Best Online Trading Brokerage Firms for Beginners

Online Investing For Beginners

When you are new to investing, the stock market can be confusing and a bit hard to grasp: all this technical lingo, complicated trading platforms, the crazy swings up or down, and a lot of generally unpredictable behavior. Many beginners also feel some level of apprehension: who wants to lose their hard-earned money? But investing is just a skill that can be learned, and the more time and effort you put into your investing education and real-life practicing, the better you become.

It’s also important from the start to choose a brokerage firm that is friendly to entry level investors. Some brokerage houses target wealthy clients who want to let the firm manage their money. Other companies are after customers, such as day-traders and professional money managers, who are already knowledgeable and comfortable with advanced trading tools and account management.

However, there are also online brokerages that are great for beginners: that welcome new investors, and offer them comprehensive educational materials, online webinars and classes, and virtual simulation tools to practice trading (also known as "paper" trading). Some firms even have helpful online communities, where customers can ask questions, learn from more advanced members, and get investing ideas from experienced investors. A few of these companies don’t even charge additional commission if a client wants to call a broker and place a trade with the broker's help.

Best Online Brokers

Below we list three best discount brokerage firms for new investors who are looking for either regular brokerage account or for one of the various IRA accounts:

Broker Fees Stocks/ETFs
Mutual Funds
IRA Setup
and Annual Fees
TradeKing $4.95 $9.95 $4.95 + $0.65 per contract $50* $0
Scottrade $7 $17 $7 + $0.70 per contract $0 $0
TD Ameritrade $6.95 $49.95 $6.95 + $0.75 per contract $0 $0

* TradeKing imposes $50 inactivity fee if combined account value of the household account(s) is less than $2,500 AND no commission-charged trades have been executed in the account(s) during the last 12 months.

Broker Review Investment Products Trading Tools Customer Service Research Overall Rating
TD Ameritrade

Top Brokers Overview

-  TradeKing (TradeKing Review) charges just $4.95 per stock or ETF trade (even for broker assisted trades!), and $9.95 for mutual funds transactions. The firm created the highest rated and very helpful online investor community. TradeKing offers plenty of educational materials on its website, and has an award winning customer service. Investors can open an account with this sixth largest brokerage house in the U.S. and give it a try with $0 down and no obligation.

New customer promotion link: Get $1,000 in free trade commissions at TradeKing.

-  TD Ameritrade (TD Ameritrade Review) has a flat $6.95 per trade stock/ETF commission, and offers 2,500 no-commission mutual funds and $0 account opening minimum. The firm is one of the best-known brokerage companies in the country. Broker-assisted trades are very high, though -- $49.99 per trade. There are tons of educational resources on TD Ameritrade's website and an easy access to active trader community. The firm is offering the best online trading practice account for beginners and advanced investors to try different investment strategies without any risk. However, commissions on all investment products at TD Ameritrade are higher than the average in the industry.

New customer promotion link: Trade free for 60 days + get up to $600.

-  Scottrade (Scottrade Review) offers a flat $7 commission per stock or ETF trade, a $17 per transaction rate for mutual funds as well as 3,000 commission-free mutual funds. Minimum $2,500 is required to open a regular brokerage account. Scottrade is one of the largest online brokers in United States, with great customer service, largest network of local offices for in-person visits, and good banking services (savings, CDs, money market and free checking accounts). However, broker-assisted trades are not cheap at $32 per trade.

New customer promotion link: Open account and start saving with Scottrade today.

Our Recommendations

If you want the best trading platform and investing environment, or to practice online trading without risking real money, then go with TD Ameritrade. Read full TD Ameritrade Review.

TradeKing is the best entry level broker if you want bargain pricing or to participate in very helpful online investor community. You can read full TradeKing Review.

Open an account with Scottrade if one or more of these apply:

  • you are only comfortable investing with one of the oldest, most established and largest online brokerage houses;
  • you want to invest mostly in mutual funds;
  • you are looking for an IRA account (Traditional or ROTH IRAs, or retirement accounts for self-employed - there are no IRA fees at Scottrade).

See full Scottrade Review.

About the Companies

New investors who want to find a safe and reliable brokerage firm should check out Scottrade, TradeKing, and TD Ameritrade. With billions of dollars in client assets, these large brokers are able to provide good services and in 2017 they are rated the "Best Online Trading Brokers For Beginners".

Education and Research

Investor education is especially important for beginners. Scottrade has vast resources that novice traders can study to learn more about securities trading. TradeKing offers articles and videos on many different financial topics. Self-guided financial courses are available, too.

TD Ameritrade also has a wide selection of informational material. The broker provides independent third-party reports on stocks at no charge. TD Ameritrade also owns Investools, an educational service. This program offers securities courses at the beginner, advanced, and expert levels.

Trading Tools

TD Ameritrade offers user-friendly trading tools that beginners will appreciate. The most basic is the web browser. This is a good place to start. At the bottom of the browser is SnapTicket, an easy-to-use trading ticket. Trade Architect is also available. This is a web-based platform. Thinkorswim is a more sophisticated desktop program, which includes paperMoney, a practice platform. PaperMoney would be useful for new investors who need to practice trading without any risk.

TradeKing also has a well-designed website. The broker offers advanced trading system to all its customers.

Scottrade’s website is the most basic of the three. The firm does provide a more advanced platform, Scottrader Streaming Quotes, a Java-based platform for trading stocks, options, and ETF's. ScottradeELITE, the most sophisticated platform, is available only to frequent traders.

Mobile Apps

All three brokers provide mobile apps to make investing more convenient. TradeKing's app works for Android, Windows phone, iPhone, and iPad. Besides trading, the app has many useful features, such as an ability set up charts, option chains and alerts.

Investors at TD Ameritrade can use iPhone, iPad, Apple Watch, Android, and Windows 10. Live streaming of CNBC is available with no active trader requirement, which the TradeKing app lacks. The broker has a thinkorswim app, which includes paperMoney, the practice platform.

Scottrade's app is less advanced than TradeKing's and TD Ameritrade's. Nevertheless, it has some helpful features, such as alerts and market news.

Trading Costs

Stock and ETF trades at TD Ameritrade carry a $6.95 charge. Scottrade is the same at $6.95. TradeKing is the cheapest stock broker for beginners charging just $4.95 per trade. Trading options at TD Ameritrade costs an extra $0.75 per contract. This commission is in addition to the $6.95 base charge. At Scottrade, investors pay an extra $0.70. TradeKing is, again, the best priced with $0.65 per contract fee.

At all three brokers, traders can use a live broker to execute a trade over the phone, although the commission is higher than trading on-line. TD Ameritrade charges a rather steep $44.99 for this service, while Scottrade is at $32. TradeKing doesn't have a surcharge - commission is still $4.95.

There are no maintenance fees or inactivity fees for brokerage accounts at TD Ameritrade and Scottrade. To open an account at Scottrade, investors must deposit at least $2,500. TD Ameritrade and TradeKing have no minimum.

TradeKing or TD Ameritrade would be a good choice for small investors who want to get their feet wet in the investing world with a small opening deposit.

Mutual Funds and Exchange-traded Funds

TD Ameritrade offers more than 11,000 mutual funds for its clients to trade. Nearly 2,000 of these have no load and no transaction fee. Funds with a transaction-fee are $49.99. This fee applies to both purchases and sales.

TradeKing customers can buy and sell over 11,000 mutual funds. There are no no load and no transaction fee funds. The charge for transaction-fee funds is only $10 on both the buy and sell sides.

Investors at Scottrade have access to more than 14,000 mutual funds. Nearly 3,000 of these have no transaction fee and no load. Funds with a transaction fee cost $17 to trade.

Only TD Ameritrade offers a selection of 101 ETF's that carry no commissions. Regrettably, Scottrade and TradeKing don't offer any ETF's without commissions. Trading ETF's commission-free at TD Ameritrade would be a good opportunity for new investors to learn the ropes of the investing world.

Customer Service

All three brokers have good customer support options. TD Ameritrade both has phone support 24 hours a day, 7 days a week. At Scottrade, phone service is available only from 5 am to midnight (CST), during the week, and 8 am to 6 pm on the weekend.

Branch locations are available throughout the U.S. from two brokers: TD Ameritrade maintains more than 100 locations, and Scottrade has the most, with more than 500 branches. In-person assistance might come in handy for new investors who need extra assistance.

Banking Features

A checking account is available at all brokers, connecting cash management features to a brokerage account. TD Ameritrade has the best account with FDIC insurance at $500,000, more than twice the usual limit. The broker also reimburses ATM fees for all customers.


All companies mentioned in this article are members of FINRA and have to comply to strict government rules. The client accounts are safe and insured by SIPC for up to $500,000 per customer, including up to $250,000 in cash.


TD Ameritrade is the best for education and paper trading, TradeKing is the best when it comes to pricing. Scottrade has the largest network of local branches and the best customer satisfaction out of the three brokers.

New Customer Promotions

Scottrade: Open account and start saving with Scottrade today.

TradeKing: Get $1,000 in free trade commissions at TradeKing.

TD Ameritrade: Trade free for 60 days + get up to $600.

Updated on 1/13/2017.

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