Your brokerage account is open, but you cannot trade until you add money. Understanding the different funding methods, their timelines, and the rules around fund availability will help you start trading without delays or surprises.
Funding Methods Compared
Most brokers offer several ways to deposit money. Here are the most common options:
ACH Transfer (Electronic Bank Transfer)
The most popular method for funding brokerage accounts. You link your bank account and transfer money electronically.
- Cost: Usually free
- Time to settle: 1-3 business days
- Limits: Typically $50,000-$250,000 per transfer
- Best for: Regular deposits, most traders
Wire Transfer
Direct bank-to-bank transfer that settles same day.
- Cost: $15-$30 from your bank (broker usually free)
- Time to settle: Same day if sent early
- Limits: Usually unlimited
- Best for: Large deposits, urgent funding needs
Check Deposit
Mail a check or use mobile deposit if available.
- Cost: Free
- Time to settle: 3-7 business days
- Limits: Varies by broker
- Best for: Occasional deposits, those without online banking
Account Transfer (ACATS)
Move assets from another brokerage account.
- Cost: $50-$75 from old broker (new broker often reimburses)
- Time to settle: 5-7 business days
- Best for: Switching brokers, consolidating accounts
Pro tip: Many brokers offer instant buying power for ACH deposits up to a certain amount, even before the transfer settles. Check your broker's policy.
Understanding Fund Availability
Just because money is in your account does not mean you can use it for everything. There are different types of availability:
Fund Availability Types
- Instant Buying Power: You can buy stocks immediately, but cannot withdraw until settled
- Settled Funds: Fully available for trading and withdrawal
- Margin Buying Power: Includes borrowed funds you can use (margin accounts only)
Why Settlement Matters
When you trade with unsettled funds and then sell, you may trigger a good faith violation or free riding violation. These can restrict your account. To avoid issues:
- Wait for deposits to settle before making trades you plan to sell quickly
- Use a margin account to avoid most settlement restrictions
- Track your settled vs unsettled funds
How Much Should You Deposit?
The amount you deposit depends on your goals and situation. Consider these factors:
Minimum Requirements
- Most brokers have no minimum for cash accounts
- Pattern day trading requires $25,000 minimum equity
- Some features require minimum balances
Practical Considerations
- Never deposit money you cannot afford to lose
- Start small while learning (even $500-$1,000 is fine)
- You need enough to properly diversify positions
- Consider position sizing requirements
Starting Capital Example
If you follow the 1% risk rule (risking 1% of account per trade):
With $1,000: You can risk $10 per trade
With $5,000: You can risk $50 per trade
With $10,000: You can risk $100 per trade
More capital allows for better position sizing and less emotional pressure per trade.
Growing Your Account
Many successful traders recommend starting small and adding money over time:
- Start with an amount you are comfortable losing entirely
- Add more capital as you become consistently profitable
- Consider automatic monthly deposits to build your account
- Reinvest profits rather than withdrawing early
Day Trading Requirements
If you plan to day trade (buy and sell the same stock on the same day), be aware of the Pattern Day Trader (PDT) rule:
- If you make 4+ day trades in 5 business days, you are classified as a pattern day trader
- PDT accounts must maintain at least $25,000 in equity
- If you fall below $25,000, you cannot day trade until you add funds
Workaround for smaller accounts: You can still make up to 3 day trades per 5 business days without triggering PDT rules. Many beginners use swing trading strategies to avoid this restriction entirely.
Tax Considerations
Keep these tax-related points in mind when funding and using your account:
- Taxable accounts: No tax benefit for deposits, but gains are taxed annually
- Traditional IRA: Contributions may be tax-deductible, $7,000 annual limit (2026)
- Roth IRA: No deduction, but qualified withdrawals are tax-free, $7,000 limit
- Keep good records of all deposits for cost basis tracking
Setting Up Automatic Deposits
Many brokers let you schedule recurring deposits. Benefits include:
- Dollar-cost averaging into investments
- Building your account balance automatically
- Removing the decision of when to deposit
- Creating consistent capital for trading
Even small automatic deposits ($100-$500 per month) add up over time and help you build good habits.
Withdrawing Funds
You can withdraw money from your brokerage account, but understand the rules:
- Only settled cash can be withdrawn
- ACH withdrawals take 1-3 business days
- Wire withdrawals may have fees but arrive same day
- Selling stock creates settled cash after T+1 (next business day)
- IRA withdrawals may have tax consequences and penalties
Track Your Account Growth
Pro Trader Dashboard shows you exactly how your account is growing over time. See your deposits, withdrawals, and trading performance all in one place.
Common Mistakes to Avoid
- Depositing too much too fast: Start small until you prove you can trade profitably
- Not understanding settlement: Know when your funds are truly available
- Ignoring the PDT rule: This can restrict your account if you are not prepared
- Using emergency funds: Only trade with money you can afford to lose
- Borrowing to trade: Never use credit cards or loans for trading capital
Summary
Funding your trading account is straightforward. ACH transfers are free and work well for most traders. Start with an amount you are comfortable with, understand fund availability rules, and be aware of day trading requirements if you plan to trade frequently.
Build your account gradually as you develop your skills. The goal is to have enough capital to trade effectively while never risking money you cannot afford to lose.
Now that your account is funded, learn how to make your first trade or understand different order types.