What Is a Share Trading Account? Guide for Australians

In Australia, it's the everyday starting point for anyone who wants to invest in the sharemarket — and this guide explains, in plain English, what a share trading account is, how it works, and what to look for before you open one.

If you've heard the term "brokerage account" and wondered whether it's the same thing, or you're unsure how your shares are actually held, you're in the right place. We'll keep the jargon to a minimum and define anything technical as we go.

What is a share trading account?

A share trading account is an account, opened through a stockbroker, that lets you place orders to buy and sell securities listed on an exchange — most commonly the Australian Securities Exchange (ASX). Once your account is open and funded, you use it to search for a share or ETF, place an order, and track your holdings in one place.

Think of it as three things working together:

• A gateway to the market. Your broker is a licensed participant that sends your buy and sell orders to the exchange on your behalf. You can't trade ASX-listed shares directly without one.

• A record of what you own. Your holdings, order history and portfolio value sit inside the account, usually viewable in an app or on desktop.

• A link to your cash. A trading account is connected to a cash account that funds your purchases and receives the proceeds when you sell.

A share trading account is not where your money earns interest like a savings account, and it isn't a managed fund where someone invests on your behalf. With a self-directed (DIY) account, you make your own decisions about what to buy and sell.

Share trading account vs brokerage account — same thing?

Mostly, yes. "Brokerage account" is the term used more often in the United States, while "share trading account" (or "online trading account") is the phrase Australians tend to use for the same idea: an account through a broker that you use to invest in listed shares and ETFs.

There's one distinction worth knowing. A full-service broker typically makes investment decisions and places trades for you, often for higher fees. A DIY online share trading account — like the one most everyday investors open — leaves the decisions to you and typically costs far less per trade. This guide focuses on the DIY online type, which is what platforms such as Selfwealth provide.

How does a share trading account work?

The mechanics are simpler than they sound. Here's the typical flow from sign-up to owning shares. For a step-by-step walkthrough, see our guide on how to buy shares in Australia.

1. Opening and verifying your account

You apply online, provide some personal details and verify your identity (usually with an Australian driver's licence or passport). Applications are often completed in minutes, though identity checks can take a day or two to finalise.

2. Funding the account

Before you can buy anything, you add money to the cash account linked to your trading account. With Selfwealth, you can fund via Osko (near-instant) or a standard bank transfer (usually 1–2 business days). Your cash sits in a dedicated trading account — with Selfwealth, that's an ANZ cash account created when you sign up, with you as the beneficiary.

3. Placing an order

You find the share or ETF by its ASX ticker (for example, a well-known ETF or a company like BHP), choose how many units you want, and select an order type:

• A market order buys or sells at the best price currently available.

• A limit order only executes at a price you set or better.

For a first purchase of a particular ASX stock, there's a minimum "marketable parcel" of around A$500 (excluding brokerage), although broker rules and available products may differ. If you'd rather invest smaller amounts on a regular schedule, features like Auto-Invest let you set up recurring orders and dollar-cost average over time. (Dollar-cost averaging simply means investing a set amount at regular intervals, rather than trying to time the market. It doesn't remove risk or guarantee a better result.)

4. Settlement and holdings

When your order fills, you'll receive a confirmation quickly, but the trade "settles" a couple of days later. ASX-listed trades currently settle on a T+2 basis — two business days after the trade date — although the ASX is working towards a shorter T+1 cycle in future. Once settled, the shares are recorded as yours and appear in your portfolio.

How your shares are held: CHESS-sponsored (HIN) vs custodian

This is one of the most important — and most overlooked — parts of understanding a share trading account. There are two broad models for how brokers hold your ASX shares.

CHESS-sponsored (HIN-based). CHESS (the Clearing House Electronic Subregister System) is the ASX's electronic register that records who owns what. If your broker is CHESS-sponsored, your ASX shares are registered under your own Holder Identification Number (HIN) — a unique number starting with "X". That means your holdings are registered directly in your name. Selfwealth's ASX trades are CHESS-sponsored, so shares are registered in your name.

Custodial. Under a custodial model, your shares are pooled under the broker's own name, and you hold a "beneficial" interest rather than direct legal title. This is common with some international-focused platforms.

Neither model is inherently right or wrong, but the distinction matters most if a broker ever runs into financial trouble. Many investors prefer CHESS sponsorship because the holdings are registered directly in their own name.. You can read a fuller explanation in our simple guide to CHESS sponsorship and why it matters, or see how settlement and CHESS work on the ASX's own settlement page.

Important: CHESS applies only to ASX-listed securities. Shares you buy on international markets, such as the US, are held under different arrangements.

Types of share trading accounts in Australia

A share trading account can be opened under different legal structures, depending on who — or what — is doing the investing. Common options include:

• Individual — held and owned by one person.

• Joint — shared between two people who own and trade together.

• Minor — held in an adult's name with a child listed as beneficiary.

• Company — investing is done in the name of a company.

• Trust — run by a trustee on behalf of the trust's beneficiaries.

• SMSF (self-managed super fund) — a trading account for a self-managed super fund, opened once the fund is established.

The right structure depends on your circumstances, and structures like trusts and SMSFs carry extra rules and responsibilities. You can see the full range of account types Selfwealth offers, and there's dedicated information for anyone investing through an SMSF trading account. Because company, trust and SMSF structures have tax and legal implications, it's wise to speak with a registered tax agent or licensed adviser before choosing one.

What a share trading account is not

It helps to clear up a few things a share trading account isn't:

• Not a bank or savings account. It doesn't pay interest on your balance the way a savings account does. Its job is to let you invest, not to store cash long term.

• Not the same as the cash/settlement account. The linked cash account (for Selfwealth, an ANZ account) holds funds for trading and receives sale proceeds — but the trading account itself is what places the orders.

• Not a CFD account. With a share trading account you actually own the shares. A contract for difference (CFD) is a leveraged product where you speculate on price movements without owning anything — a very different, higher-risk proposition.

• Not superannuation. Your super is a separate retirement structure. (An SMSF can hold a share trading account, but that's a specific structure, not the same as a regular super fund.)

What does a share trading account cost?

Costs vary a lot between providers, so it's worth comparing. The main ones to look for:

• Brokerage — the fee to place a trade. Some brokers charge a percentage of the trade value, which grows as your trade gets bigger; others charge a flat fee. Selfwealth charges a flat $9.50 per trade on the ASX and a flat $9.50 USD on US trades, regardless of trade size.

• Account-keeping fees — ongoing charges just for holding the account. Selfwealth doesn't charge these.

• Foreign exchange (FX) fees — applied when you convert currency to trade international shares.

• Market data or premium tools — optional live pricing and research, sometimes bundled or offered as an add-on.

You can see a full breakdown on the Selfwealth pricing and brokerage page. When comparing, look at the total cost for the trades you actually plan to make, not just the headline number.

Is a share trading account right for you?

That depends entirely on your own goals, timeframe and financial situation — which is a personal question only you (or a licensed adviser) can answer. As general information, a share trading account suits people who want to invest directly in shares and ETFs and are comfortable making their own decisions and accepting investment risk.

It's worth remembering that all share investing carries risk, including the risk of losing money. Share prices can rise or fall, dividends aren't guaranteed, and past performance is not a reliable indicator of future returns. No account type, fee structure or ownership model removes that risk. If you're not sure whether investing in shares suits your circumstances, ASIC's Moneysmart has free, independent guidance, or you can speak with a licensed financial adviser.

Ready to put this into practice? You can open a Selfwealth share trading account online in a few minutes, with flat $9.50 brokerage on ASX and US trades, CHESS-sponsored ASX holdings, and no account-keeping fees.

Frequently asked questions

Is a share trading account the same as a brokerage account? 

Broadly, yes. "Brokerage account" is the more common US term, while "share trading account" is what Australians usually call an account, opened through a broker, that's used to buy and sell listed shares and ETFs.

Do I need a share trading account to buy shares in Australia? 

Yes. ASX-listed shares are bought and sold through a licensed broker, so you'll need a share trading account (either a full-service broker or a DIY online platform) to place trades.

How much money do I need to open a share trading account? 

Opening an account itself is typically free. To make your first purchase of a particular ASX stock, there's a minimum marketable parcel of around A$500 (excluding brokerage). How much you personally invest depends on your own goals and situation.

Can I trade international shares from an Australian share trading account? 

Often, yes. Many Australian brokers, including Selfwealth, offer access to US markets like the NYSE and Nasdaq — and in some cases Hong Kong — alongside the ASX, usually within the same account. Note that CHESS ownership applies only to ASX holdings.

How long does it take to open a share trading account? 

Online applications are often completed in minutes, though full identity verification can take a day or two depending on the platform and the checks required.

Are my shares safe in a share trading account? 

No investment is risk-free — share prices can fall as well as rise. That said, how your shares are held matters: with CHESS-sponsored (HIN-based) accounts, your ASX shares are registered directly in your name rather than pooled under a custodian, which many investors consider a stronger ownership position.