Best brokers for beginners in 2018

Top 2 online brokers for beginners
DEGIRO Pepperstone
Best brokers for beginners in 2018

The brokerage world can be intimidating and confusing, especially for a beginner. Complicated words, complex definitions, and head-spinning graphs can discourage people from investing themselves. 

Our aim is to help people invest, and with this article, we wish to help the beginners. The article will include the best brokers to choose as a beginner and will outline each broker's strength.

We have tested a total of 17 brokers on our site and picked the best 10 brokers for beginners. At the end of the post, we have also compiled a useful educational resource 101. This consists of useful educational content from our previous posts.

This post will focus on two sections: brokers for beginner buy and hold investors, and brokers for beginner frequent traders. Beginner buy and hold investors are people who wish to invest their money in the long run, and make few trades per month. Beginner frequent traders are people who are new to trading. 

Take a moment to look through the following table. It is a compiled list of all the brokers in this article, and also a useful resource to see which broker you can open an account at:

Broker Description From which regions you can open an account?
Best brokers for beginner buy-and-hold investors
Saxo Bank Danish investment bank Worldwide except for the US
Strateo Swiss online broker Europe
DEGIRO Upcoming Dutch discount broker Europe
Swissquote Swiss online broker Worldwide except for the US
Tradestation US-based broker Worldwide
Best brokers for beginner traders
DEGIRO Upcoming Dutch discount broker Europe
Pepperstone Australian discount forex broker Worldwide except for the US
Tastyworks US-based options-specific broker Worldwide
Oanda US-founded forex and CFD broker Worldwide 
eToro Israeli CFD broker Worldwide except for the US

The two sub-groups differ in the style of trading you wish to start investing with. Let's take a look at each.

Brokers for beginner buy-and-hold investors

best-brokers-for-beginners-blogpost-buy-and-hold-investors-infographic

Buy-and-hold investors are characterized by buying a portfolio of assets and holding them in the long run. They adjust their investment portfolio usually once every two-three months.

The brokers we chose for a beginner buy-and-hold investor have the following characteristics:

  • Competitive pricing - to ensure low long-run costs
  • User-friendly trading platform - for an easy learning curve
  • Wide product portfolio - for many investment opportunities

Brokers for beginner traders

best-brokers-for-beginners-blogpost-beginner-frequent-traders-infographic

Beginner traders are characterized by making many trades a day to maximalize their potential return. They will adjust their portfolio several times a day. 

NOTE: Trading frequently, also known as day trading, carries high levels of risk, and can incur high transaction cost with your broker. Each time you make a trade, you are subject to the volatility of the market, and transaction fees may occur. Also, day traders usually use leverage, that carries on further risk to your invested money. Please go to the learning section of this article if you are not fully aware of these risks.

The brokers we chose for a beginner buy-and-hold investor have most of the following characteristics:

  • Competitive pricing - to ensure low transaction costs
  • Asset classes with high leverage - Forex, and CFDs if possible
  • Good educational content - to enable beginners to learn through quality content

Now that it is clear, how, and why the two categories are divided. Let's go, and take a closer look at each of the brokers, to get you up to speed learning, and make the right choice for you today.

Best brokers for beginners
What makes a great broker for beginners

When you want to start trading and choose the most suitable broker for your needs, you should keep your eyes on the important criteria like priceing, trading platform or educational tools. 

We tested online brokers according to more than 60 criteria. In this article, we will uncover the 5 most important criteria a starter must take into account for choosing the most suitable broker.

The 5 most important criteria for brokers suitable for beginners are:

1. Fee structure: The overall cost of a typical trade can be 10-15 times higher at one broker compared to another. Worth to check the fees.
2. Web trading platform: A user-friendly and well-equipped trading platform can significantly increase your trading comfort.
3. Educational tools: You are not familiar with concepts like spread or leverage? Good educational tools help you understand the basics of trading.
4. Funding and withdrawal:  Withdrawing money from your account can be 5 times longer and more expensive at one broker compared to another.
5. Product portfolio: You want to invest in Amazon and Bitcoin? They might not be available. Check the product coverage before opening an account.

Best brokers for beginners
Best brokers for beginner buy and hold investors

We think, different brokers are suitable for people who don't have enough time to deal with investments on a daily basis. In this section, you will find our top five picks for best brokers for beginner buy and hold investors.

We bet the fees are on the top of your mind when you want to select the best online broker for your needs. We also believe lower fees can seriously enhance your performance even if you are a buy and hold investor.

You can compare trading and some non-trading fees below. To find out more about how the fares compare between the different brokers, check out our ultimate comparison table.

Trading fees

In order to make trading fees comparable, we disclose the stock trading fees. We think these are the most relevant fees for a buy and hold investor.

Below you can see how much a $2,000 stock trading costs. The typical cost covers the commission. A commission is a percentage based fee you pay based on the traded amount. For example, if the commission is 0.1% and you trade $2,000, your trading fee will be $2. Some brokers also apply a minimum fee.

For example, Saxo Bank has a $15 minimum fee for the US stock trades. So even if your percentage based trading fee is lower, you have to pay least $15 for one trade.

The cost of a typical trade Saxo Bank Strateo DEGIRO Swissquote Tradestation
USA stocks $15 $15 $1 $25 $5
UK stocks $12 $22 $5 $36 NA

NA = this asset class is not provided

As the table shows, the Dutch discount broker DEGIRO is the cheapest in the stocks.

Non-trading fees

Non-trading fees can also lower your investment/trading performance. Inactivity fee is interesting for buy and hold investors, while withdrawal fee for traders taking out profits every month.

Inactivity fee is applied if you do not trade or do not log in for a certain period of time. The withdrawal fee is the cost of taking out money from your account.

  Inactivity fee Deposit fee Withdrawal fee
Saxo Bank $100 / 6 months, after 6 months of inactivity No No
Strateo CHF 25 / 6 months, after 6 months of inactivity or less than 5 trades in the previous year No CHF 2 to a Swiss bank account and CHF 15 to foreign bank account
DEGIRO No No No
Swissquote No No CHF 2 / EUR 2 / USD 10 dependent on the currency
Tradestation $50/ year if less than $2,000 on balance or less than 5 trades/year. No $35 to non-US countries / $25 to US

Now that we compared the fees, trust us, you need to look into a bit deeper than just fees when selecting a broker. Let's investigate the best brokers for beginners one by one. 

 

Saxo Bank

6

BACKGROUND:

Danish investment bank specializing in online trading and investments.

BEST FOR:

Using research and educational tools.

MINIMUM DEPOSIT:

$2,000

AVAILABLE DEMO ACCOUNT:

Yes

OVERALL SCORE:

4.8/5

Visit broker

/best-brokers-for-beginners-blogpost-saxo-bank-web-trading-platform-screenshot

Web trading platform – ★★★★☆

Saxo Bank's trading platform, the SaxoTraderGO is a great platform. It is easy to navigate and provides all trading tools. However, its customizability is limited.

Education – ★★★★★

You can attend online webinars held by Saxo experts or become a “student” at the Saxo Academy, where you can choose from tons of online educational videos.

Funding and withdrawal – ★★★★★

Saxo has an easy interface and multiple options to fund and withdraw money. You can transfer money via bank transfer or credit/debit cards. Furthermore, the withdrawal is free of charge.

Product portfolio ★★★★★

Saxo Bank will give you wide access to international markets in almost all asset classes: equities, ETFs, forex, bonds, options, futures, CFDs, cryptos. Only the mutual funds are missing from the product offer. 

 

Full Saxo Bank Review

 

Strateo

23

BACKGROUND:

Strateo is a Swiss-based online broker founded in 2009 as a subsidiary of Keytrade Bank in Belgium.

BEST FOR:

Trading on a simple and easy-to-use platform.

MINIMUM DEPOSIT:

$1,000

AVAILABLE DEMO ACCOUNT:

Yes

OVERALL SCORE:

4.4/5

Visit broker

best-brokers-for-beginners-blogpost-strateo-web-trading-platform-screenshot

Web trading platform – ★★★★☆

Strateo's web platform offers a clean and easy-to-use interface. It can be easily navigated, and customers will have no problem understanding the basic functions. On the flip side, we missed the customizability and the price alerts.

Education ★☆☆☆☆

Strateo offers the bare minimum educational content, there is an 'Education' section in your account with basic content on trading, markets, and platform tutorials.

Funding and withdrawal – ★★★★☆

The funding and withdrawal process is user-friendly and fast. On the flip side, you can only fund and withdraw via bank transfer.

Product portfolio ★★★★★

It has an excellent product portfolio offering, you can find all asset classes: equities, ETFs, forex, mutual funds, options, futures, bonds, cryptos.

 

Full Strateo Review

 

DEGIRO

15

BACKGROUND:

Rapidly growing Dutch discount broker.

BEST FOR:

Trading at a favorable cost structure.

MINIMUM DEPOSIT:

None

AVAILABLE DEMO ACCOUNT:

No

OVERALL SCORE:

4.3/5

Visit broker

best-brokers-for-beginners-blogpost-degiro-web-trading-platform

Web trading platform – ★★★★☆

DEGIRO’s web platform is simple and easy to use. Even beginners will find it easy to conduct simple transactions like share dealing. On the flip side, price alert function is missing and customization is limited.

Education – ☆☆☆☆☆

Education is not provided.

Funding and withdrawal – ★★★☆☆

There are only a few options to fund/withdraw your money. One option for transferring money is the bank transfer which takes usually 2-3 working days. Beside the bank transfer, you can use SOFORT, a third party, instant deposit service provider. The money transfer at SOFORT usually takes around 30 minutes.

Product portfolio ★★★★★

You will have a wide access to international markets in all asset classes except forex. Available asset classes: equities, ETFs, mutual funds, bonds, options, futures, CFDs, cryptos.

 

Full DEGIRO Review

 

Swissquote

11

BACKGROUND:

Swissquote is a Swiss-based broker which holds a full Swiss banking license.

BEST FOR:

Themes trading

MINIMUM DEPOSIT:

None

AVAILABLE DEMO ACCOUNT:

No

OVERALL SCORE:

4.2/5

Visit broker

best-brokers-for-beginners-blogpost-swissquote-trading-platform

Web trading platform – ★★★★☆

Swissquote combines user-friendliness with a minimalistic design for its web trading platform. It has a good variety of order types and an intuitive search function. However, the customizability of your personal workspace and the charts are limited, and also lacking a clear fee report.

Education – ☆☆☆☆☆

Education is not provided.

Funding and withdrawal – ★★★★★

Swissquote offers bank and Credit/Debit card funding and withdrawal. Furthermore, the process is fast and user-friendly.

Product portfolio ★★★★☆

Swissquote offers an extensive product range, better than most brokers. It has a good international coverage within each asset class. It recently added Cryptos, however, it lacks a selection of CFDs.

 

Full Swissquote Review

 

Tradestation

22

BACKGROUND:

Tradestation is a US-based discount broker.

BEST FOR:

Beginners from the US.

MINIMUM DEPOSIT:

Cash account: $500

Margin account: $2000

Futures account: $5000

AVAILABLE DEMO ACCOUNT:

No

OVERALL SCORE:

3.8/5

Visit broker

best-brokers-for-beginners-blogpost-tradestation-web-platform

Web trading platform – ★★★☆☆

It's a well-designed web trading platform. However, it lacks some important functions, such as a clear fee report, order confirmation, and price alerts.

Education – ★★★★★

TradeStation offers trading platform tutorials and trading know-how videos with great production quality.

Funding and withdrawal – ★★★☆☆

Funding and withdrawal options are very limited compared to other brokers. You can transfer money through bank transfer or check deposit. Furthermore, with the help of ACAT (Automated Customer Account Transfer), you can also transfer securities from one account to another.

Product portfolio ★★★☆☆

Tradestation has a wide variety of US products available, however, international markets are missing. Available asset classes: equities, ETFs, funds, bonds, options, futures. 

 

Full Tradestation Review

 

 

Best brokers for beginners
Best brokers for beginner frequent traders

If you want to  start trading on a daily basis, you will need a different broker compared to a buy and hold investor. In this section, you will find our top five picks for best brokers for beginner frequent traders.

Fees, fees, and fees. We bet this is on top of your mind when you want to select the best online broker for your needs. And you are right. For a trader, the fee is a very important driver for the performance.

You can compare trading and some non-trading fees below. To find out more about how the fares compare between the different brokers, check out our ultimate comparison table.

Trading fees

In order to make trading fees comparable, we disclose forex and stock index options trading fees. We believe these are relevant fee indicators for traders.

Brokers offering forex trading apply two trading fee methods. The first version is when all of the trading fees are included into the spread except the financing rate. Imagine that the broker gives you a wider spread than it gets from the market. The difference is its profit. The other method is when you get the same spread what the broker receives from the market, but you pay a commission based on the traded amount. We believe the latter is more transparent, however, this doesn't mean the first method cannot be cheaper.

To make your life easier we will compare the trading cost of EURUSD for a typical $20,000 trade and the trading cost of 10 US stock index options.

For forex trading, the cost includes the commission and the spread cost. The wider the spread the higher your spread cost will be.

DEGIRO Pepperstone tastyworks Oanda eToro
Trading cost of a $20,000 trade, EURUSD
NA 1.1 NA 1.1 NA
Usual spread, pip, EURUSD
NA 1.2 NA 1.2 3*
Trading cost of 10 US stock index options
$5.0 NA $5.0 NA NA

NA = this asset class is not provided

*forex CFD

As you can see, Pepperstone and Oanda have highly competitive forex trading fees, while DEGIRO and tastyworks are great for options and futures trading.

If you are interested in forex brokers only, please visit our best forex brokers blog post.

Non-trading fees

Non-trading fees can also lower your investment/trading performance. Inactivity fee is interesting for buy and hold investors, while withdrawal fee for traders taking out profits every month.

Inactivity fee is applied if you do not trade or do not log in for a certain period of time. The withdrawal fee is the fee of taking out money from your account.

Fee category Inactivity fee Deposit fee Withdrawal fee
DEGIRO no No No
Pepperstone No 3% for credit/debit card, free for other deposits $20 for international bank transfer
tastyworks No No $25 for US withdrawal and $45 for non-US withdrawal
Oanda €10/month after 2 years of inactivity on the account No €15 for bank transfer
eToro $5/month if you do not log in for 12 months No $25

Now that we compared the fees, trust us, you need to look into a bit deeper than just fees when selecting a broker. Let's investigate the best brokers one by one. 

 

DEGIRO

15

BACKGROUND:

Rapidly growing Dutch discount broker.

BEST FOR:

Trading at a favorable cost structure.

MINIMUM DEPOSIT:

None

AVAILABLE DEMO ACCOUNT:

No

OVERALL SCORE:

4.3/5

Visit broker

best-brokers-for-beginners-blogpost-degiro-web-trading-platform

Web trading platform – ★★★★☆

DEGIRO’s web platform is simple and easy to use. Even beginners will find it easy to conduct simple transactions like share dealing. On the flip side, price alert function is missing and customization is limited.

Education – ☆☆☆☆☆

Education is not provided.

Funding and withdrawal – ★★★☆☆

There are only a few options to fund/withdraw your money. One option for transferring money is the bank transfer which takes usually 2-3 working days. Beside the bank transfer, you can use SOFORT, a third party, instant deposit service provider. The money transfer at SOFORT usually takes around 30 minutes.

Product portfolio ★★★★★

You will have a wide access to international markets in all asset classes except forex. Available asset classes: equities, ETFs, mutual funds, bonds, options, futures, CFDs, cryptos.

 

Full DEGIRO Review

 

Pepperstone

21

BACKGROUND:

Pepperstone is an Australian discount forex broker.

BEST FOR:

Trading backed by strong customer team.

MINIMUM DEPOSIT:

None

AVAILABLE DEMO ACCOUNT:

Yes

OVERALL SCORE:

4.3/5

Visit broker

best-brokers-for-beginners-blogpost-Pepperstone-web-trading-platform

Web trading platform – ★★★★★

Pepperstone offers well designed, user-friendly third-party trading platforms, MetaTrader 4 and cTrader.

Education – ★★★☆☆

Pepperstone should do better with their educational content. They offer written and video guides, but they lack organization of a well-designed lesson plan.

Funding and withdrawal – ★★★★★

You will have a wide variety of funding and withdrawal options. You can transfer money through bank transfer, electronic wallets plastic cards and so on.

Forex product portfolio ★★☆☆☆

Only forex and CFD trading. Pepperstone's FX offering is very broad compared to Oanda. However, the CFD offering is tighter than Oanda's offer. 

 

Full Pepperstone Review

 

Oanda

13

BACKGROUND:

Oanda is a privately held discount forex broker with US origins.

RECOMMENDED FOR:

Price-sensitive FX traders.

MINIMUM DEPOSIT:

Standard: None

Premium: $50,000

AVAILABLE DEMO ACCOUNT:

Yes

OVERALL SCORE:

4.1/5

Visit broker

best-brokers-for-beginners-blogpost-oanda-web-platform

Web trading platform – ★★★★☆

Oanda's trading platform is very user-friendly and offers an easy learning curve.

Education – ★★★★☆

Oanda offers live and pre-recorded webinars, that range from the basics of trading to expert topics.

Funding and withdrawal – ★★★★☆

Funding or withdrawal is possible via debit/credit card, PayPal, and bank transfer. Credit/Debit card funding is immediate, while bank wire transfer may take up to 5 business days. One withdrawal per month through credit/debit card or PayPal is free of charge.

Product portfolio ★★☆☆☆

You can trade with only forex and CFDs. Oanda's forex offering lags behind Pepperstone's. However, Oanda has a wider CFD offering.

 

Full Oanda Review

 

Tastyworks

18

BACKGROUND:

Tastyworks is a US discount options broker. It is quite young, established in 2017.

BEST FOR:

Price-sensitive option traders focusing on the US.

MINIMUM DEPOSIT:

Cash account: none

Margin account: $2,000

AVAILABLE DEMO ACCOUNT:

No

OVERALL SCORE:

4.0/5

Visit broker

best-brokers-for-beginners-blogpost-tastyworks-web-trading-platform-screenshot

Web trading platform – ★★★★☆

The trading platform is well structured, but it is also complex. It is equipped with a very strong option trading panel.

Education – ☆☆☆☆☆

Education is not provided.

Funding and withdrawal – ★★☆☆☆

For US citizens multiple money transfers and withdrawal options are available, whereas non-US citizens have limited options. For non-US citizens, the bank transfer is the only way to fund or withdraw money.

Product portfolio ★★☆☆☆

Tastyworks has a limited product portfolio. Available asset classes: equities, options, futures.

 

Full Tastyworks Review

 

eToro

14

BACKGROUND:

eToro is an Israeli social trading broker established in 2006

BEST FOR:

Social trading

MINIMUM DEPOSIT:

$200

AVAILABLE DEMO ACCOUNT:

Yes

OVERALL SCORE:

3.9/5

Visit broker

best-brokers-for-beginners-blogpost-etoro-web-trading-platform

Web trading platform – ★★★☆☆

eToro’s web trading platform is simple and easy to use. However, we have experienced outages and breakdowns. 

Education – ★★☆☆☆

Education is not strong, there are medium quality videos about investing and the markets.

Funding and withdrawal – ★★★★☆

It is easy to deposit, there are a lot of funding and withdrawal options.You can use bank transfer, credit/debit cards, and electronic wallets like PayPal, Skrill or Neteller. Withdrawing money can take more time than it is disclosed, but at the end, you will receive your money.

Product portfolio – ★☆☆☆☆

As eToro is a CFD broker you can trade with only CFDs. Available asset classes within CFDs: equities, ETFs, indices, forex, commodities, and cryptos. Furthermore, it has some innovative CFD offerings, such as Copy Funds.

Full eToro Review

 

We hope the presented brokers helped you to find the most suitable broker for your needs.

Best brokers for beginners
Start your learning

When you are a beginner the best way to start your journey is to learn.

We have collected for you some very useful learning materials to start with.

If you are hesitating whether is whole investing and trading on your own world is the right way for you, start with our learning page.

In our learning page, you can educate yourself about the pros and cons of managing your savings on your own. On top of that you can also learn what is the difference between trading and investing. 

Go to the learn section also if you have problems with answering questions like I am from UK, can I open an account at a US broker? Among the articles, you can find out what type of brokers are out there and what is the advantage of opening an international trading account. 

If you already decided to do it, we can provide you some useful stuff. 

For beginners aiming to become buy and hold investors we recommend to read the how to buy shares article. In this, you will have a six-step approach on how to buy shares online.

For beginners who want to learn trading, we can provide even more. Robert, who is a professional trader, wrote a blog post about how someone can become a trader. Most of the beginner traders start with forex. If you don't anything about this topic, start with our short forex 101. The CFDs are also have become very popular among traders in the last decade. Start learning about CFDs with our short CFD explanation and continue with our blog post about the pros and cons CFD trading.

Cryptos are the among the hottest topics recently. Tibor dug in into it and found out which is the safest way to invest in Bitcoin. A very interesting reading, highly recommended if you think about bet on some crypto prices.

Furthermore, when you become a bit more experienced and start to explore more complex markets like futures options you should definitely check out Gery's article on the topic.

If you are into apps, we are pretty sure you will appreciate the list of the best trading apps for learning. We are sure both beginner traders and investors will find this very exciting.

Best brokers for beginners
Bottom line

We hope, you managed to pick your favorite from the recommended best brokers for beginners. If you are still uncertain which the best online broker in 2018 is for a beginner, this little summary might provide further clarity.

Best brokers for beginner buy and hold investor

Beginners can feel comfortable with Saxo Bank and appreciate its great tools, charts and a wide range of research. However, its fee structure is mid-range, not the most competitive.

 

Visit broker

best-brokers-for-beginners-blogpost-saxo-bank-logo

Swiss Strateo is a good choice for those starting their investment journey and aiming for a simple tarding platform. Frugal buy and hold investors might feel they are paying too much for a transaction here.

 

Visit broker

best-brokers-for-beginners-blogpost-strateo-logo

Price sensitive buy and hold investors should consider DEGIRO with its highly competitive fees and wide market access. Even beginners can handle its trading platform, however, research and education are not provided.

 

Visit broker

best-brokers-for-beginners-blogpost-DEGIRO-logo

 

The theme investing and the built-in crytpo investing are two features why you will like Swissquote. However, its high pricing can carv out a serious chunck from your returns, especially, in case of smaller trades.

 

Visit broker

 

best-brokers-for-beginners-blogpost-swissquote-logo

If you are a buy-and-hold investor looking for a US based broker, check out TradeStation. It offers a good level of investor protection, the fees are competitive, and it has a well designed mobile trading platform. However, the account opening can be lengthy, and it is lacking international product coverage. 

 

Visit broker

best-brokers-for-beginners-blogpost-tradestation-logo

Best brokers for beginner frequent traders

 

Price sensitive traders should consider DEGIRO with its highly competitive fees and wide market access. Even beginners can handle its trading platform, however, research and education are not provided.

 

Visit broker

 

best-brokers-for-beginners-blogpost-DEGIRO-logo

If you are looking for a forex broker with competitive pricing, and a world class customer support, try Pepperstone. Account opening is quick and user-friendly, no minimum balance, with many funding options to choose from. 

 

Visit broker

best-brokers-for-beginners-blogpost-pepperstone-logo

 

When looking for a well-established broker with a forex focus, try Oanda. It has a very competitive forex pricing, fast and fully digital account opening, no minimum balance, and strong technical analysis tools.  

 

Visit broker

best-brokers-for-beginners-blogpost-oanda-logo

Tastyworks is recommended for price-sensitive options traders focusing on the US. It is a relatively new broker, with a good fee structure and a great customer service. However, they lack a wide product portfolio, and their trading platform feels unpolished. 

 

Visit broker

best-brokers-for-beginners-blogpost-tastyworks-logo

 

eToro is a great place for social trading and its fee structure is also competitive. On the other hand, we experienced outages and breakdowns with it's trading platform quite often. 

 

Visit broker

best-brokers-for-beginners-blogpost-eToro-Logo

 

Still not sure? Get a personal recommendation.

 

AUTHOR

Gergely Korpos
Gergely Korpos
Co-founder, CPO
Gergely's aim is to bring more clarity into personal investing. He has 10 years of experience in financial markets with GE Money, KPMG and MOL. He concluded thousands of trades as a commodity trader and financial portfolio manager
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