Where to Buy Stocks: Your Options and How They Work

You can buy stocks through a brokerage account, either online or through a financial advisor

To own stocks, you need an account with a brokerage — a company licensed to buy and sell securities on your behalf. Most individual investors use an online brokerage because they offer low fees, simple interfaces, and the ability to trade whenever markets are open. You can also work with a financial advisor or a traditional bank, though these routes typically cost more. The brokerage holds your stocks in your account, keeps track of your ownership, and handles the paperwork when you buy or sell.

Before you choose where to buy, you need to decide what type of account to open. A regular taxable brokerage account has no contribution limits and no restrictions on when you withdraw money — you simply pay taxes on any gains when you sell. A retirement account like an IRA or 401(k) has tax advantages but limits how much you can contribute each year and when you can withdraw without penalty. Most people start with a taxable account if they are new to investing, then add a retirement account later.

Key Takeaways

• Online brokerages like Fidelity, Charles Schwab, and E*TRADE let you open an account in minutes and buy stocks with no account minimum at many firms.
• You will need to provide your Social Security number, proof of address, and bank details to fund your account, which takes one to three business days to verify.
• Stock prices move during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), and your order executes at the price available when your broker receives it.
• Financial advisors and banks offer personal guidance but charge fees that can be significantly higher than online brokerages.
• You can hold the same stocks in multiple account types — a taxable brokerage account and an IRA, for example — to take advantage of different tax rules.

Online brokerages: the most common choice for individual investors

An online brokerage is a website or app where you open an account, deposit money, and place orders to buy or sell stocks yourself. The major firms — Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, Webull, and Interactive Brokers — all offer similar core services: real-time stock quotes, order placement, account statements, and tax documents at year-end. Most charge no commission on stock trades, meaning you pay nothing to the brokerage when you buy or sell. Some charge a small fee to transfer money out of the account or to close it early.

The differences between brokerages lie in their research tools, educational resources, mobile app quality, and customer service availability. Fidelity and Charles Schwab are known for extensive research and educational content aimed at beginners. E*TRADE emphasizes its mobile app and trading tools. Webull and Interactive Brokers appeal to active traders who want advanced charting and lower costs on certain order types. Most brokerages offer paper trading — a practice account with fake money — so you can learn how to place orders without risking real cash.

Opening an account takes 10 to 15 minutes online. You will provide your name, address, Social Security number, employment information, and bank details. The brokerage verifies your identity and then opens your account, usually within one business day. Funding the account — transferring money from your bank — takes one to three business days because the brokerage and your bank must confirm the transfer. Once your money is there, you can place your first order immediately.

How to place an order and what happens next

Once your account is funded, you search for a stock by its ticker symbol (a one- to five-letter code like AAPL for Apple or MSFT for Microsoft) and enter how many shares you want to buy. You then choose an order type. A market order buys the stock at whatever price is available right now — it executes almost instantly during market hours but the exact price may be slightly different from what you saw on screen. A limit order lets you set a maximum price you are willing to pay; it only executes if the stock reaches that price or lower, but it may never execute at all if the price never drops to your limit.

Your order reaches the stock exchange 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. Once your order executes, the brokerage deducts the cost from your account balance and adds the shares to your holdings. You own the stock immediately, even though the settlement — the final transfer of ownership — takes two business days to complete. During those two days, you can still sell the stock, but you cannot withdraw the cash until settlement is done.

Your brokerage sends you a confirmation email with the order details: the stock symbol, number of shares, price per share, and total cost including any fees. You can see your holdings and their current value in your account dashboard at any time. At the end of each quarter and year, the brokerage sends statements showing all your transactions and the current value of your account.

Financial advisors and traditional banks: higher cost, personal guidance

A financial advisor — either an independent advisor or one employed by a bank or investment firm — can help you choose which stocks to buy and manage your account for you. This is useful if you want personalized advice, do not want to research stocks yourself, or have a large amount of money to invest. The trade-off is cost: advisors typically charge between 0.5% and 2% of your account balance each year, meaning a $100,000 account costs $500 to $2,000 annually in fees. Some advisors charge a flat fee per year instead, which may be $1,000 to $5,000 depending on the complexity of your situation.

Banks also offer brokerage services, usually through their investment or wealth management division. Bank brokerages often have higher fees than online brokerages and may push you toward their own products. However, if you already have a checking account at the bank and value the convenience of managing everything in one place, a bank brokerage may be worth the extra cost.

Before you hire an advisor, ask whether they are a fiduciary — meaning they are legally required to act in your best interest, not their own. Not all advisors are fiduciaries; some are only required to recommend "suitable" investments, which may not be the best choice for you. Fiduciaries must disclose all their fees in writing before you hire them.

Robo-advisors: automated investing at lower cost

A robo-advisor is a service that uses software to build and manage a portfolio of stocks and other investments for you based on your goals and risk tolerance. Firms like Vanguard Personal Advisor Services, Betterment, Wealthfront, and M1 Finance offer robo-advisory services. They typically charge 0.25% to 0.50% of your account balance per year — much less than a human advisor — and many have low or no account minimums.

Robo-advisors ask you a series of questions about your age, income, goals, and how comfortable you are with investment risk. Based on your answers, they recommend a mix of stocks and bonds, then automatically buy and rebalance your portfolio to maintain that mix. Some robo-advisors also offer access to a human advisor if you want to discuss your strategy. This approach works well if you want a hands-off investment experience and do not need personalized financial planning.

Employer retirement plans: stocks through your job

If your employer offers a 401(k) or similar retirement plan, you can buy stocks through that plan by choosing stock funds or individual stocks from the plan's investment menu. Your employer may match a portion of your contributions, which is essentially assistance programs. The plan administrator — usually a company like Fidelity, Vanguard, or Schwab — handles the buying and selling on your behalf.

The advantage of an employer plan is the tax break: contributions reduce your taxable income for the year, and your money grows tax-free until you withdraw it in retirement. The disadvantage is limited choice — you can only invest in the funds or stocks the plan offers, not any stock you want. Many employer plans also charge higher fees than online brokerages, though this varies widely.

IRAs: retirement accounts for stocks outside your job

An Individual Retirement Account (IRA) is a tax-advantaged account you open on your own, separate from your job. You can hold stocks in an IRA just as you would in a regular brokerage account. A Traditional IRA lets you deduct contributions from your taxes in the year you make them, and you pay taxes on withdrawals in retirement. A Roth IRA takes contributions after taxes, but withdrawals in retirement are tax-free.

You can open an IRA at any online brokerage — Fidelity, Charles Schwab, Vanguard, and others all offer them. The contribution limit changes each year; for 2024 it is $7,000 for people under 50 and $8,000 for people 50 and older. You can contribute only if you have earned income from a job that year. Once the money is in your IRA, you can buy any stock available through your brokerage, just as you would in a regular account.

Frequently Asked Questions

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

No. Most online brokerages have no account minimum, meaning you can open an account with $1 or $100. Some stocks cost less than $10 per share, so you can buy a single share with very little money. However, if you plan to buy multiple stocks, starting with at least a few hundred dollars lets you diversify without paying too much in fees.

Can I buy stocks on my phone?

Yes. Every major online brokerage has a mobile app where you can view your account, check stock prices, and place orders. The app works the same way as the website — you search for a stock by ticker symbol, choose how many shares to buy, and confirm your order. Some people find the mobile app easier to use than the website.

What happens if the brokerage goes out of business?

Your stocks are protected. Brokerages are required to hold customer securities separately from their own assets, so even if the brokerage fails, your stocks belong to you. The Securities Investor Protection Corporation (SIPC) insures cash in your account up to $250,000 if the brokerage fails, though this rarely happens with large, established firms.

Can I buy stocks without a brokerage account?

No. You must use a licensed brokerage to buy stocks on a public exchange. Some companies offer direct stock purchase plans that let you buy shares without a brokerage, but these are limited to that one company's stock and are less convenient than using a brokerage.

Should I buy stocks through my bank?

Only if you value convenience over cost. Bank brokerages typically charge higher fees and offer fewer research tools than online brokerages. If you are comfortable managing your money in two places, an online brokerage will almost always be cheaper.