In some cases, you can actually open a self-service brokerage account with no deposit. With this setup, you only need enough money to purchase company shares. Other banks require a minimum deposit, such as $500 or $1,000, to ensure you have enough funds to place orders.
A number of brokerage services offer no-deposit investment accounts, as of 2015. In a comparison of top online firms, StockBrokers.com reported TD Ameritrade, Merrill Edge and OptionsHouse among those with no minimum deposit. Given that some penny stocks trade below $1, you could begin buying stocks with as little as a dollar. However, typical transactions range from $4.95 to $9.95 with discount brokers, which means you need enough money to cover transaction costs. Therefore, taking the time to open and manage an account for very little investment is impractical.
Small Deposit Accounts
Other brokers require a minimum deposit so that you can actively trade after opening the account. The process of reviewing and approving applications, and maintaining accounts, is expensive for a broker. If you open an account and conduct few, if any, trades, your business results in a net loss. E-Trade and Fidelity are online brokers that do have minimum deposit requirements, according to StockBrokers.com. Their minimums range from $500 to $2,500. These amounts allow you to cover transaction costs while purchasing a modest amount of shares in some companies.
Even though minimum deposits typically range from $500 to $2,500 with many brokers, even a few hundred dollars is practical to start. A $500 deposit gives you a low-risk opportunity to learn the ropes of investing before adding to your account over time. It is possible to find no-fee trade opportunities, which means even with a small fund, you earn money with any stock price gains. Wells Fargo offers customers who acquired its PMA package on or before April 1, 2013, 100 free trades per year through a linked WellsTrade investment account. PMA customers who signed up after that date earned a discounted rate of $6.95 per transaction.