How to open a share trading account

Information verified correct on October 22nd, 2016

Find out how to choose the best share trading account for your needs and start investing in Australian and international markets.

Online share trading allows you to buy and sell shares in publicly listed companies over the Internet. If you own an Internet-connected computer, smartphone or tablet, you can invest in shares and start trading to generate wealth and create a secure financial future.

But before you can invest in the share market you will need to open a share trading account with an online share trading platform. These platforms allow you to buy and sell shares in companies from the comfort of your own home, but it’s essential to compare your options before you choose a share trading account.

Open a share trading account today

Rates last updated October 22nd, 2016

Why trade shares online?

When they think of share trading, many people still imagine a crowded and chaotic trading room floor. The reality is that thanks to modern technology, the vast majority of share trading is done online. According to a report from Investment Trends, the number of active Australian online share investors grew from 595,000 in November 2014 to 620,000 in June 2015.

Trading shares online offers a secure and convenient way to manage your investments. You can place trades at a time and place convenient to you, while buying and selling shares offers the potential to benefit from share price increases and also enjoy an income from dividend payments.

There are of course risks attached to trading shares, including the potential to lose the money you invest, so it’s important to make sure you’re aware of those risks before you start trading.

See the share trading guide.

How do I choose an online share trading platform?

You will need to carefully consider your trading needs before you can decide on the right online share trading platform. Some of the issues to consider include:

  • Your trading knowledge and experience. Some online share trading platforms, for example CommSec and Westpac Online Investing, are designed to suit the needs of casual investors. Other trading platforms are specifically designed for experienced traders.
  • The markets you can access. Some share trading platforms only provide access to companies listed on the Australian Securities Exchange (ASX) while others will also allow you to place trades on international markets. Some trading platforms will also provide access to other investments, for example forex and contracts for difference (CFDs).
  • The fees involved. There are two main costs you need to consider when choosing a share trading platform: the brokerage fee and the ongoing fee. The brokerage fee applies each time you place a trade and is usually around $10-$25. Ongoing subscription fees are charged monthly and vary depending on the provider and the account features you select.
  • Trading resources. From educational tutorials to research and investment advice, check what tools a platform offers to help you make informed trading decisions.
  • Customer service. If you ever have a problem or need help with a trade, check to make sure you will be able to access prompt and helpful customer support.
How to open a share trading account

The exact process for opening a share trading account will vary depending on the share trading platform you select. However, you will generally need to complete the following steps when signing up:

  1. Provide your name. You will need to provide your full name and a valid form of photo ID.
  2. Provide your contact details. Next, supply your email address, phone number and residential address.
  3. Provide your bank account details. You’ll need to supply details of the account which will be used to finance your trades. Some share trading platforms will require you to open a cash management account with a specific financial institution before you can start trading.
  4. Provide your Tax File Number (TFN). It’s worth remembering that you will need to report any income you earn from shares at tax time.
  5. Choose your platform. Some providers offer a choice of share trading platforms, for example a free web-based platform for casual investors and a more complicated software package with a monthly subscription fee for experienced traders.
  6. Choose your membership. Some providers also offer a choice of membership tiers, each with a different level of features and a different ongoing fee.
  7. Wait while your application is assessed. This usually takes 1-2 business days.
  8. Start trading. Once your application has been approved you can log in to your account and start placing trades.
It’s also worth pointing out that it can be a lot easier to open a share trading account if you are an existing customer of the same financial institution; for example if you’re a CommBank customer opening a CommSec share trading account. In this case, you won’t have to provide your name, contact information or proof of ID.

Did you have these enquiries about opening a share trading account?

Do I need to be an Australian resident to sign up for a share trading account?

This depends on the share trading platform you select. Some are only open to Australian residents, while others accept customers from all over the world.

Is it free to sign up for a share trading account?

Some share trading platforms are completely free to sign up for, but other platforms that offer in-depth research and dynamic market data often attract monthly fees. However, remember that a brokerage fee will always apply when you place a trade.

Can I place trades over the phone?

Yes, many online share brokers will also offer a phone trading service.

Do the “Big Four Banks” all have their own share trading platforms?

Tim Falk

A freelance writer with a passion for the written word, Tim loves helping Australians find the right home loans and savings accounts. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

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