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Best Stock Brokers for Beginners of 2022

Ashley Jackson

Want to start trading stocks? Set yourself up for success by selecting a stock broker that understands your needs. We’ve considered the best stock brokers based on commissions, account minimums, ease of use, and overall quality.

Discover new ideas from an active investing community

$0

Fee Per Trade

$0

Account Minimum

Overview

Public provides access to a powerful suite of tools, daily insights from millions of investors, and curated content and news, so all members can have the tools and resources needed to invest with context.

What we like

  • All-in-one investing platform 
  • Wide selection of product offerings 
  • Commission-free
  • Insights from an investing community of millions
  • Invest in any fractional asset
  • Live in-app shows about the markets

What we don't

  • Limited account types
  • No in-person customer support

Trade a wide range of ETFs

$0 - $9.95

Fee Per Trade

$0

Account Minimum

Overview

Ally Invest offers competitive pricing on financial securities and robust research tools to help you make better-informed investment decisions.

What we like

  • Low cost commissions 
  • Wide selection of product offerings 
  • Up to $3,000 cash bonus
  • No minimum deposit required
  • Up to $75 for brokerage transfers

What we don't

  • Crypto not supported
  • Mutual fund fees

Margin trading available with premium account

$0 - $9.95

Fee Per Trade

$0

Account Minimum

Overview

Axos Self-Directed Trading provides investors commission-free trades and an all-in-one solution for banking and investments.

What we like

  • Commission free trading on most assets 
  • Easy to use platform
  • Wide selection of product offerings 
  • No minimum deposit required
  • Extended market hours for premium accounts
  • Joint accounts available

What we don't

  • Crypto not supported
  • Premium account required for certain features
  • No in-person customer support

Offers fractional share trading

$0

Fee Per Trade

$0

Account Minimum

Overview

SoFi allows you to trade cryptocurrencies, stocks, and ETFs. It also uses the SIPC protection scheme and offers up to $500,000 in insurance coverage.

What we like

  • Free trading on ETFs and stocks
  • Offers fractional shares
  • A wide variety of cryptocurrencies
  • Free financial advice
  • No account minimum

What we don't

  • Does not offer mutual funds, bonds and options
  • Limited track record

Get up to $625 when you open and fund an account

$0

Fee Per Trade

$0

Account Minimum

Overview

J.P. Morgan Self-Directed Investing offers beginners and seasoned investors free trades and a portfolio tool to help build out their asset allocation.

What we like

  • Unlimited trades with $0 commissions
  • No minimum investment
  • Manage investments from a mobile app
  • Portfolio builder tool to help with asset allocation
  • Access to research and insights

What we don't

  • Limited accounts, such as no SEP-IRA
  • No fractional share trading

INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

What do stock brokers do?

Stock brokers are usually the first point of contact for customers who want to invest in stocks and securities. A stock broker is an intermediary between the investor and the company whose shares are sold. The stock broker will act as a liaison between these two parties, facilitating the sale of the shares.

The main duties of a stock broker include:

  • Researching companies to find out their worth
  • Communicating with investors about their needs
  • Helping investors make decisions about which stocks are best suited for them

Why use stock brokers?

Stock brokers have access to resources you may not have at your disposal. For example, they may have access to investment research and financial news that can help you make better-informed decisions about which stocks to buy or sell.

They can offer investment advice based on what type of investor you are and your goals for investing in the stock market. If you’re just starting, they’ll likely recommend low-risk and low-volatility investments to help build your portfolio over time.

You can also work in a self-directed way where you can make use of the research yourself from the stock broker.

Are stock brokers safe?

In general, stock brokers are safe if they are reputable.

Before proceeding with a broker, you should always check with the Better Business Bureau. This will ensure that the broker has an excellent rating and has not been involved in any problems in the past.

Also, check out how long they have been in business and how many customers they have served. If they have been around for a while, then that is a good sign that they are doing something right and will continue to do so in the future.

What are the fees for stock brokers?

The stock brokerage industry is very competitive, so most online brokers offer various commission plans and account types.

  • Account minimum: The first thing to consider is how much money you need to open an account. Most brokerages require at least a small amount to ensure you have enough money to cover your transactions. This amount is called an account minimum, and it can vary from $0 (zero) up to hundreds of thousands of dollars, depending on the size of your portfolio or other factors.
  • Commission rates: Stock brokerage commissions are based on a percentage of the total amount invested in your account, commonly known as “managed assets” or fees can be based on a flat fee. For example, if you have $500,000 worth of stocks in your portfolio, your broker would charge a 1% commission on all trades executed during the year. This fee would be deducted from your cash holdings.

Types of stock broker

Here are some of the most common types that you may want to consider:

  • Full service stock brokers: Full service brokers are the traditional way to invest in the stock market. These brokers provide all the services and tools that you need to invest, including research, education, and advice. Full service brokers usually charge higher commissions than discount brokers, but they also offer more services and tools.
  • Discount stock brokers: Discount stock brokers offer investors low-cost trading services without all the bells and whistles that full service brokers provide. They typically charge lower commissions than full service brokers and don’t offer advice or education to their clients – which can be good if you’re looking for a simple way to buy and sell stock.
  • Online brokerages: Online brokerages are essentially discount brokerages that operate online, so instead of calling your broker on the telephone, you place trades online through a website or mobile app. The advantage of online brokerages is that they can be used from anywhere in the world with an internet connection – no need to drive out to your local branch office. The disadvantage is that some online brokerages don’t offer as many features or have as many resources as their brick-and-mortar counterparts.

What types of stock can you invest in?

Here are some of the most common types that you may want to consider:

Common stock

Common stock is typically purchased through an open market sale or by issuing additional shares from the company treasury. In an open market sale, the shares are sold through a broker, who transfers them to another investor’s account. In addition to trading common stocks through brokers, you can purchase them directly from company websites or online discount brokers that allow self-directed trading without requiring investors to meet certain minimum deposits or trade minimums.

Preferred stock

Preferred stock is a security that allows investors to receive dividends before common stockholders do and have their investment repaid before common stockholders if the company goes bankrupt or liquidates its assets in bankruptcy court.

Large-cap stocks

Large-cap stocks can be an excellent place to invest. They tend to be less volatile than smaller companies and have more consistent earnings. They also offer larger potential returns if you buy them when undervalued and sell them when overvalued.

Mid-cap stocks

Mid-cap stocks are generally defined as being between the small and large cap on the market cap spectrum. Mid-caps are generally thought by many experts to be more promising than their large-cap counterparts because their size does not necessarily limit their growth as it is with large caps. The key here is that mid-caps have yet to reach the heights of large caps, but with time, they could do so, making them a good investment option for those looking for growth in their portfolio but don’t want to invest in small caps just yet.

International Stocks

International stocks are issued by companies based outside of the United States. The most popular types of foreign stock include European and Asian companies. These often offer greater profits than domestic stocks but have higher risk factors because they aren’t always regulated by U.S. government agencies like the Securities Exchange Commission (SEC).

Benefits of investing through stock brokers

Here are some of the benefits of investing in stocks through stock brokers:

  • Investment advice: Stock brokers have access to information unavailable to the general public and have more experience than most investors. So if you’re just starting, it’s always a good idea to consult them before making any decisions on your investments.
  • Trading: A stock broker will help you trade stocks and other securities. The fees associated with trading are different from broker to broker, but they are generally low. You will also access real estate and commodities such as gold and silver. Some brokers even allow you to trade foreign currency.
  • Record keeping: When you invest in stocks with a stock broker, there is no need to keep track of all your records yourself. A good broker will keep all your information safe and up-to-date so that you can access it anytime and anywhere worldwide. This helps you manage your investments more efficiently.

How to choose the best stock brokers for beginners

Here are some of the things that you should know about stock brokers:

  • Know your needs: Before shopping around for a broker, take some time to think about what you want from them. What kind of stocks do you plan on buying? Are you looking for someone who can help select individual companies or prefer someone who advises about sectors or industries? Do you want someone to manage your portfolio or execute trades? Knowing what kind of support you need upfront can make the search easier.
  • They must be licensed: This is one of the most important things when investing in stocks since it protects both parties involved in the transaction.  The license will allow them to operate legally and ensure that there is no fraud involved when dealing with these professionals. It also provides that all transactions are legal and legitimate.
  • Narrow the field: Hundreds of online stock brokers are out there, so narrowing down your options can help speed up your process and make sure you choose one that fits your needs and budget. You can find a broker with low or no trading fees, supports multiple platforms, including mobile, has great customer service, and offers free tools like educational materials and financial calculators.
  • Figure out the fees: Understand what it will cost you to use each brokerage firm before signing up. It’s important to know that not all brokerage firms charge the same or even charge fees. Some firms have no minimum balance requirements or maintenance fees, while others may charge for services like paper statements or online access fees. Be sure to ask about hidden fees before signing up, so there are no surprises later.