Best Brokerage Accounts for Beginners 2021
What’s the one thing that an investment brokerage firm must have before you can consider depositing funds with them? Is it low management and transaction fees? The depth of their investment options? Is it their trading platforms, research training or quality of their customer service or financial assistance?
Whatever the case, identifying a reputable and reliable broker with all of these features can be a daunting task, especially when every industry player here claims to be the best. But don’t fret yet!
We have taken time to vet different brokerage houses in an attempt to identify one that best matches your investment needs. Here are our top picks for the best brokerage firms for 2021. But first, we look at why you need to engage one and the criteria we used in arriving at this conclusion.
Top Brokerage Accounts of 2021
You can read about the best brokerage accounts in more detail further down this page, but if you’re in a rush, here’s a quick look of the top accounts of 2021.
- Edward Jones
- Charles Schwab
- TD Ameritrade
- Ally Invest
- M1 Finance
- Interactive Brokers
Brokerage Accounts – Why do you need them?
- Helps build a portfolio: Most brokerage houses have been in existence for ages and are operated by equally experienced investment managers. Who then is better equipped to help you find the right balance for different investments making up your portfolio?
- When and how to invest: Brokerage firms offer more than just a platform that gains you access to the market. They give you all the tools necessary to help you determine the best time to buy or dispose of an investment.
- Prompt portfolio management: Don’t know-how, or just don’t have enough time, to handle your investment portfolio? The brokerage firm will provide an automated managing tool or a financial advisor that you can trust to profitably manage the portfolio.
- Facilitate buy and selling particular shares: An investment broker also presents you with less stressful access to multiple exchange markets.
- Vet legitimacy of investments: The fact that a broker lists a particular investment on their platform is indication enough that they have full confidence in its legitimacy. They save you an enormous amount of time and resources that otherwise would have been spent vetting the legitimacy of every company and instrument you are interested in.
What Criteria is used to Rank these Brokerage Accounts?
In reviewing top investment brokers and deciding who features on the list of what we consider the best in the industry today, we took into account such factors as:
- Fees and commissions
- User-friendliness and customer support
- Research and analytics tools
- Number of investment options
- Trading platforms
- Offers and promotions
- Number of markets accessed by the trader
Best 7 Brokerage Accounts 2021:
1. Edward Jones
Edward Jones remains one of the best full-service brokers with specially designed financial advisory services that target both individual investors and small businesses.
The broker also has one of the largest branch networks in North America and an equally large number of expert financial advisors that work on a one-on-one basis with their clients.
And while the rest of the world is busy getting online, Edward Jones still maintains financial advisors in all their branches to offer face to face services to their ever-growing pool of clientele.
A typical investment process starts with a sit down with the expert investor. Together, you get to explore your investment goals by evaluating such factors as your tolerance and time limit.
The expert will then walk you through the different investment vehicles including mutual funds, individual stocks, and fixed income securities like bonds from whence you decide the right percentage of each or some to feature on your investment portfolio.
Fees and minimum deposit
Edward Jones allows for the opening of taxable accounts, IRAs, 401(k), and multiple types of other investment accounts.
The investment broker doesn’t demand a specific initial deposit amounts safe for the Guided Solutions Account that requires a $5,000 minimum deposit. Charges here start at 1.35% per annum on a sliding scale while retirement accounts attract a $40 yearly fee.
- A huge number of physical branches
- Professional management makes it a passive investment opportunity
- Competitive fees for huge account balances – 0.5%/yr for accounts with $10 million
- Punitive fees for small accounts holders
- Not suitable for day trading
Depositing all your earnings in a savings account with a national bank account that won’t pay 2% as interest is inexcusable, (unless it is an emergency fund).
You also don’t have a valid reason why you are still investing with a broker that doesn’t understand or meet your investment goals.
Take the first and decide the type off investment account you want to open, and this guide will help direct you to the right broker.
And even when you don’t have a clear investment plan, we believe the robo-advisors or a sit down with a financial expert will help get your financial compass in order.
Who is an investment broker?It refers to an individual or institution that serves as an intermediary between buyers and sellers in the money markets by acting as a conduit through which investors can buy different securities from the stock exchanges.
Must I make my investment through a broker?No, you have the option of direct investments. The process is, however, tedious and bureaucratic. Plus not every company you would like to invest in has the direct investment option. You, therefore, are better off investing through the broker as it saves you both time and resources.
How much do I need to kickstart an investment journey?How much you invest largely depends on your broker's minimum deposit requirement, your disposable income, and the minimum investment required to stake in a particular stock or equity. You have to put all three factors as well as your investment goals and your target returns into consideration when deciding on the investment amounts.
What if I need the invested monies back before the maturity of the investment?Investment brokers have well laid out policies on canceling your investment and most are quite straightforward. Others like M1 Finance Robo Advisor have made it possible to sort your immediate financial emergencies without dismantling your investment portfolio by advancing you as much as 35% of your account balance as loan.
Are these investment brokerage firms regulated?Yes, all investment brokerage options are closely monitored by the Financial Industry Regulatory Authority (FINRA) that in turn operates under the U.S Securities and Exchange Commission (SEC). FINRA has the mandate to license and oversee the operation of individuals and firms offering investment brokerage services as well as discipline errant members.
Can my investment broker direct funds to international markets?How and where your money is invested depends on your choice of a broker. Most, especially the Robo Advisors, express discretion in making the investment decision and won’t even tell you where your finances were invested. Others, like Alternative Brokers, are quite transparent in how they invest your resources. They are also one of the few reliable brokers investing in international exchanges.
What if my investment broker is placed in liquidation?Virtually every registered investment broker is insured by the Securities Investment Protection Corporation (SIPC). In case your investment broker is declared insolvent, the assets under their management are transferred to SIPC for redistribution. And if the recovered capital isn’t enough to cover the refunds, SIPC will tap into its resources to cover the refunds to a maximum of $500k for securities investments and $250k for cash claims.
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