How to Buy US Stock ETFs? Ultra-Detailed Illustrated Tutorial to Complete Your First Investment

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Buying US stock ETFs is actually very simple. You only need to complete three steps: account opening, funding, and trading.

This tutorial is your exclusive operation guide. It will use the most detailed illustrations and text to guide you step by step to clear all obstacles and easily complete your first investment.

Investing in US stock ETFs is an excellent way to share in the growth dividends of the world’s top companies. Now, let’s get started!

Key Takeaways

• Buying US stock ETFs involves three main steps: account opening, funding, and trading.
• US stock ETFs are suitable for investment beginners because they automatically diversify risk, have low trading costs, and are simple and transparent to operate.
• Choosing an overseas broker is usually better than domestic sub-accounts because overseas brokers have lower trading costs and more investment options.
• When funding, you need to exchange RMB into USD, then remit to the broker’s account, and ensure the correct reference information is filled in.
• Beginner investors can start with ETFs that track major market indices, such as VOO or QQQ, and prioritize using limit orders for trading.

Must-Read Before Investing: Why Choose US Stock ETFs?

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Before pressing the “Buy” button, you need to understand what you are about to invest in. Let’s spend a few minutes to figure out why US stock ETFs are the ideal choice to start your investment journey.

What Are US Stock ETFs?

You can think of an ETF (Exchange Traded Fund) as a “stock shopping basket.” The fund company packages a basket of stocks from different companies for you and lists it for trading on the exchange like a single stock. Buying one share of an ETF is equivalent to proportionally buying all the stocks in the basket.

This “shopping basket” model is very popular. As of the end of August 2025, the total assets in the US ETF market have reached a record $12.19 trillion, demonstrating high recognition from global investors.

Why Is It Suitable for Investment Beginners?

For investors just starting out, US stock ETFs offer several core advantages:

• Automatic Risk Diversification: You don’t need to pick dozens or hundreds of companies yourself. Buying an ETF that tracks a major index automatically diversifies your investment across numerous industries and companies, effectively avoiding risks from sharp fluctuations in individual company stocks.
• Extremely Low Trading Costs: The fees for managing these “shopping baskets” are very low. In contrast, actively managed funds require higher management fees. Lower fees mean more of your investment returns stay in your pocket.

  Fund Type	2024 Average Expense Ratio
  Active US Equity Funds	0.60%
  All Passive Funds (Including ETFs)	0.11%

• Simple and Transparent Operation: Buying an ETF is as simple as trading any ordinary stock. At the same time, ETFs disclose all their holdings daily, so you can clearly know where your money is invested.

Introduction to the Three Major US Stock Indices

Most beginners’ first US stock ETF tracks a major market index. An index is like a “thermometer” measuring the overall performance of the stock market. Understanding the three core indices can help you make choices.

Indices themselves cannot be traded directly, but you can invest in them by buying ETFs that track these indices.

1. S&P 500 Index: Tracks the 500 largest US companies by market capitalization, regarded as the most authoritative and comprehensive indicator of the US stock market.
2. Nasdaq 100 Index: Tracks the 100 largest non-financial companies listed on the Nasdaq exchange. It is dominated by tech stocks, gathering giants like Apple, Microsoft, and Amazon. Over the past 10 years, the index’s annualized return has reached 15.2%, showing strong growth potential.
3. Dow Jones Industrial Average: Tracks 30 well-known US “blue-chip” companies, one of the oldest US market indices, representing the most influential companies in the US economy.

Account Opening: Choosing and Opening a Broker Account

After understanding the advantages of ETFs, we officially enter the practical phase. The first step to completing an investment is to have a “trading account” where you can buy and sell US stocks. This account is provided by a broker.

Overseas Brokers vs. Domestic Sub-Accounts

As an investor in mainland China, you have two main ways to open a US stock account:

1. Overseas Brokers: You directly open an account with a US broker (such as Firstrade, Interactive Brokers).
2. Domestic Sub-Accounts: You indirectly open US stock trading permissions through certain securities companies or banks in mainland China.

For beginners, choosing which method will directly affect your investment costs and experience.

To make it clearer for you, we use a table to compare their core differences:

Advice for Beginners: If you seek lower trading costs and more investment choices, directly choosing a reputable overseas broker is the better option. Although the initial operation may require some time to learn, in the long run, it can save you considerable fees.

Comparison of Popular Overseas Brokers

There are many overseas brokers on the market. We have selected three of the most popular among global investors for comparison to help you decide.

How to Choose?

• Top Choice for Beginners: Firstrade. Its $0 commission policy and extremely beginner-friendly full Chinese interface and customer service almost eliminate all language and operation barriers.
• Professional Choice: Interactive Brokers. If you have more complex trading needs in the future (such as options, futures), IB’s powerful trading tools will be a great helper.

In addition, when choosing a broker, the convenience of funding methods is also a consideration. Some modern payment solutions (such as Biyapay) can simplify the traditional wire transfer process, which we will introduce in detail in the next chapter “Funding.”

Broker Account Opening Practical Guide

Here, we take the most beginner-friendly Firstrade as an example to guide you step by step through the account opening. The entire process takes about 10-15 minutes; you just need to follow along.

Step 1: Prepare Account Opening Materials

Before starting, please prepare electronic versions of the following documents (clear photos taken with your phone are fine):

• Valid Passport: Ensure the passport is within validity, and the photo and personal information pages need to be clear and complete.
• W-8BEN Form: This is the tax form required for non-US residents to declare your non-US resident status, thereby enjoying capital gains tax exemption benefits. Firstrade’s online account opening process will automatically generate this form; you only need to confirm it online, no separate preparation needed.

Step 2: Online Application

1. Visit the Firstrade official website and click “Open Account Now.”
2. Select the “Non-US Resident” account type and register with your mobile number or email.
3. Follow the page prompts to fill in your personal information sequentially.
   • Personal Information: Name, gender, date of birth, etc. Please use Pinyin and ensure it matches your passport information exactly.
   • Residential Address: Use Pinyin to fill in your current residential address.
   • Employment Information: Truthfully fill in your occupational status.
   • Financial Status and Investment Experience: Simply fill in your annual income, assets, etc., and select investment experience based on actual situation. This information is mainly for the broker’s compliance assessment; fill it truthfully.
4. Upload your passport photo. Follow the website requirements to upload the prepared passport information page photo.
5. Online sign the W-8BEN form and other agreements. Carefully read and enter your name in the designated places to complete the electronic signature.

Step 3: Submit and Wait for Review

After completing all information filling and file uploads, submit your application.

Firstrade’s account approval usually takes 1 to 3 business days. After approval, you will receive a confirmation email containing your account number. Congratulations, this means your US stock account has been successfully opened!

💡 Tips: What You Need to Know About Taxes As a non-US resident, properly handling tax issues is very important.

• W-8BEN Form is Key: This form proves to the US Internal Revenue Service (IRS) your “non-US tax resident” status. After successful submission, capital gains (price difference profits) from selling stocks or ETFs are tax-exempt.
• Dividend Tax: Although capital gains are tax-exempt, cash dividends (dividends) you receive will have 30% withheld. If your country has a tax treaty with the US, this rate may be lower.
• No Need to Worry: The entire process is automatically handled by the broker. You only need to ensure the W-8BEN form is correctly signed during account opening; the broker will automatically deduct the corresponding tax when distributing dividends, with no additional operations required from you.

At this point, the most critical step of account opening is complete. Next, we will learn how to “fund” this new account.

Funding: How to Remit to the Broker Account?

Your US stock account has been successfully opened; now the last step is to inject funds into the account. This process is called “funding,” essentially a cross-border wire transfer from your mainland China bank account to the US broker’s designated bank account.

Don’t worry; this process is simpler than it sounds. You only need to operate a few steps on your mobile banking app to complete it.

Bank Foreign Exchange Purchase and Remittance Process

Funding mainly involves two actions: foreign exchange purchase and remittance.

First, you need to exchange RMB into USD, called “foreign exchange purchase.” According to regulations, mainland Chinese citizens have an annual foreign exchange purchase limit of $50,000 USD. This limit is completely sufficient for most beginner investors.

Next, we take the operation of a mainstream bank app (such as China Merchants Bank) as an example to show you the standard process:

1. Foreign Exchange Purchase: Log in to your mobile banking app, find the “Foreign Exchange” or “Exchange and Settlement” function, and choose to buy USD with RMB. When filling in the purpose, usually select options like “Private Travel” or “Personal Consumption.”
2. Remittance: After completing the purchase, find the “Overseas Remittance” or “Cross-Border Remittance” function in the app. Then, you need to accurately fill in the recipient’s information.

Guidance for Filling Remittance Information

The key to remittance is correctly filling in the recipient information. This information needs to be found by logging into your Firstrade account backend. Usually, you will see recipient guidance similar to the following:

Special Note:

• The “Reference” or “Further Information” (For Further Credit to) field is crucial; it must accurately include your broker account number and name, otherwise funds cannot be successfully deposited into your account.
• The remitter’s name must exactly match your broker account name.

💡 Tips: About SWIFT Code When conducting international remittances, banks usually require a SWIFT Code. You can find it in the broker’s official website help center or directly contact customer service for the latest international remittance path information.

Remittance Fees and Money-Saving Tips

Cross-border wire transfers incur a fee, usually between 30 to 50 USD. This fee mainly consists of three parts:

• Bank Handling Fee: Charged as a certain percentage of the remittance amount, with minimum and maximum standards.
• Cable Fee: A fixed fee for sending remittance instructions, usually 15-20 USD.
• Intermediary Bank Fee: If there is no direct cooperation between your remitting bank and the receiving bank, funds pass through a third-party bank (intermediary), which deducts a service fee.

How to Save Fees? You can remit a slightly larger amount at once (for example, the amount planned for half a year’s investment) instead of frequent small remittances. This effectively reduces the number of fixed cable and handling fees paid, thereby lowering total costs.

Trading: Buying Your First ETF

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Congratulations! Funds have successfully arrived in your broker account. Now, you are just one step away from owning your first US stock investment. This final link is “trading,” which means pressing the “Buy” button in the trading software.

Let’s see how to select and buy your first US stock ETF.

How to Choose Your First US Stock ETF?

Faced with thousands of choices, beginners often feel overwhelmed. The simplest and most effective strategy is: Start with ETFs that track major market indices.

This type of ETF allows you to buy a representative batch of US market companies at once, achieving full diversification, perfectly matching beginners’ investment goals. Here, we recommend two of the most popular choices for you:

1. VOO (Vanguard S&P 500 ETF)

• Tracked Index: S&P 500 Index.
• Features: This ETF lets you invest in the 500 largest and most diversified US listed companies at once. It is widely regarded as the benchmark for measuring overall US stock market performance. If you seek stability and want to obtain the market’s “average return,” VOO is an excellent starting point.
• Core Data: Its expense ratio is extremely low, only 0.03%, with a dividend yield of about 1.1%.

VOO’s holdings are very diversified, covering all aspects of the US economy. Buying one share of VOO makes you a shareholder in numerous top companies.

2. QQQ (Invesco QQQ Trust)

• Tracked Index: Nasdaq 100 Index.
• Features: This ETF focuses on the 100 largest non-financial companies listed on Nasdaq, dominated by tech stocks. If you are bullish on the long-term growth potential of the tech sector and are willing to bear slightly higher volatility than the broader market, QQQ is a more growth-oriented choice.
• Core Data: Its expense ratio is 0.20%, with a dividend yield of about 0.45%.

QQQ’s holdings are highly concentrated in tech giants, with the top 10 holdings totaling over 50%, making its performance highly correlated with the tech sector’s prosperity.

Choice Advice for Beginners

Trading Platform Order Placement Guide

Once you’ve selected your target, the next step is to learn how to place orders in the broker app. No matter which broker you use, the trading interfaces are similar.

Usually, you will see the following core elements:

1. Stock Ticker: Enter the ETF code you want to trade, such as VOO or QQQ.
2. Buy/Sell: Choose your trading direction. For your first investment, you will select “Buy.”
3. Order Type: This is one of the most critical options, determining how your order is executed. Mainly divided into two types: market order and limit order.
4. Quantity: Enter the number of shares you want to buy.
5. Price: If you choose a limit order, enter the maximum price you are willing to pay here.

Market Order vs. Limit Order: Must-Know Differences for Beginners Understanding these two order types can help you better control trading costs.

Advice for Beginners: Prioritize using Limit Orders. They ensure you won’t buy at a price higher than expected. For example, if an ETF’s current market price is $500, you can set a $500.50 limit buy order. This way, your order only executes at or below $500.50, effectively avoiding “overpaying.”

Practical Exercise: Buying VOO

Now, let’s take buying VOO as an example and walk through the full order placement process.

Step 1: Search for ETF Code Open your broker app, enter VOO in the top search box, then select it from the search results.

Step 2: Fill Order Information After entering the VOO trading page, fill the order as follows:

1. Click Buy.
2. Select Limit Order for order type.
3. In the “Price” field, enter the maximum per-share price you are willing to pay (reference current market price, or slightly higher to ensure execution).
4. In the “Quantity” field, enter the number of shares you want to buy.
5. Confirm order information is correct.

Step 3: Preview and Submit Order Click the “Preview Order” button; the system will pop up a confirmation window showing your trade details, including estimated total amount. Carefully check and click “Submit Order.”

Step 4: Check Order Status After submitting, you can immediately view it in the “Order Status” menu.

• If the order status shows “Submitted” or “Pending,” it means it’s waiting for the market price to reach your limit.
• Once executed, the status updates to “Filled.” At this point, you can see your newly purchased US stock ETF in your “Holdings” page.

Congratulations! You have successfully completed your first US stock investment! This small step is a giant leap in starting global asset allocation and sharing in the growth dividends of the world’s top companies.

Reviewing the full article, the core path to buying US stock ETFs is very clear: account opening, funding, trading. You have now mastered all the knowledge needed to complete your first investment.

Investing is a marathon, not a sprint. Bravely take the first step and stick to long-term holding. This allows you to enjoy compound growth, while reducing costs and anxiety from frequent trading.

Congratulations, from today onward, you have officially opened a new chapter in global asset allocation!

FAQ

What is the minimum investment amount required?

US stock investing has no minimum amount limit. You can start with one share of an ETF, with prices ranging from tens to hundreds of USD. Some brokers also support fractional shares, allowing you to start investing with less money, such as $50 USD.

What are the US stock trading hours?

US stock market regular trading hours correspond to evening Beijing time. Summer time: 9:30 PM to 4:00 AM next day. Winter time: 10:30 PM to 5:00 AM next day. You can trade during this period.

Can I buy only 0.1 share of an ETF?

Yes. Many brokers (such as Firstrade) offer “fractional share” trading. This allows you to buy by amount rather than whole shares. For example, you can directly invest $100 USD in VOO without buying a full share.

How do I withdraw money back to a mainland China bank after investing?

The process is the reverse of funding. You need to submit a withdrawal request in the broker app to remit USD from the broker account back to your mainland China bank account. The broker provides detailed guidance; the entire process usually takes several business days.