The Basic Steps to Buy Stock

To buy stock on Charles Schwab, you log into your account, search for the stock by ticker symbol or company name, enter how many shares you want, choose your order type, and submit. The whole process takes about two minutes once you know where to click. You do not need a minimum amount of money — Schwab lets you buy fractional shares, so you can invest $1 or $1,000.

The stock order goes to the market when ready if you place it during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays). If you place it outside those hours, it waits until the market opens the next trading day. Your shares settle in your account two business days after the trade, but you own them and see them in your portfolio right away.

Key Takeaways

  • You need a funded Charles Schwab brokerage account to buy stock; you cannot trade from a savings or checking account.
  • Stock trades on Schwab have no commission fee, but you pay the bid-ask spread (the difference between what buyers offer and what sellers ask).
  • Market orders execute when ready at the current price; limit orders let you set a maximum price you will pay and wait until that price is available.
  • Your shares settle two business days after you buy them, but you can sell them or use them as collateral before settlement is complete.

Opening and Funding a Brokerage Account

Before you can buy stock, you need a Charles Schwab brokerage account, which is different from a checking or savings account. You open one on Schwab's website by providing your name, address, Social Security number, and employment information. The account opens when ready, though Schwab may ask follow-up questions by mail or phone if your process needs review.

Once your account is open, you fund it by linking a bank account and transferring money in. You can also deposit a check by taking a photo on the Schwab mobile app, or wire money from your bank. Money transferred from your bank usually arrives within one to three business days. You do not have to fund the account all at once — you can add money whenever you want to buy stock.

Finding and Selecting a Stock to Buy

In your Schwab account, go to the "Trade" tab and select "Stocks." You will see a search box where you type either the company name (like "Apple") or the ticker symbol (like "AAPL"). Schwab shows you the stock's current price, the change from the previous close, and a chart of its price over time.

Click on the stock to open its detail page. Here you see the bid price (what buyers are offering to pay right now) and the ask price (what sellers are asking). You also see news, analyst ratings, and financial statements if you want to read more before you buy. Once you are ready, click "Trade" or "Buy" to move to the order screen.

Placing Your Stock Order

On the order screen, you enter the number of shares you want to buy. If you want to buy 10 shares of Apple at $150 per share, you type "10" in the quantity field. Schwab shows you the estimated total cost (10 shares × $150 = $1,500, plus any fees). You can also buy fractional shares — for example, you could type "10.5" to buy 10 and a half shares.

Next, you choose your order type. A market order buys the stock at whatever price it is trading at right now. This executes almost when ready during market hours. A limit order lets you set a maximum price — for example, "buy 10 shares of Apple only if the price drops to $145 or lower." The order waits until the stock hits that price, or expires at the end of the day if it never does. Most beginners use market orders because they execute right away.

Review the order summary, which shows the stock, quantity, order type, and estimated cost. Then click "Place Order" or "Submit." Schwab sends a confirmation to your email and shows the trade in your account history when ready.

Understanding Costs and Fees

Charles Schwab charges no commission — the flat fee per trade that older brokers used to charge. However, you still pay the bid-ask spread, which is the difference between what buyers offer and what sellers ask. If Apple's bid price is $150.00 and the ask price is $150.05, you pay $150.05 when you buy. That $0.05 difference is the spread, and it goes to the market maker, not to Schwab.

For most stocks, the spread is very small — a few cents. For stocks that trade less frequently or have lower prices, the spread can be wider. Schwab does not charge fees for holding stocks, and you do not pay anything to sell them later. If you buy mutual funds or exchange-traded funds (ETFs) through Schwab, some have transaction fees, but Schwab's own mutual funds and most ETFs do not.

What Happens After You Buy

Your shares appear in your account when ready after you place the order, even though the trade does not officially settle for two business days. During those two days, the money is reserved in your account and you cannot withdraw it. After two business days, the shares are fully yours and the cash is deducted from your account balance.

You can sell your shares before they settle, and you can use them as collateral for a margin loan (if you have a margin account). You also receive any dividends paid while you own the stock, and you can vote in shareholder meetings. Schwab sends you a tax form (Form 1099-B) at the end of the year showing all your stock sales and gains or losses.

Market Hours and Order Timing

The stock market is open Monday through Friday from 9:30 a.m. to 4 p.m. Eastern time. If you place a market order during these hours, it executes when ready at the current price. If you place an order outside market hours — for example, at 6 p.m. or on a Saturday — it waits until the market opens the next trading day and executes at the opening price (or close to it).

Schwab also offers extended-hours trading, which lets you trade before the market opens (4 a.m. to 9:30 a.m.) and after it closes (4 p.m. to 8 p.m.). Extended-hours trading has wider spreads and lower volume, so prices can move more sharply and your order may not fill at the price you expect. Most beginners stick to regular market hours.

Frequently Asked Questions

Do I need a minimum amount of money to open a Schwab brokerage account?

No. Schwab does not require a minimum deposit to open an account. You can open one with zero dollars and fund it later. Some Schwab accounts (like certain advisory accounts) do have minimums, but the standard brokerage account does not.

Can I buy stock with money that is still being transferred to my account?

No. You can only buy stock with money that has already arrived in your brokerage account. If you transfer money from your bank, wait for it to settle (usually one to three business days) before you place a stock order. If you try to buy before the money arrives, your order will be rejected.

What is the difference between a market order and a limit order?

A market order buys the stock at whatever price it is trading at right now and executes almost when ready. A limit order lets you set a maximum price and waits until the stock reaches that price — or expires if it never does. Market orders are faster but you do not control the exact price. Limit orders give you control but may never fill.

Can I cancel a stock order after I place it?

Yes, but only if it has not filled yet. If you place a market order during market hours, it usually fills within seconds, so you cannot cancel it. If you place a limit order that is waiting for a price, you can cancel it anytime before it fills. Go to your "Orders" page in Schwab and click "Cancel" next to the order.

How do I know if my stock order went through?

Schwab sends you an email confirmation when ready after your order fills, and the trade shows up in your account history and portfolio. You can also check your "Orders" page in your account to see the status of any pending or filled orders.