Dummies Guide to investment Banking
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We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers.
When you’re a beginner investor, the right broker can be so much more than simply a platform for placing trades. It can help you build a solid investing foundation — functioning as a teacher, advisor and investment analyst — and serve as a lifelong portfolio co-pilot as your skills and strategy mature.
What is a stock broker?
A stock broker is a person or an institution licensed to buy and sell stocks and other securities via the market exchanges. Back in the day, the only way for individuals to invest directly in stocks was to hire a stock broker to place trades on their behalf. But what was once a clunky, costly transaction conducted via landline telephones now takes place online, in seconds, for a fraction of what full-service brokers used to charge for the service.
NerdWallet’s picks for best brokers for beginners take into account features that are particularly helpful to new investors. Read on to see our top picks by category.
The best online brokers for beginners overall
These brokers offer tons of educational offerings for beginners (and the advanced investor you’ll eventually become), affordable commissions, a broad range of inexpensive investment options and strong customer service support.
TD Ameritrade and Charles Schwab receive NerdWallet’s top 5-star overall rating for good reason. Each offer round-the-clock customer service, abundant online educational content, in-person support at local branches (300 offices at Schwab and 100 at TD Ameritrade). At both, investors also have access to a healthy lineup of commission-free investments for mutual funds and exchange-traded funds (ETFs).
Trade Source, one of Schwab’s two trading platforms, is an ideal on-ramp for beginning stock investors. Navigation on the web-based platform is simple, the research and tools are robust and access comes with no trade minimums or fees. Investors ready to wade into more sophisticated research, screening, technical indicators and market data can easily venture over to the company’s desktop platform, StreetSmart Edge.
TD Ameritrade also offers multiple trading platforms that earn high marks for free access to an impressive lineup of research and analytical tools. Investors select a skill level — rookie to scholar — and TD points to appropriate educational and research resources. One standout feature is the broker’s pre-built, customizable asset allocation model portfolios, which help customers assemble a properly balanced portfolio of stocks, ETFs, mutual funds and bonds. Both brokers have mobile trading apps that closely mirror the experience and capabilities of their online platforms.