Brokerage Charges

Minimum Account $0
Stock Trading Brokerage$0
Option Trades $0
Futures ContractNA
ETF$0
Account fee No annual or inactivity fee
$75 for partial and full transfer
Promotional Benefit $5 to $1000 in free stock for signing up via the mobile app

Pro of Robinhood 

  • Commission-free trading
  • Best for mobile trading 
  • Availability of Crypto products 
  • No contract fee on option contracts 

Robinhood Cons

  • Limited investment options
  • 4 Days trades with account value less than $25000

Final Words 

If you are looking for an all-around stockbroker then you can go for TD Ameritrade which provides all the features required for beginners except the fractional shares. 

If you want to invest in fractional shares, you can go with SoFi Active investment

Existing Bank of America customer can get the maximum benefit out of Merrill Edge as the company provides seamless integration between both services 

For long-term investment or retirement planning, Vanguard is a good option due to the lower expense ratio on funds. 

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