The 9 Best Brokerage Accounts for Beginners

Financial markets are changing very fast due to the unprecedented times we are facing. There is a need for people to look for various ways to earn money other than ordinary businesses. One of the best financial markets that most people in the world are exploring is the stock market. Those who have been in the business for a long time have good experience in the field. If you need to start a stock market business, you have to check on the best brokerage accounts for beginners.

The stock market is very volatile as it keeps on changing now and then. It is crucial to note this before you start participating in the business. However, there is a possibility of making huge profits. I am committed to helping beginners start the business and prosper by giving them the necessary information to keep going. The information you get here is unbiased, meaning that we look at all sides of the market.

To help beginners get the best experience in the stock market, I selected beginner accounts based on various aspects. These include excellent customer service, easy navigation on the concerned platforms, the concerned companies’ reputation, and transparent pricing structures showing how you earn. I want to ensure that you get the most beneficial information to ensure that you do not face disappointments.  

What is a stock brokerage market?

best brokerage accounts for beginners

Stock brokerage involves buying and selling of shares as well as other securities via the stock market exchanges. Some people or firms have licenses to carry out the stock brokerage business and are the ones we call stock brokers. In the modern-day world, we have hundreds of stockbrokers who operate online, and all you need is to create an account online using your smartphone or computer.

Stockbrokers usually handle transactions of their customers and benefit by getting commissions. The higher the customers transact, the higher the commissions for brokers. To carry out the business as a stockbroker, you must relate to the New York Stock Exchange (NYSE). You can also use other platforms such as NASDAQ. You as an individual can become a member, or the company you work for must be a member. 

Individual brokers and brokerage firms get their licenses from the Financial Industry Regulatory Authority (FINRA). It is easier to work with a brokerage firm than working with an individual broker. Stockbrokers are elites, and one should have a bachelor’s degree in business administration or finance to become one. It means that such people are highly knowledgeable of the money market.

As I mentioned earlier, the business has become more comfortable due to the online buying and selling of securities. Initially, it was challenging for low-income earners to enter the industry, and only large investors could operate in the stock market. Currently, we even have Robo advisers who can give you clear advice on how you can invest in the brokerage market for real profits. 

What are the different types of stockbrokers?

Choosing the right stock broker should be the first thing you should do before entering into the business. Even though there might not be the best broker as they operate under rules and regulations, some come up with a few offers to attract more customers to their sides.

The pricing options for different brokers differ, and you should choose the one with fair prices if you want to go for the pricing option. For short-selling stocks, you have to select a stockbroker with a good shortlist. 

Below are the two types of stockbrokers you can work opt for in the stock market business.

1. Discount broker

A discount broker buys and sells orders at a reduced commission rate. The broker does not advise on how to invest in the stock market. Moreover, a discount broker does not perform analysis on behalf of the client.

Most discount brokers operate online, and overheads for online brokerage are small. Discount brokers receive orders from clients, and in most cases, the clients have to execute most of the activities by themselves.

2. Full-service broker

A full-service broker is a kind of stockbroker who gives full services to clients. Unlike the discount broker, who only receives clients’ orders, a full-service broker offers services such as research and advice, tax tips, and retirement planning, among others. The commissions are high, and the cost of these services is also high. If, as a client, you have no time to follow up on complicated issues involved in the trading, a full-service broker then becomes handy. 

When you register with a firm to trade on securities, the company assigns you to an individual stockbroker or financial advisor to take you through all the necessary processes.

How to open a brokerage account?

Now that you have learned a few issues about the stock market, you might be asking yourselves about the process of opening a brokerage account. It is a type of account that you can use to buy and sell securities such as bonds, stocks, and mutual funds. Choosing a brokerage account is not a difficult task, especially if you understand what you need.

Choosing a brokerage account involves; 

1. Determining the type of account to open

There is a short-time brokerage account where you can invest for a near goal and another where you can invest for retirement, meaning you will be around for long. It is essential to keep in mind the type of account to open.

2. Comparing the costs and incentives

Every stockbroker wants to attract as many customers as possible to their side. Some have incentives that they offer, and you can quickly come across a broker who offers a discount when you transfer investment from another firm. Also, check on the fees involved in the trading. See all the pricing schedules and try to understand them. Getting a broker with the lowest pricing should be your priority.  

3. Checking services and conveniences available

Companies are not the same. You have to check the services offered apart from the stock trading. You can benefit from various financial advices that can help you to advance economically. Furthermore, getting a convenient firm is advisable whereby you can easily interact with them when in need if you get one with physical branches, the better. 

4. Deciding on the brokerage firm to open an account 

Once you have the necessary information about various brokerage firms, you can decide on the best company to open an account.

5. Filling out the account application

Once you choose your favorite stockbroker, the next thing is to open an account with them. Online account opening is quick and convenient since you do not have to travel to the nearest office.

6. Funding your account

Funding your account means availing funds in your account. You can deposit money in your account by depositing a check, wire transfer, or even performing an electronic funds transfer (EFT).

7. Researching investments

At this stage, you can start. You need to decide on how to choose stocks, bonds, and or funds wisely. 

Summary of best online stockbrokers

While we have many stockbrokers in the market, I have sampled the best nine you can consider when opening an account. You can study them and choose the best to have an account.

1. TD Ameritrade

TD Ameritrade brokers offer a trading platform for trading financial assets such as common stocks, futures contracts, preferred stocks, exchange-traded funds, mutual funds, cryptocurrency, and fixed-income investments. The company also offers margin lending, whereby you can borrow money to invest in the stock market and repay with interest. You can also benefit from cash management services from the firm’s financial experts.

With TD Ameritrade, you can invest in online stock trading, long-term investment, and retirement planning. The company offers personalized education to meet your specific demands. At TD Ameritrade, there are $0.00 commissions, zero platform fees, no trade minimums, and no data fees.

2. E-TRADE

The company offers a trading platform for trading financial assets such as common stocks, futures contracts, preferred stocks, exchange-traded funds, mutual funds, options, and fixed-income investments. It is an electronic platform where you can trade online. The company also offers student loan benefits, administration services, employee stock ownership plans, advisor services, online banking, margin lending, and cash management services. 

At E-TRADE, you also benefit from referral bonuses. You can get a $50 Amazon.com Gift Card for each newly qualified member you refer to the E-TRADE company.

3. SoFi

SoFi (Social Finance Inc.) is an online personal finance firm. It is a mobile-first service with headquarters in San Francisco, USA. The SoFi provides various financial products such as personal loans, student loan refinancing, credit cards, mortgages, investing, and banking, which are purely online.

You can use either a computer or your smartphone. You can also trade in stocks and ETFs and buy crypto via SoFi. Furthermore, you can start automated investments with the company.

4. Zacks Trade

As an online stockbroker, Zacks Trade offers penny-a-share trades, a robust trading platform, and does not charge extra for broker-assisted transactions. The company charges $0.01 per share and each account minimum is $2,500. The trading platform allows you to access international exchanges. Furthermore, the company has lower margin rates, which start at 3.59% or even lower depending on your balance. 

When you open an account with the Zacks Trade, you will get powerful trading tools and outstanding customer support in times of need. You can run your brokerage account online by getting their app at Google Play Store or Appstore. 

5. Fidelity

Fidelity offers trading and brokerage services in America. The Fidelity gives financial planning and advice, retirement plans, and wealth management services. It is an excellent option to help you solve complex financial issues, especially when planning your retirement benefits. 

Fidelity has $0 commission trades, no account fees, and no minimums to open an account. You can carry all your smartphone operations by getting the app from Google Play Store or App Store.

6. Charles Schwab

Charles Schwab is an American financial services company that started in San Francisco, California. Its headquarters are in Westlake, Texas. The company offers $0 online stock and ETF trade commissions, no-transaction-fee mutual funds, and thousands of non-load. Moreover, there are no charges to work with a Schwab Financial Consultant, although other costs such as fund expenses, account fees, and brokerage commissions may apply. 

To get started with Charles Schwab, all you need to do is choose your account type, complete your application and start funding and investing. The company also makes it easy to switch brokerage firms.

7. Merrill Edge

Merrill Edge is an electronic trading platform by BofA Securities. BofA is part of Bank of America’s banking division. At Merrill Edge, you can get personalized investing with insights, tools, and guidance to invest wisely. The company allows $0 minimum investment for the Merrill Edge® Self‑Directed $0 Stock, ETF, and Option Trades, $5,000 Minimum investment for Merrill Guided Investing (Online), and $20,000 Minimum investment for the Merrill Guided Investing (Online with an advisor). 

You can choose your preferred rewards, which include; 

  • Gold-$20k to <$50k three‑month average combined balance.
  • Platinum- $50k to<$100k three‑month average combined balance.
  • Platinum Honors-$100k+ three‑month average combined balance.

8. Vanguard

Vanguard is an American investment advisor with headquarters in Malvern, Pennsylvania, and is among the biggest providers of mutual funds and ETFs. The company also offers variable and fixed annuities, brokerage services, educational account services, asset management, financial planning, and trust services.

Instead of shareholders owning the Vanguard, the people who invest their funds own it. It offers low costs for its investors to help them get more returns. The company is easy to reach online in case you need them to settle an issue. 

9. Robinhood

Robinhood has headquarters in Menlo Park, California. As a financial services company, Robinhood offers a website and a mobile app that allows people to invest in stocks and ETFs via the Robinhood Crypto. You can benefit from commission-free investing, as well as the tools you need to put your money into the operation.

Upon signing up, you get your first stock for free, whereby terms and conditions apply. You can invest with any amount you have as there are no limitations. Use your mobile phone and trade in real-time.

Bottom line

A brokerage account allows you to buy and sell shares. Brokerage firms and individual brokers need licensing to carry out the business. Furthermore, individual brokers should have a bachelor’s degree in business administration or finance.

Various brokers have various terms that they use to attract more clients. Therefore, you need to study the different available options to know the best company to use. A full-service broker is better as compared to a discount broker.

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