Best Brokers for Beginner Investors: Top Picks for 2024

How do you start investing?

To start investing, you need to open an investment account through a broker. That account is called a brokerage account, and it holds the cash you’ll use to buy and sell investments, as well as the investments themselves once you own them.

If you have a 401(k) or other employer-sponsored retirement account, you already have one kind of investment account. Many investors find it beneficial to open additional accounts when:

• Saving for retirement. If you want or need to save for retirement in an account separate from your employer, you can open an IRA. These come in two flavors: a traditional IRA or a Roth IRA. (Read more about the differences between Roth and traditional IRAs.)

• Investing for other goals. If you’re saving for a goal other than retirement or you’ve topped off your 401(k) and IRA contributions, a standard taxable brokerage account is a good option. It's called a taxable account because it doesn't come with the tax benefits that many retirement accounts offer, but that also makes it more flexible to be used for various goals.

Is money safe with a broker?

The Securities Investor Protection Corporation insures cash and securities up to $500,000, with a $250,000 limit on cash losses. But this protects you only in the event your stock broker fails. Many investments, including stocks, carry the risk of loss, and you're not protected if an investment you purchase goes down in value. You should expect the value of your investments to fluctuate, but over a long time horizon, the stock market has historically returned an average of 10% per year before inflation.

How much does a broker cost?

The brokers on our list generally have low fees as a requirement to appear here, and as you can see above, they don't charge commissions to trade stocks or most other investments. It also doesn’t take a lot of money to get started — many online stock brokers allow you to open an account with no minimum deposit requirement.

But you will need enough money to purchase the investments you choose. Stock share prices can vary widely, but some brokers allow you to purchase fractional shares, which are a smaller slice of a stock. We have a list of the best brokers for fractional shares. Other investments, like mutual funds, may have investment minimums, but generally speaking, you can find options that don't — especially at the brokers we've chosen to appear here.

» Have $500? Learn how to invest it

What's the best trading platform beginners?

For beginner investors, we look for trading platforms that are easy to understand and navigate, but can also grow with you as you begin to move away from "beginner" status and start feeling more comfortable with investing and trading. Brokers that scored highly for both ease of use and their platform's capabilities include Fidelity, Charles Schwab and Interactive Brokers. However, we selected Charles Schwab as the best platform for beginners because it stood out for its paper trading capabilities.

Can you take money out of these accounts?

Yes, but it will take more time than getting cash from your ATM — often a few business days. Your broker may need to sell securities (like stocks, bonds or mutual funds) equivalent to the amount you want to withdraw, so it's not as simple as removing cash from a savings account.

If you're taking all of your money out, whether transferring to a different stock broker or cashing out to move to Tahiti, there may be account closing fees as well.

More resources for beginners