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Last updated on September 11th, 2022 at 11:20 am
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Thinking about investing in stocks, but aren’t sure where to start? You need a stock account first. But, how much money do you need to open a stock account?
The truth is, you don’t need any minimum amount of money to open an account with most major online brokers (Robinhood, Fidelity, etc.). However, you will need funds to cover the price of the stocks you’re purchasing.
Some platforms do require a minimum balance to be maintained in your account at all times so be sure and read the fine print when opening a bee brokerage account.
In this article I’m going to help you understand the costs associated with opening a stock account and provide you with some of my favorite online brokers that are ideal for beginners.
If you’re just getting into stock investing, then keep reading!
How Much Money Do You Need To Open A Stock Account?
If you are new to investing in the stock market, you probably have questions about how to get started and how much to invest.
Deciding how much money you need to open an investment account in the stock market largely depends on your investment goals and the strategy you plan to use.
Initially, you can get started investing in the stock market with as little as a few dollars.
Exactly how much you will want to start with depends on what type of stock broker you are using. I will cover the two main types of brokers below.
Traditional Broker-Assisted Investing
If you decide to open an investment account through a professional stock broker, you can expect to be required to have a higher minimum account balance than a self-directed account.
Some brokers require investors to maintain $5,000 to $10,000 in their account. Charles Schwab, for example, requires a minimum $1,000 balance for customers opening a brokerage account.
The minimum balance may be waived for customers who also open a companion checking account or establish a monthly transfer of at least $100 through direct deposit.
Investing Through An Online Broker
Choosing self-directed investing via an online broker over investing with a traditional firm can reduce your start-up costs substantially.
Online brokerage accounts are widely available through companies such as
- TD Ameritrade
… and more! You can open a stock investment account with no money and most of the online brokers have no minimum deposit requirements. That means you could open an account and start trading with just a couple dollars (although you wouldn’t be buying much stock with that amount.
With these types of accounts, you conduct your own stock investment research, fund your account and then place your own trades through the trade platform provided with your account.
The best part is, most, if not all of these platforms charge zero commissions!
Which Trading Platform is Best for Beginners?
As a beginner investor, you may be working with limited funds, and you may need a bit more guidance getting started.
That means you might benefit from a broker with no account minimum and more educational resources. Here’s a list of brokers to consider.
A simple-to-use investing experience and commission-free trading are essentials for beginner investors, and Robinhood delivers on all these fronts, and more.
- FEES: $0 for stocks, ETFs, options, and cryptocurrencies
- ACCOUNT MINIMUM: $0
Fidelity combines $0 commissions, top-notch research, and an excellent mobile app, all in a simple stock trading platform for beginners. With $0 account minimums and zero-expense-ratio index and mutual funds, this is one of the most affordable brokers.
- FEES: $0 stock trades
- ACCOUNT MINIMUM: $0
A clear standout with a modern experience. Beginners and long-term investors may find the most value, particularly those interested in stocks, cryptocurrencies, ETFs, and buying fractional shares.
- FEES: $0 for stocks, 1.25% for cryptocurrencies
- ACCOUNT MINIMUM: $1
Merrill Edge sports $0 stock and ETF trades, strong research offerings, and fantastic customer support. It’s a solid option for all investors, and particularly attractive for Bank of America customers.
- FEES: $0 stock and ETF trades
- ACCOUNT MINIMUM: $0
Choosing An Investment Amount
Deciding how much money to start investing with is entirely up to you.
If you have a sum of money you wish to grow for the future, it might make sense to invest that money in a combination of stocks, bonds and mutual funds.
Even if you don’t have significant disposable income, you can still invest.
Fund your account with $10, $50 or $100 as your budget allows, and purchase the shares you wish to own when you can afford them.
Additional Stock Trading Fees
Weigh the options carefully whether you decide to use an investment adviser or conduct your own trading through a self-directed brokerage account.
In addition to commissions for buying and selling stocks, some brokers charge a broker fee to assist you with trades and make stock recommendations.
Others may also charge commission based on the profitability of trades made on your behalf.
In addition, some brokerages charge monthly account maintenance fees and transaction fees for calling customer service or requesting a copy of your account statement.
So…how much money do you need to open a stock account.
The answer depends on the route you take. However, I’d recommend opening an account with an online broker (I use Robinhood, TD Ameritrade,and Firstrade).
Most of these platforms charge nothing to open an account and zero commissions on trades, which makes them ideal for inexperienced investors who are just starting out!