You can buy stocks through an online brokerage — a company that holds your money and executes trades on your behalf
An online brokerage is a financial company that lets you open an account, deposit money, and buy or sell stocks through their website or app. You do not buy stocks directly from a company; you buy them through a broker who connects you to the market. The broker holds your cash and your shares, charges you fees (or sometimes charges nothing), and sends you confirmations and statements.
The main brokerages available to individual investors in the United States are firms like Fidelity, Charles Schwab, E*TRADE, Interactive Brokers, Webull, and Robinhood. Each one operates differently: some charge per trade, some charge nothing per trade but make money other ways, some require a minimum deposit, and some do not. Your choice depends on how much money you have to start, how often you plan to trade, what tools you want, and whether you care about customer service by phone.
Before you open an account anywhere, you need a Social Security number, a valid ID, proof of address (usually a recent utility bill or bank statement), and enough money to meet the broker's minimum deposit — which ranges from zero to several thousand dollars depending on the firm.
Key Takeaways
- Online brokerages are companies that hold your money and execute stock trades; you cannot buy stocks without going through a broker.
- Most major brokerages now charge zero dollars per trade, but they differ in minimum deposits, account features, and how they make their money.
- You will need a Social Security number, valid ID, proof of address, and a bank account to fund your brokerage account.
- Opening an account takes 10 to 20 minutes online, and you can start buying stocks the same day or within one business day depending on how you fund the account.
- Different brokers appeal to different investors: some focus on beginners, some on active traders, some on low fees, and some on research tools.
How to choose between major brokerages
The biggest names — Fidelity, Charles Schwab, E*TRADE, and Interactive Brokers — all charge zero per-trade commissions and have no account minimums or very low ones. The real differences are in the details. Fidelity and Schwab are known for strong customer service and educational resources. E*TRADE offers more advanced trading tools. Interactive Brokers appeals to active traders who want low margin rates and access to international markets. Robinhood and Webull market themselves to younger, mobile-first investors and offer fractional shares (meaning you can buy a piece of a stock rather than a whole share).
If you are new to stocks, look for a broker with a good website tutorial, a paper trading feature (a practice account with fake money), and customer support by phone. If you plan to trade frequently, prioritize low margin rates and fast order execution. If you want to invest small amounts, choose a broker that offers fractional shares. If you want to research stocks deeply before buying, check whether the broker includes research tools or charges extra for them.
Read the broker's fee schedule carefully. Even though per-trade commissions are gone, brokers still charge for some things: wire transfers out of your account, margin interest if you borrow money, inactivity fees (rare now), or premium subscriptions for advanced tools. Some brokers also make money by lending out your shares to short-sellers or by routing your orders to market makers who pay them for the flow.
What happens when you open an account
Opening an account online takes 10 to 20 minutes. You will enter your name, address, Social Security number, date of birth, employment status, and annual income. The broker runs a background check and verifies your identity. Most brokers now use instant verification through your bank or ID, so you can be approved within minutes. A few still require you to upload documents, which takes a day or two.
Once approved, you link a bank account to fund your brokerage account. You can transfer money by ACH (automatic clearing house), which is free but takes three to five business days, or by wire transfer, which is faster but may cost $10 to $25. Some brokers let you deposit a check by phone or mail, which is slower. Do not send cash.
After your money arrives in your brokerage account, you can place an order to buy a stock immediately. The order goes through during market hours (9:30 a.m. to 4 p.m. Eastern time, Monday through Friday). If you place an order after hours or on a weekend, it waits until the market opens the next trading day.
Understanding account types and tax treatment
Most people start with a taxable brokerage account, which has no contribution limits and no tax advantages. You pay capital gains tax on profits when you sell, and you pay tax on dividends each year. This is the simplest account type and the one you should open first if you are just starting out.
If you are saving for retirement, you may also open an IRA (Individual Retirement Account) through the same broker. A traditional IRA lets you deduct contributions from your taxes now and pay tax later when you withdraw. A Roth IRA lets you contribute after-tax money now and withdraw tax-free later. IRAs have annual contribution limits (currently $7,000 for people under 50) and rules about when you can withdraw without penalty. Most brokers let you open both a taxable account and an IRA at the same time.
If you work for a company that offers a 401(k), that is a separate retirement account run by your employer, not by a brokerage. You cannot buy individual stocks in a 401(k) unless your employer's plan includes a brokerage window, which is rare.
How to place your first stock order
Once your account is funded, you log in and look for a "Buy" or "Trade" button. You enter the stock's ticker symbol (a one- to five-letter code like AAPL for Apple or MSFT for Microsoft). The broker shows you the current price and lets you choose how many shares to buy. You review the order, confirm it, and it executes immediately if the market is open.
Most brokers default to a market order, which buys the stock at whatever price it is trading at right now. This is the simplest and fastest way to buy. A limit order lets you set a maximum price you are willing to pay; the order only executes if the stock drops to that price or lower. Limit orders are useful if you want to avoid overpaying, but they may not execute at all if the price never reaches your limit.
After your order executes, the broker sends you a confirmation showing the number of shares, the price per share, the total cost, and any fees. Your shares appear in your account immediately, and you own them. You can sell them anytime the market is open, or hold them forever.
Fees, minimums, and account requirements across brokers
| Broker | Per-Trade Commission | Minimum Deposit | Fractional Shares | Notable Feature |
|---|---|---|---|---|
| Fidelity | $0 | $0 | Yes | Strong customer service, research tools included |
| Charles Schwab | $0 | $0 | Yes | Educational resources, active trader tools |
| E*TRADE | $0 | $0 | Yes | Advanced charting and analysis tools |
| Interactive Brokers | $0 | $0 (but $500 recommended) | Yes | Lowest margin rates, international stocks |
| Robinhood | $0 | $0 | Yes | Mobile-first, options trading, crypto |
| Webull | $0 | $0 | Yes | Extended trading hours, options trading |
All the brokers listed above charge zero per-trade commissions for stocks and ETFs. The real cost differences come from other fees: wire transfer fees ($10 to $25), margin interest rates (if you borrow money), and premium subscriptions for advanced tools. Some brokers charge nothing for anything; others charge for research data or real-time quotes. Read the fee schedule on each broker's website before you open an account.
What to watch out for when choosing a broker
Make sure the broker is registered with the SEC (Securities and Exchange Commission) and is a member of FINRA (Financial Industry Regulatory Authority). You can check this on the SEC website or FINRA's BrokerCheck tool. This protects you if the broker goes out of business; your cash and stocks are held in a separate account and are not at risk.
Avoid brokers that advertise heavily on social media or promise you will get rich quick. Legitimate brokers do not promise returns. Be cautious of brokers that make it very easy to trade options or use margin (borrowed money) without explaining the risks; these features can wipe out your account fast if you do not know what you are doing.
Check the broker's website for reviews on independent sites like Trustpilot or the Better Business Bureau. Look for complaints about slow customer service, difficulty withdrawing money, or technical problems during market crashes. No broker is perfect, but you want one where problems are rare and customer service responds quickly.
Frequently Asked Questions
Do I need a lot of money to start buying stocks?
No. Most brokers have no minimum deposit, and many offer fractional shares, so you can buy a piece of an expensive stock for $1 or $10. You can start with whatever amount you can afford to lose, because stock prices go up and down.
Can I buy stocks on my phone?
Yes. Every major broker has a mobile app for iPhone and Android. You can open an account, fund it, and place orders entirely on your phone. The app works the same way as the website.
How long does it take for my money to arrive in my brokerage account?
ACH transfers (free) take three to five business days. Wire transfers take one to two business days but may cost $10 to $25. Some brokers offer instant transfers if you link your bank account through a verification service, which can take minutes.
What if I want to move my stocks to a different broker?
You can transfer your account to another broker through a process called ACAT (Automated Customer Account Transfer). It takes five to ten business days and is usually free. The receiving broker handles most of the paperwork.
Is it safe to keep my money in a brokerage account?
Yes, if the broker is registered with the SEC and is a FINRA member. Your cash is held separately from the broker's money and is protected by SIPC (Securities Investor Protection Corporation) up to $500,000 per account. Your stocks are yours; the broker just holds them for you.