You need a brokerage account to buy stocks
You cannot buy stocks directly. Instead, you open an account with a brokerage — a company licensed to buy and sell stocks on your behalf. The brokerage holds your money, executes your trades, and keeps records of what you own. Most brokerages let you open an account online in 10 to 15 minutes, and you can start buying stocks the same day your money arrives.
The main brokerages available to individual investors are Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, Robinhood, and Webull. Each charges different fees, offers different research tools, and has different minimum account balances — some have no minimum at all. The choice matters less than you might think at first; what matters is opening an account and starting.
Key Takeaways
- You open a brokerage account by providing your name, address, Social Security number, and bank details on the brokerage's website — the whole process takes 10 to 15 minutes.
- Most brokerages have no minimum balance to open an account, though some require $500 to $2,500 before you can trade.
- You fund your account by linking a bank account and transferring money, which usually takes one to three business days to settle.
- Once your money is in the account, you search for a stock by its ticker symbol, enter how many shares you want, and confirm the purchase.
- You pay a commission or trading fee only if your brokerage charges one; most major brokerages charge zero commission on stock trades.
Choosing a brokerage and opening an account
Start by visiting the website of a major brokerage. Look for a button that says "Open an Account" or "get your free guide." You will be asked for your full name, date of birth, address, Social Security number, employment status, and annual income. This information is required by law — brokerages must verify your identity and assess whether you understand the risks of investing.
You will also choose the type of account. A standard brokerage account (also called a taxable account) has no contribution limits and no restrictions on when you withdraw money. A retirement account like an IRA has annual contribution limits but offers tax advantages; most people start with a standard account first. For now, choose the standard brokerage account unless you are specifically saving for retirement.
Next, you link a bank account. The brokerage will ask for your bank's routing number and your account number. You can find both on a check or by logging into your bank's website. Some brokerages verify your bank account by depositing two small amounts (usually under $1 each) and asking you to confirm the amounts; others verify when ready. Once verified, you can transfer money from your bank to your brokerage account.
Funding your account and waiting for the money to settle
After your bank account is linked, you initiate a transfer. Most brokerages let you transfer money through their website by entering the amount and confirming. The money leaves your bank account when ready, but it does not arrive in your brokerage account right away. Settlement — the time it takes for the money to actually be available to trade — usually takes one to three business days. Weekends and holidays do not count as business days.
During settlement, your money is in transit and you cannot use it to buy stocks. Some brokerages offer when ready settlement or margin features that let you trade before the money officially settles, but these come with risks and fees. As a beginner, wait for your money to settle fully before placing your first trade. This forces you to slow down and think about what you actually want to buy.
Finding and buying your first stock
Once your money has settled, you are ready to buy. Log into your brokerage account and look for a "Trade" or "Buy" button. You will see a search box where you enter a stock's ticker symbol — a one- to five-letter code that identifies a company. Apple is AAPL, Microsoft is MSFT, Amazon is AMZN. If you do not know a company's ticker, search "[Company Name] ticker" online or type the company name into the brokerage's search box and it will show you the ticker.
After you enter the ticker, the brokerage shows you the current price per share. You then decide how many shares to buy. If Apple is trading at $150 per share and you have $1,500 in your account, you could buy 10 shares. Enter the number of shares, review the total cost, and click "Confirm" or "Place Order." The trade executes when ready during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), and you now own that stock.
If you place an order after market hours or on a weekend, it will execute at the market open the next business day. The price may be different from what you saw when you placed the order, because stock prices change constantly while the market is open.
Understanding commissions and fees
Most major brokerages charge zero commission on stock trades, meaning you pay nothing to buy or sell a stock beyond the price of the stock itself. This was not always true — 10 years ago, a typical stock trade cost $5 to $10 — but competition has driven commissions to zero for individual investors at firms like Fidelity, Charles Schwab, and E*TRADE.
Some brokerages make money by charging monthly account fees, offering premium research tools, or lending out your shares to short-sellers. Read the fee schedule on your chosen brokerage's website to understand what you will and will not pay. For a beginner with a small account, the difference between brokerages is usually negligible.
What happens after you buy: holding and tracking your stocks
After you buy a stock, you own it. Your brokerage account shows your holdings, the number of shares you own, the price you paid per share, the current price, and your gain or loss. You do not receive a physical certificate — ownership is recorded electronically. You can sell your shares at any time during market hours by entering the ticker, the number of shares, and confirming the sale.
If the company pays a dividend — a cash payment to shareholders — the money is deposited into your brokerage account automatically. You can then reinvest it by buying more shares, or leave it in cash. Your brokerage sends you a tax form at the end of the year showing all your trades and dividends, which you use to file your taxes.
Common mistakes to avoid on your first trades
Do not buy a stock because you heard about it on social media or from a friend without understanding what the company does. Spend 10 minutes reading about the company on its website or on a financial news site. You do not need to be an informed, but you should know whether it makes products, provides services, or does something else.
Do not invest money you will need in the next few years. Stock prices go up and down, sometimes sharply. If you need the money in six months, the stock market is not the right place for it. A high-yield savings account is safer for short-term money.
Do not buy only one stock. Owning one company's stock means your entire investment rises and falls with that one company. Most investors own at least 10 to 20 different stocks, or buy a fund that owns hundreds. This is called diversification, and it reduces your risk.
Frequently Asked Questions
Do I need a lot of money to start investing in stocks?
No. Most brokerages have no minimum balance to open an account. You can buy a single share of almost any stock, so if a stock costs $100 per share, you can invest $100. Some brokerages offer fractional shares, which means you can buy $50 worth of a $100 stock if you want.
What is the difference between a brokerage account and a retirement account?
A standard brokerage account has no contribution limits and no restrictions on withdrawals. A retirement account like a Roth IRA or Traditional IRA has annual contribution limits (currently $7,000 per year for most people) but offers tax advantages. Most beginners start with a standard brokerage account, then open a retirement account later.
Can I lose more money than I invested?
With stocks, no. The worst that can happen is the stock price falls to zero and you lose your entire investment. You cannot owe money to the brokerage. With certain advanced strategies like margin or options, you can lose more than you invested, but beginners should avoid these.
How long does it take to see results from investing?
Stock prices change every second the market is open, so you will see gains or losses when ready. However, meaningful results — real wealth building — typically take years or decades. Most successful investors hold stocks for at least five to ten years.
What if I want to sell my stock?
Log into your brokerage account, find the stock you own, enter how many shares you want to sell, and confirm. The sale executes when ready during market hours. The money from the sale appears in your account as cash, which you can withdraw or use to buy other stocks.