You can buy ETFs through a brokerage account at most financial institutions that offer investment services

An exchange-traded fund (ETF) is bought and sold like a stock — through a brokerage account with a bank, investment firm, or online broker. You open an account, fund it with money, search for the ETF by its ticker symbol, and place an order during market hours. The ETF shares settle in your account within two business days. There is no separate application process for ETFs themselves; you simply need a brokerage account that permits stock trading.

The main choice is which brokerage to use. Different brokers charge different fees, offer different research tools, and have different account minimums. Some require you to visit a branch; others operate entirely online. The right choice depends on how much you plan to invest, how often you trade, and whether you want human guidance or prefer to manage your account yourself.

Key Takeaways

  • ETFs are bought through a brokerage account at a bank, investment firm, or online broker using the ETF's ticker symbol.
  • Most online brokers now charge zero commission per trade, though some still charge fees for certain types of accounts or services.
  • You can hold ETFs in a regular taxable brokerage account, a retirement account like an IRA, or a 401(k) if your employer's plan offers them.
  • Opening an account typically takes 10 to 15 minutes online and requires proof of identity, Social Security number, and a funding method.
  • Market hours are 9:30 a.m. to 4 p.m. Eastern time on weekdays; orders placed outside those hours execute at the next market open.

Online brokers with low or no trading fees

Most major online brokers — including Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, Robinhood, and Webull — charge zero commission to buy or sell ETFs. This is the standard now. The difference between them lies in account minimums, research tools, customer service availability, and whether they offer retirement accounts.

Fidelity and Charles Schwab have no account minimum and offer extensive educational resources and research. E*TRADE and TD Ameritrade also have no minimum and provide detailed charting and analysis tools. Robinhood and Webull appeal to newer investors with simple mobile interfaces but offer less research depth. All of these allow you to open an account online in minutes and fund it by bank transfer or debit card.

Some brokers still charge per-trade fees, typically $5 to $10 per ETF purchase. These are usually older firms or those targeting professional traders. Unless you have a specific reason to use them, the zero-commission brokers are the better choice for most people buying ETFs.

Banks and full-service investment firms

You can also buy ETFs through your bank's brokerage service or through a full-service firm like Merrill Lynch, Morgan Stanley, or UBS. These typically charge per-trade commissions ($5 to $25 per trade) and may require higher account minimums ($1,000 to $25,000 or more). The advantage is that you can work with a financial advisor in person or by phone, and your brokerage account may be integrated with your checking and savings accounts.

Full-service firms make sense if you want ongoing advice, prefer face-to-face meetings, or already have other accounts with them. For people who want to buy ETFs on their own and keep costs low, online brokers are usually the better option.

Types of accounts that hold ETFs

ETFs can be held in several types of accounts. A taxable brokerage account has no contribution limits and no restrictions on when you withdraw money, but you pay capital gains tax when you sell at a profit. An Individual Retirement Account (IRA) — either traditional or Roth — lets you hold ETFs with tax advantages, though contribution limits apply ($7,000 per year for most people in 2024, though this varies by year). A 401(k) offered by your employer may include ETF options, though many offer mutual funds instead.

Most people starting out open a taxable brokerage account first because there are no limits and no paperwork beyond the account opening itself. If you have access to a 401(k) or IRA, those are often better for long-term investing because of the tax benefits, but you can hold ETFs in any of these account types.

How to open an account and place your first order

Opening a brokerage account takes about 10 to 15 minutes online. You will need your Social Security number, a government-issued ID, your current address, and employment information. You will also need a way to fund the account — a bank account for transfers, a debit card, or sometimes a check. Most brokers let you start with as little as $1 to $100, though some have no minimum at all.

Once your account is open and funded, search for the ETF by its ticker symbol (a short code like SPY, VOO, or QQQ). The broker will show you the current price, the bid-ask spread, and recent performance. Enter the number of shares you want to buy and confirm the order. If you place the order during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), it executes immediately at or near the displayed price. Orders placed after hours or on weekends execute at the next market open.

Understanding bid-ask spreads and order types

When you buy an ETF, you will see two prices: the bid (what buyers are willing to pay) and the ask (what sellers are asking). The difference is the bid-ask spread. For popular ETFs like SPY or VOO, the spread is usually just a penny or two per share. For less-traded ETFs, it can be wider, meaning you pay more to buy and receive less when you sell.

Most brokers default to a market order, which buys at the current market price immediately. A limit order lets you set a maximum price you are willing to pay; the order only executes if the price drops to that level or below. Limit orders are useful if you want to avoid paying more than a certain amount, but they may not execute at all if the price never reaches your limit.

Fees beyond the per-trade commission

Most zero-commission brokers do not charge account maintenance fees, but some charge for specific services. Wire transfers out of your account may cost $15 to $25. Some brokers charge for margin accounts (borrowing money to invest) or for certain types of retirement accounts. A few charge inactivity fees if you do not trade for a set period, though this is becoming rare.

Read the broker's fee schedule before opening an account. The difference between brokers is usually small for someone buying and holding ETFs, but it adds up over time. A broker with no account fee and no wire transfer fee will cost you less than one charging $25 per wire, especially if you plan to move money in and out regularly.

Frequently Asked Questions

Can I buy ETFs in a retirement account like an IRA?

Yes. Most brokers let you open a traditional or Roth IRA and hold ETFs inside it. The tax treatment depends on the IRA type — traditional IRAs offer a tax deduction when you contribute, while Roth IRAs let you withdraw money tax-free in retirement. Contribution limits apply: $7,000 per year for most people in 2024, though the limit changes by year and age.

What is the minimum amount I need to invest to buy an ETF?

Most brokers have no account minimum and no minimum purchase amount. You can buy a single share of an ETF if you want. Some ETFs cost $50 to $400 per share, so your first purchase might be $50 to $400 depending on which ETF you choose. A few brokers still require $500 to $1,000 to open an account, but this is uncommon now.

Can I buy ETFs outside of market hours?

You can place an order anytime, but it will not execute until the market is open. Orders placed after 4 p.m. Eastern time or on weekends execute at the next market open, usually 9:30 a.m. the next trading day. The price may be different from what you saw when you placed the order because market conditions change overnight.

Do I need a financial advisor to buy ETFs?

No. You can open a brokerage account and buy ETFs entirely on your own through an online broker. Many people do this successfully. If you want guidance on which ETFs to choose or how to build a portfolio, you can work with a financial advisor, but it is not required to buy and hold ETFs.

What happens if my broker goes out of business?

Your ETFs and cash are protected by the Securities Investor Protection Corporation (SIPC), which covers up to $500,000 per account at a failed brokerage. This protection applies to most major brokers. In practice, if a large broker fails, another firm usually takes over customer accounts. Choosing a well-established broker with a long history reduces this risk to near zero.