Where to Buy Stocks: Your Options and How They Work

You can buy stocks through a brokerage account, either online or with a broker who handles trades for you

A brokerage is a company that lets you buy and sell stocks. You open an account with them, deposit money, and then place orders to buy shares. Most people use an online brokerage — a website or app where you can trade yourself without talking to anyone. Some people use a traditional broker who takes your order over the phone or in person, though this usually costs more per trade.

The brokerage holds your shares in your account and keeps records of what you own. They also handle the paperwork with the stock exchange — the marketplace where the actual buying and selling happens. You do not interact with the exchange directly; the brokerage does that for you.

Key Takeaways

• Online brokerages like Fidelity, Charles Schwab, and E*TRADE let you buy stocks through a website or app, usually with no minimum deposit and no commission per trade.
• You need to open an account, verify your identity, and deposit money before you can place your first order.
• Different brokerages offer different tools, research resources, and account types, so comparing them before you open an account saves time later.
• You can also buy stocks through a workplace retirement plan like a 401(k), though the selection is usually limited to a set list of funds.

How to open an account at an online brokerage

The process is the same across most online brokerages. You visit their website, click a button to open an account, and answer questions about your name, address, Social Security number, and employment. The brokerage verifies your identity — usually instantly, sometimes within a day — and then you can log in.

Next, you link a bank account or transfer money in. Most brokerages let you link your checking or savings account and move money electronically. Once the money arrives in your brokerage account, you can place an order to buy stocks. The whole process usually takes less than an hour from start to finish.

You do not need a minimum amount to open an account at most online brokerages. Some brokerages have no minimum deposit at all; others ask for $500 or $1,000 to start. Check the brokerage's website for their current requirement before you begin.

Major online brokerages and what they offer

Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, and Webull are among the largest online brokerages in the United States. All of them let you buy individual stocks with no commission — meaning you do not pay a fee per trade. They all offer mobile apps, research tools, and educational content.

The differences lie in the details. Fidelity and Schwab are known for customer service and educational resources. E*TRADE and TD Ameritrade offer more advanced trading tools. Webull charges no account minimums and offers extended trading hours. Smaller brokerages like Robinhood focus on simplicity and a mobile-first experience. Compare a few based on what matters to you: ease of use, research tools, customer support, or advanced features.

All of these brokerages are regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Your money and shares are protected even if the brokerage fails, through the Securities Investor Protection Corporation (SIPC), which covers up to $500,000 per account.

Buying stocks through a workplace retirement plan

If your employer offers a 401(k) or similar retirement plan, you can buy stocks through that plan. You choose from a list of investments — usually mutual funds and target-date funds rather than individual stocks — and the plan deducts money from your paycheck to buy them. The money grows tax-deferred, meaning you do not pay taxes on gains until you withdraw it in retirement.

This route is simpler than opening a brokerage account because your employer handles the setup. However, you cannot buy individual stocks; you are limited to whatever the plan offers. If you want to buy a specific company's stock, you will need a separate brokerage account outside your retirement plan.

What happens after you place an order

When you place an order to buy 10 shares of a company at the current market price, the brokerage sends that order to the stock exchange. The exchange matches your order with someone selling those shares, and the trade happens in seconds. The shares appear in your account, and the money is deducted from your cash balance.

You own those shares until you sell them. You can hold them for days, years, or decades. While you own them, you may receive dividends — payments the company makes to shareholders — which the brokerage deposits into your account. You can reinvest those dividends to buy more shares, or leave them as cash.

Understanding account types and tax treatment

Most people open a taxable brokerage account, where you pay taxes on dividends and capital gains each year. When you sell a stock for more than you paid, that profit is a capital gain, and you owe tax on it. The tax rate depends on how long you held the stock: less than a year is short-term (taxed like regular income), and a year or more is long-term (taxed at a lower rate).

You can also open an Individual Retirement Account (IRA) at a brokerage. A traditional IRA lets you deduct contributions from your taxes now and pay taxes when you withdraw in retirement. A Roth IRA takes after-tax money now but lets you withdraw tax-free in retirement. Both have annual contribution limits set by the IRS — currently $7,000 for people under 50 — and rules about when you can withdraw without penalty.

A taxable account has no contribution limits and no withdrawal restrictions, so it is useful if you want to invest more than the IRA limit or need access to the money before retirement.

Comparing brokerages: what to look for

Before you open an account, think about what matters to you. If you plan to buy a few stocks and hold them for years, you mainly need a brokerage that is easy to use and has no commission. If you plan to trade frequently or use advanced strategies, you want research tools and charting software. If you are new to investing, look for educational resources and a simple interface.

Check whether the brokerage offers the stocks you want to buy. Most brokerages let you buy any stock listed on a major U.S. exchange, but some restrict certain types of trading. Look at the account minimums, mobile app quality, and customer support options. Many brokerages let you open a practice account with fake money so you can try the platform before depositing real funds.

Frequently Asked Questions

Do I need a lot of money to start buying stocks?

No. Most online brokerages have no minimum deposit, and stock prices vary widely — you can buy shares for under $10 or over $1,000 depending on the company. You can start with whatever amount you are comfortable investing, even $100.

Can I buy stocks without a brokerage account?

No. You must use a brokerage to buy stocks. The brokerage is the intermediary between you and the stock exchange. You cannot buy directly from the exchange or the company itself.

What is the difference between a full-service broker and an online brokerage?

A full-service broker is a person who takes your order over the phone or in person and usually charges a commission per trade. An online brokerage is a platform where you place orders yourself with no commission. Full-service brokers offer personalized advice; online brokerages do not.

Is my money safe at a brokerage?

Yes, as long as the brokerage is regulated by the SEC and FINRA. Your account is protected by SIPC up to $500,000 if the brokerage fails. Your shares are held in your name, so they belong to you even if the company goes out of business.

Can I buy stocks in a Roth IRA?

Yes. You can open a Roth IRA at any brokerage and buy individual stocks, mutual funds, or ETFs within it. Your contributions and gains grow tax-free, and you can withdraw them tax-free in retirement after age 59½.