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Best Stock Brokers for Beginners (Updated for 2016)

Best Stock Brokers for Beginners (Updated for 2016)

Here are four of the best stock brokers for beginners. These are investment firms that operate as part of major banks that you, as a new, intermediate, or advanced investor, can open up an account with and start trading stocks.

Note that there are very few online brokers that specifically cater for the needs of novice investors. Most online and offline brokers will assume you have a fair amount of knowledge. The brokers in this article have functions and education centers that help people who have no investing knowledge whatsoever. Many of them offer face-to-face consultations as well.

On the flip side, if you are a true novice, it may be worth visiting your bank first to see what they offer. In many cases, they have far higher fees than online brokers, and they have far fewer resources for teaching people how to invest, but occasionally a bank has an adviser (that you meet face to face) who goes all out to help you with your first investments. Nevertheless, if you find your bank’s customer service a little lacking, here are four ideal brokers for beginners.

Investing Terms You Should Know First

Many online brokers will assume you are very knowledge about investing, which often means that even if you follow their blog or online webinars, you are still clueless as to what they are talking about. To be sure, this article doesn’t make the same mistake; here is a glossary of the most esoteric terms used in this article.


You may buy a small piece of a limited company. They issue shares, and each share counts for a tiny percentage of the company. Even if you only own one share, you are now a part owner of the company, even if your share is only 0.0001% of the company.


This is a general term for describing your ownership of a company with shares. For example, you may say, “I bought shares in McDonalds,” but if you also own shares in BurgerKing and Wendy’s, you may say, “I bought stock in the fast food industry.”


When you sell your shares, you are selling your part of a business. Somebody else may wish to buy your shares in the business. That is why the word trading is used.

Trading fee

A stockbroker has to do the buying and selling when you give him/her/them instructions. They tend to charge a fee for this service.

Article Average

The “Article Average” is not an industry term; it is simply the average cost as listed in this article. The average is between all the brokers listed here, it is not the industry average.

Options Trades

An option is a binding contract with strict rules. If you buy an option, you have the right to sell at a certain price on/before a certain date. It can be confusing, but Investopedia explain it here with a house-buying example.

Broker-assisted Trades

If you call them and speak to a person, then that is a broker-assisted trade. It shouldn’t be confused with a Voice Response or IVR trade. Will the broker also give you advice over the phone when you call? It depends on the policy of the brokerage.

1. Capital One Investing

If you are just a beginner, you should probably try stock trading because it is more fun and it is relatively easier to understand. Capital One has a very interesting stock trading division that you may access online. The online trading platform is very easy to use. The services are not extensive, but beginners only need basic functions to begin with.


[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][+] The website doesn’t assume you know anything about stock trading

[+] Simplicity is the overriding theme of their online trading platform

[+] There is an education center that helps new starters

[+] The education center is rather comprehensive

[+] Great for people that are interested in the basics of stock trading

[+] They explain taxes very well

[+] The website is intuitive and easy to use

[+] Navigating the website is a breeze

[+] The basic reports keep things simple

[+] There is an options calculator

[+] Set up automatic investing rules

[+] There is an app for the iOS, Android, Blackberry and Kindle

[+] You may customize your screen on the apps

[+] There is no minimum balance requirement

[+] The broker-assisted trades are priced lower than the industry standard


[-] Learning from the education centre requires a lot of reading

[-] Once beginners become advanced, they will have to look elsewhere

[-] You cannot customize your screen on the desktop version

[-] The reports are basic, which will not suit intermediate traders

[-] It is not a feature-rich online trading platform


Capital One are not chasing customers because they are a very popular and successful company; however, they may occasionally have discounts and promotions to attract new investors.

$6.95              Stock Trades

$8.22              Article Average

$14.45            10 Options Trades

$16.60            Article Average

$19.95            Broker-Assisted Trades

$26.47            Article Average

2. Scottrade

The Capital One system is ideal for beginners, but if you are looking to start and then build your skills, you may start and grow with Scottrade. It is a little more complex than Capital One, but over time, it will allow you to access more advanced features whenever you are ready for them. There are different platforms that may be used depending on your needs; there is Scottrade, Scottrader, Scottrade Elite and OptionsFirst.


[+] It has different platforms for people with different trading experience

[+] Pick the platform that suits your trading needs

[+] It has tools that advanced traders will require

[+] The knowledge center offers multimedia learning options

[+] There are apps that allow you to manage your account

[+] They have investment-planning calculators

[+] The knowledge center videos explain how to use the platforms

[+] Scottrade’s account monitoring tools are good

[+] The platforms are customizable

[+] Drag and drop customization is handy and convenient

[+] The app is available on the iOS and Android


[-] It is not ideal if you are looking to trade options

[-] The knowledge center videos do not explain the intricacies of trading

[-] You need an account balance of $2500 to open your account

[-] The options-per-contract rate is incredibly expensive

[-] Fees are rather high when compared to others


The cost of trades is not prohibitively high. The biggest cost issue is the minimum deposit. You still get to keep your deposit once your account is open, but the high opening deposit may dissuade some newbie investors from taking the plunge.

$7.00              Stock Trades

$8.22              Article Average

$19.50            10 Options Trades

$16.60            Article Average

$32.00            Broker-Assisted Trades

$26.47            Article Average

3. Thinkorswin by TD Ameritrade

TD Ameritrade is not that different from Scottrade, but their fees are a little higher. Nevertheless, they are still a good choice for beginners. Many online brokers have some form of educational facility, but TD Ameritrade has a particularly good one that you can tailor to fit your level of experience and knowledge. They also provide you with the tools you need to reach your trading goals.


[+] There are numerous platforms to suit your level of experience

[+] The different platforms allow you to tailor your trading experience

[+] Their educational facility is far above average

[+] Okay for intermediates, beginners and advanced traders

[+] Tailor your learning experience to your level of trading experience

[+] Learn about online trading and how to use their different platforms

[+] Each platform’s website has its own glossary

[+] Numerous planning tools and calculators

[+] There is a paper money account to help you learn about trading

[+] There is a mobile app and three trading platforms

[+] They have fantastic analytics charting options

[+] The app works on the Android and iOS

[+] There are no trading minimums

[+] You do not have to pay a minimum deposit to open an account


[-] Their fees are on the high side

[-] The platform teaching videos assume you know about online trading

[-] Some of the glossary terms are better researched on Google

[-] The forums have people on them that are out to hoodwink you

[-] Good for dabbling, but not for frequent smaller transactions


This company is great for learning how to trade, and if you become good at it, you may be able to stick with this company. However, their high fees make numerous and smaller trades more expensive, which will cut into your profits. Still, there are many people that start with TD Ameritrade and stick with it. The cost of their broker-assisted trades suggests they do not want you calling them.

$9.99              Stock Trades

$8.22              Article Average

$17.49            10 Options Trades

$16.60            Article Average

$44.99            Broker-Assisted Trades

$26.47            Article Average

4. OptionsXpress by Charles Schwab

If you are brand new to the world of investing, then perhaps OptionsXpress isn’t the best service for you. It has made an appearance in this article because it has a paper money account. They call it a virtual trading tool, and it is better than what Thinkorswin offer, but the OptionsXpress will teach you very little about basic trading and it will assume you have a reasonable amount of trading knowledge.


[+] Try your trading strategies on their mock virtual market

[+] Suited for knowledgeable beginners and intermediate traders

[+] They allow you to experiment in a safe environment

[+] Good for people that wish to try higher risk

[+] There are webinars and live workshops about stock trading

[+] The educational center has articles and a glossary

[+] It has tools for advanced traders

[+] Good if you are looking to advance beyond the novice level

[+] Customize your user interface to find the data you need quickly

[+] There is a mobile app for the iOS, Android and Kindle Fire

[+] Create watch lists and options chains

[+] There is no minimum opening deposit


[-] The webinars are poorly archived

[-] Live workshops are not archived/saved in any way

[-] The educational center assumes you know already about trading

[-] They expect you to maintain an account at $2000

[-] The trade prices are rather high


This company falls to the bottom of the “Best brokers for beginners” list because you do need a fair amount of knowledge about investing before starting, and because the prices are relatively high compared to the others on this list, especially when you consider that they require an average account balance of $2000. However, the virtual marketplace is of a very high quality, and may be suitable for novices that wish to advance.

$8.95              Stock Trades

$8.22              Article Average

$14.95            10 Options Trades

$16.60            Article Average

$8.95              Broker-Assisted Trades

$26.47            Article Average[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

About The Author

Ben Todd

Ben was a seriously broke graduate student with bad credit who after finding himself rejected for any sort of credit card or loan for most of his adult life, finally decided to get his financial life in order. 'He spent several years reading as many financial advice books and blogs as he could.And suprisingly, Ben found he actually LIKED the topic of personal finance; after fixing his own finances, starting his own successful work at home website business, and using his earnings to get out of debt, created to help others do likewise!

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