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6 of the Best Online Brokers for Newbie Investors

best online brokerage for beginners

Investing can be intimidating. Even though it doesn’t have to be complex or difficult, many of us feel like investing should be challenging.

But it doesn’t have to be that way. If you’re just starting out as an investor or you don’t have a lot of money to invest, it’s possible to access a brokerage that can help you put your savings to good use.

If you’re looking for the best online brokerage for beginners, here are a few places to start.

1. Betterment

When it comes to long-term investing for beginners, Betterment is one of my favorite places to start.

I use Betterment for my Roth IRA and the taxable investment account that acts as my travel fund. You can commit as little as $100 for investing. Betterment puts together a portfolio for you and invests the money you contribute using principles of Modern Portfolio Theory.

All you need to do is answer a few questions that help Betterment determine your risk profile. Commit your $100 by automatic withdrawal from your checking account, and you’re ready to go.

If you want to set it and forget it, Betterment can be a great tool for a beginner. You can start investing for retirement, build wealth for the future, and read up to get a better handle on investing in the meantime.

Read a full review of Betterment here.

Sign up with betterment

2. Acorns

Looking for a way to invest without thinking about it? Acorns might be the best online brokerage for beginners. One of the great things about Acorns is that you don’t have to think about putting money towards your investments.

When you connect your credit and debit cards to your Acorns account, each transaction you make is automatically rounded up to the nearest dollar. The difference — your spare change — is invested automatically.

Acorns features ETF portfolios assembled by professionals, so you don’t need a lot of money or expertise to get going. Just download the app and get started.

3. Wealthfront

If you have $500, you can open an account with Wealthfront and benefit from diversified portfolio management.

Wealthfront manages your portfolio using asset management strategies and funds. You also get the added benefit of tax optimization, and the management fee is a low 0.25 percent annually.

This is a great choice for those who have a little more to invest up front and can commit to putting in money regularly to continue building your portfolio.

Sign up with wealthfront

4. TD Ameritrade

Not everyone wants to let a robo-advisor manage everything. If you’d rather manage your money yourself, you can open a TD Ameritrade account with no minimum. Each trade will cost you $9.99, rather than the annual fee charged by most robo-advisors.

One way to get around the transaction fee is to build your portfolio using the more than 2,000 commission-free ETFs available from TD Ameritrade. You still pay an expense ratio, but you can avoid the transaction fee.

TD Ameritrade offers a number of research tools that make it a contender for the best online brokerage for beginners. Get started with an index fund or ETF strategy, and use the research tools to better educate yourself moving forward.

5. Blooom

One of the best ways to start investing is to take advantage of your company’s 401k plan; it lets you save for the future without a lot of fuss. The money comes out of your paycheck automatically, and it’s invested in the offerings from your plan.

But what if you’re unsure of what to invest in and how to manage your retirement account so it grows like you want it to? Blooom aims to help you manage your 401k.

This robo-advisor reviews your plan and minimizes fees while helping you reach your retirement goals. It’s one way to stay on track if you aren’t sure what you should do with your company’s retirement plan.

See a full review of Blooom here.

Sign up with blooom

6. Charles Schwab

If you’re a little more hands-on, this is another option for the best online brokerage for beginners. There’s an account minimum of $1,000 with Charles Schwab, but you can have it waived in many cases if you are willing to invest $100 per month automatically.

Charles Schwab charges $8.95 per trade, but you can get around that by investing in the no-fee index funds and ETF offerings available. Be careful to check that the funds you choose are Schwab funds, otherwise, the fees can add up.

You can use their helpful customer service and plentiful research tools to help you learn about investing as you go along.

Find the right online brokerage for beginners

In the end, the best online brokerage for beginners is about what works for you. As you consider where to keep your money, it’s a good idea to think about your goals and your desired level of involvement.

If you prefer a hands-off approach, using a robo-advisor service simplifies things. If you’d rather take charge and be more involved in your investments, there are options for that, too.

No matter what, it makes sense to look for an online brokerage that provides extensive research and education tools, low-cost trades, and some level of customer service, in case you get stuck.

In the end, the important thing is to get started, and there are plenty of low-cost places to start working toward a more prosperous future.

Want to get started investing?

Here are the top investing options for 2017!
NameCommissionAccount Minimum 
$4 to $79 a month$0Visit Blooom
0.5%$0Visit Future Advisor
0.15% - 0.35%$0Visit Betterment
0.49% - 0.89%$25,000Visit Personal Capital
0.25%$500Visit Wealthfront
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Published in How to Manage Money Wisely, How to Start Investing, Retirement