Where to Buy Stocks and Start Investing
You can buy stocks through a brokerage account, either online or with a financial advisor
To own stocks, you need an account at a brokerage — a company licensed to buy and sell securities on your behalf. Most individual investors open an account online with a retail brokerage like Fidelity, Charles Schwab, E*TRADE, or Robinhood. You fund the account with your own money, place an order to buy a specific stock, and the brokerage executes the trade. The stocks then sit in your account until you sell them.
You can also buy stocks through a financial advisor or a full-service brokerage, where a person helps you choose what to buy. This route costs more in fees but may suit you if you want guidance. For most people starting out, an online brokerage is simpler and cheaper.
Key Takeaways
- You need a brokerage account to buy stocks; online brokerages like Fidelity and Charles Schwab are the most common choice for individual investors.
- Most online brokerages no longer charge per-trade commissions, but they may charge account fees or margin interest if you borrow money.
- You can open an account in minutes with a Social Security number, proof of address, and a bank account to fund it.
- A taxable brokerage account lets you buy and sell anytime, while retirement accounts like IRAs and 401(k)s offer tax advantages but restrict withdrawals.
- Stocks bought through a brokerage are held in your name or in the brokerage's name on your behalf, and are protected if the brokerage fails.
Online brokerages versus financial advisors
An online brokerage is a platform where you make all the decisions yourself. You search for a stock, decide how many shares to buy, and place the order. The brokerage charges little or nothing per trade — most major ones eliminated per-trade commissions years ago — though some charge monthly account fees or interest if you borrow money to invest. Examples include Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, Interactive Brokers, and Robinhood.
A financial advisor or full-service brokerage means a person recommends stocks or funds to you and executes trades on your behalf. You pay for this guidance through higher fees — often a percentage of the money you invest, or a flat fee per year. This route makes sense if you want someone to help you build a strategy, but it costs more and you have less control over individual trades.
A middle ground is a robo-advisor — an automated service that builds and manages a portfolio for you based on your goals and risk tolerance. Robo-advisors like Betterment, Wealthfront, and Vanguard Personal Advisor Services charge lower fees than human advisors but more than a bare-bones online brokerage. They are useful if you want a hands-off approach but do not want to pay for a person.
What you need to open an account
Opening an account at an online brokerage takes 10 to 20 minutes. You will need your Social Security number, a valid photo ID, proof of your current address (usually a recent utility bill or bank statement), and a bank account to link for deposits and withdrawals. Some brokerages also ask for your employment status and annual income, though this is mainly for compliance.
Once your account is open, you fund it by transferring money from your bank. Most brokerages let you link your bank account directly so transfers happen in one to three business days. Some also accept wire transfers or checks, though these are slower. You do not need a minimum amount to open the account, but some brokerages have a minimum deposit to start trading — this varies from zero to several thousand dollars depending on the firm.
After your money arrives, you can place your first trade immediately. You search for the stock by ticker symbol (like AAPL for Apple or MSFT for Microsoft), decide how many shares to buy, and confirm the order. The trade usually executes within seconds during market hours.
Taxable accounts versus retirement accounts
A taxable brokerage account is the simplest type. You can buy and sell stocks anytime, withdraw your money anytime, and there are no contribution limits. The tradeoff is that you pay income tax on any gains when you sell, and you may owe tax on dividends each year even if you do not sell. This account makes sense if you are investing money you might need in the next few years.
A retirement account — like a Traditional IRA, Roth IRA, or 401(k) — offers tax advantages but restricts when you can withdraw. In a Traditional IRA or 401(k), you may deduct contributions from your taxable income, and you do not pay tax on gains until you withdraw in retirement. In a Roth IRA, you pay tax upfront but withdrawals in retirement are tax-free. All three have rules about when you can withdraw without penalty — usually age 59½ or later — and annual contribution limits that vary by account type and your income.
Most people should prioritize retirement accounts if their employer offers a 401(k) with a match, because the match is assistance programs. After that, a Roth IRA is often the next step. A taxable account makes sense once you have maxed out retirement accounts or need to invest money you will use before retirement.
How stocks are held and protected
When you buy a stock through a brokerage, the shares are held in an account registered in your name. The brokerage keeps the shares in a central depository — usually the Depository Trust Company (DTC) — but the account is yours. You own the stock; the brokerage is just the custodian.
If your brokerage fails or goes out of business, your stocks are protected by the Securities Investor Protection Corporation (SIPC), a nonprofit created by Congress. SIPC covers up to $500,000 per account per brokerage, including up to $250,000 in cash. This means if Fidelity or Charles Schwab were to collapse, your stocks would be returned to you or transferred to another brokerage. SIPC does not protect you against losses from bad investment choices — only against the brokerage itself failing.
Some brokerages also carry additional insurance beyond SIPC coverage through private insurers. Check your brokerage's website to see what protection they offer.
Comparing major brokerages
| Brokerage | Commission per trade | Account minimum | Best for |
|---|---|---|---|
| Fidelity | $0 | $0 | Beginners; wide range of tools and research |
| Charles Schwab | $0 | $0 | Investors who want education and customer service |
| E*TRADE | $0 | $0 | Active traders; advanced charting tools |
| Robinhood | $0 | $0 | Mobile-first investors; simple interface |
| Interactive Brokers | $0 (for stocks) | $0 | Experienced investors; lowest fees overall |
| Vanguard | $0 | $0 | Long-term investors; strong mutual fund selection |
All major brokerages charge zero commission per stock trade. The real differences are in account minimums, research tools, customer service quality, and whether they offer retirement accounts. Fidelity and Charles Schwab are popular with beginners because they offer strong educational resources and customer support. Robinhood appeals to mobile users who want a simple app. Vanguard is known for low-cost funds. Interactive Brokers suits experienced traders who want the lowest overall costs.
Before choosing a brokerage, think about what matters most to you: ease of use, research tools, customer service, or lowest fees. Most investors do well with any of the major names; the differences become meaningful only if you trade frequently or have specific needs like options trading or international stocks.
Getting your first stock and next steps
Once your account is funded, buying your first stock takes three steps. First, search for the company by name or ticker symbol in your brokerage's search bar. Second, decide how many shares you want to buy — you can buy fractional shares at most brokerages now, so you do not need enough money for a whole share. Third, place the order and confirm it. The trade executes almost instantly during market hours (9:30 a.m. to 4 p.m. Eastern Time on weekdays).
After you buy, the stock appears in your account holdings. You can hold it forever, sell it anytime during market hours, or add to your position by buying more shares. Most beginners benefit from starting with a single stock or a small number of stocks they understand, then learning how to build a diversified portfolio over time. Keep in mind that stock prices move constantly, and the value of your holdings will go up and down — this is normal and expected.
Frequently Asked Questions
Do I need a lot of money to start investing in stocks?
No. Most brokerages have no account minimum and allow fractional shares, so you can start with as little as $1. However, starting with at least a few hundred dollars gives you room to build a small portfolio without transaction costs eating into your returns.
Can I lose more money than I invested?
With stocks alone, no — your loss is limited to what you put in. If a stock goes to zero, you lose your investment but nothing more. However, if you borrow money from your brokerage to buy stocks (called margin), you can lose more than your initial investment. Beginners should avoid margin until they understand the risks.
What is the difference between a brokerage account and a retirement account?
A brokerage account has no contribution limits and no withdrawal restrictions — you can take your money out anytime. A retirement account offers tax breaks but limits when you can withdraw without penalty, usually until age 59½. Most people use both: retirement accounts for long-term savings and a brokerage account for shorter-term goals.
How long does it take to buy a stock after I place an order?
During market hours (9:30 a.m. to 4 p.m. Eastern Time on weekdays), most stock trades execute within seconds. If you place an order after market hours or on a weekend, it will execute when the market opens the next trading day.
What happens to my stocks if my brokerage goes out of business?
SIPC protection ensures your stocks are returned to you or transferred to another brokerage. Your stocks are held separately from the brokerage's own assets, so they are yours even if the company fails. Coverage is up to $500,000 per account per brokerage.