How to Open a Vanguard Account (Buy Your First ETF) -

Step 1: Choose the Right Bucket

Before you start, you must pick an account type. Don’t click randomly.

Account Type	Best For…	Withdrawal Rules
Brokerage (Individual)	General Investing	Anytime (Taxable)
Roth IRA	Retirement	Age 59½ (Tax-Free)
Traditional IRA	Tax Deduction	Age 59½ (Taxed)

Which one for me?

If you want to buy a house in 5 years, choose Individual Brokerage. If you are saving for old age (and want tax-free growth), choose Roth IRA.

Flexibility vs Tax Benefit

Brokerage Acct High Flex

Withdraw anytime. No penalties.

Roth IRA High Tax Savings

Locked until age 59½.

Traditional IRA Med Tax Savings

Locked & Taxed later.

Goal	Pick
Retire Rich	Roth IRA
Buy House	Brokerage

Step 2: The “Settlement Fund” (Critical)

This is where 90% of beginners get stuck.

When you transfer money from your Bank (Chase/Wells Fargo) to Vanguard, it doesn’t buy stock immediately. It lands in a holding pen called the “Federal Money Market Fund (Settlement Fund).”

Think of it as: A digital wallet inside Vanguard.
Current Rate: It pays ~5% interest just for sitting there.
Action: You must take money out of this Settlement Fund to buy ETFs.

Step 3: Buying Your First ETF (Screenshots)

Okay, your money has arrived. Let’s buy VTI (Vanguard Total Stock Market ETF).

1. Search for the Ticker

Find the search bar at the top. Type “VTI”. (Do not type “Vanguard”).
Click on the result: “Vanguard Total Stock Market ETF”.

2. Click “Transact” > “Buy”

Ignore the confusing charts. Just look for the button that says Transact or Trade. Select “Buy”.

3. Fill out the Ticket

Vanguard asks: “How do you want to buy?”
Order Type: Select “Market”. (This means buy it NOW at the current price).
Amount: Select “Dollars” and type $100 (or whatever you have). Vanguard now supports fractional shares, so you don’t need to buy a whole share!

4. Preview and Submit

Review the order. It will say “Estimated Cost.” Click Submit Order.
Congratulations. You are now an owner of 3,700 American companies.

Pro Tip: Automate the Pain

Vanguard is ugly, so you don’t want to log in every month.

Set Up “Auto-Invest”

Go to Profile & Settings > Automatic Investing.
Tell Vanguard: “Pull $500 from my bank on the 1st of every month and buy VTI.”
Now, delete the app. Come back in 30 years. You will be rich.

Frequently Asked Questions

Why does it say “Mutual Fund Only”?

Some old Vanguard accounts only allowed auto-investing into Mutual Funds (like VTSAX). Update 2026: Vanguard now allows auto-investing into ETFs (VTI/VOO). If you don’t see it, update your account settings.

Why is the price changing?

The stock market is open 9:30 AM to 4:00 PM ET. The price moves every second. If you place an order at night, it will execute the next morning when the market opens.