Wednesday, February 27, 2008

You Can Buy Stocks With Paypal

Important: In order to use this method, you will of course need to open a PayPal Account (it's free).

I have noticed a LOT of people online desperately searching for a way to invest online using PayPal. Many people don't have checking accounts, for various reasons, or perhaps they are overseas and would like to invest in US companies, using money they've earned on PayPal.

It is not expressly advertised that this can be done. PayPal seems to tend to want to be recognized more as an online shopping tool than anything else. But it CAN be used to purchase stocks, and I'll tell you how!

The only site I'm positive this works with is E*Trade. I can't say for sure about any others, because etrade is the only one I have done it with.
Its a pretty simple process, actually. Go to http://www.etrade.com/ and sign up for a brokerage account. It does not require (at least at the time of this writing) any sort of initial deposit. After you've done that, make a note of your securities account number, and head on over to PayPal.

You'll want to add a bank account to your PayPal profile. You are now going to add your Etrade brokerage account as a checking account.
For the ABA number (also known as the routing number) use: 056073573
For the name of the bank, use: Etrade Clearing LLC
For the checking account number, use your Etrade brokerage account number, and for account type be sure to select checking.

To verify that this is Etrade's correct ABA (routing) number, look up how to do a wire transfer on Etrade, and the ABA number they give should match the one I gave you above. If it does NOT match (it may change in the future), then replace the ABA number I gave you in the instructions with the one that is listed on Etrade's website for wire transfers.

PayPal will go through the normal process of making two small deposits into your Etrade account in a few days that you will need to verify, and voila, your PayPal account is linked to your Etrade. You can then use the funds to invest in whatever you'd like. You can also apply for an Etrade debit card.

Hopefully this system will still be functional in the future, but if you ever plan to buy stocks with PayPal, I suggest you do it now just in case!

As far as which stocks to buy...well...do your research! There are several resources available online to help you figure out what type of investments would be best for you.