Putting $100 into the S&P 500 means owning a tiny slice of 500 of the largest U.S. companies at once, from Apple to ExxonMobil. That is the appeal: instant diversification in a single purchase, with no need to pick winning stocks yourself. The hard part is not the idea, it is knowing the exact steps to actually do it.
This guide walks through how to invest in the S&P 500 index in 2026, from choosing a fund to opening an account and avoiding the fees that quietly eat returns. It is written for beginners, so no jargon is assumed. If you are brand new to markets, our investing 101 primer covers the basics first.
What the S&P 500 Actually Is
The S&P 500 is a stock market index that tracks roughly 500 of the largest publicly traded U.S. companies. It is widely treated as a benchmark for the overall U.S. stock market.
You cannot buy the index directly. Instead, you buy a fund that holds the same stocks in the same proportions and tracks the index for you. Two kinds of funds do this: index mutual funds and exchange-traded funds, known as ETFs. If the term is new to you, our guide to what an ETF is explains how these funds trade.
Step 1: Choose an Index Fund or ETF
Your first decision is which S&P 500 fund to buy. The most popular options are low-cost ETFs that mirror the index. The Vanguard S&P 500 ETF (VOO) is a leading example, with an expense ratio of just 0.03% as of June 2026, meaning $3 a year in fees per $10,000 invested.
That tiny fee matters more than it looks. The median fund in the same category charges around 0.67% a year, more than 20 times higher. Over decades, the difference compounds into thousands of dollars. When comparing S&P 500 funds, the expense ratio is the single most important number, because they all hold nearly identical stocks. For a deeper look at how these funds work, see our explainer on the S&P 500 ETF and a side-by-side of the best S&P 500 ETF options.
Step 2: Open a Brokerage Account
To buy an S&P 500 ETF, you need a brokerage account. This is the account that holds your investments. Opening one is similar to opening a bank account: you provide ID, link a funding source, and you are usually approved in minutes.
For beginners, a commission-free app keeps costs low and the process simple. Robinhood lets you buy and sell S&P 500 ETFs like VOO commission-free, with fractional shares so you can start with just a few dollars instead of buying a full share. That makes it easy to begin even on a small budget. If you want to compare platforms first, our roundup of the best investment app for beginners ranks the most popular choices.
If you can only invest small amounts at first, fractional shares are the feature to look for. They let your money go to work right away rather than sitting idle until you can afford a whole share.
Robinhood
Robinhood
Robinhood is a trading platform that brings stocks, ETFs, options, futures, prediction markets, crypto, and retirement accounts together in one app.
Standout feature
One platform for stocks, ETFs, options, futures, prediction markets, and crypto
Fees
$0 commission on stocks, ETFs, and options.
Pros
Zero-commission trading on stocks, ETFs, and options
Cons
Best perks (high APY, lower margin rates) require Gold subscription ($5/month)
Step 3: Decide Between a Taxable Account and an IRA
Where you hold your S&P 500 fund changes your tax outcome. A standard taxable brokerage account is flexible: you can withdraw anytime, but you owe tax on gains and dividends.
A retirement account like a Roth IRA or traditional IRA offers tax advantages in exchange for withdrawal rules. Many beginners use both: an IRA for long-term retirement money and a taxable account for goals they may reach sooner. Learning how to set up a Roth IRA is a sensible next step, and if you are weighing whether to hold the index there, our piece on whether to invest your Roth IRA in the S&P 500 lays out the tradeoffs. Public is a brokerage that supports investing in ETFs and offers retirement accounts, and it is worth comparing if you want to hold your S&P 500 fund inside an IRA for the tax benefits.
Public
Public
Investing for those who take it seriously. Invest in stocks, bonds, options, crypto & more.
Standout feature
A 5%+ yield Bond Account paired with 3.3% APY on cash — Public is one of the only consumer apps where idle and conservative money is treated as seriously as the equity portfolio.
Fees
Free
Pros
• Invest in stocks, bonds, crypto & more• Earn 3.3% APY* on your cash with no fees• 1% match when you transfer your portfolio• Lock in a 5%+ yield with a Bond Account
Cons
Customer support is in-app and email only, no phone
Step 4: Buy the Fund and Set Up Automatic Investing
Once your account is funded, search for your chosen ticker, such as VOO, enter the dollar amount or number of shares, and place the order. With fractional shares you can invest an exact dollar amount.
The most reliable approach for most people is dollar-cost averaging: investing a fixed amount on a regular schedule, like $100 every payday, regardless of price. This removes the temptation to time the market and smooths out your average buy price over time. Many brokerages let you automate recurring buys so it happens without you thinking about it.
Step 5: Hold for the Long Term
The S&P 500 has historically rewarded patient, long-term investors, but it can drop sharply in any given year. Investing in the index carries real market risk, and past performance does not guarantee future results.
The biggest mistake new investors make is selling during a downturn. A long-term mindset, often measured in years and decades rather than weeks, is what has historically let index investors ride out volatility. Only invest money you will not need in the near term.
A Note on Diversifying Beyond U.S. Stocks
The S&P 500 is large-cap U.S. stocks only. Some investors add a small allocation to other assets over time to spread risk further, which is part of learning how to build an investment portfolio that fits your goals. For those curious about crypto as a small, higher-risk slice of a broader portfolio, Gemini is a regulated exchange that lets you buy and hold crypto separately from your stock holdings. Crypto is far more volatile than an index fund, so most beginners keep it to a small portion if they include it at all.
Gemini
Gemini
Buy, sell, and trade 70+ cryptocurrencies on one of America's most trusted and regulated exchanges. Founded by the Winklevoss twins, Gemini makes crypto simple and secure — plus get $15 in free Bitcoin when you trade $100.
Standout feature
Highly regulated exchange. Get $15 in free Bitcoin with $100 trade. 70+ coins available.
Fees
Free
Pros
One of the most regulated crypto exchanges. Strong security standards. Get $15 in free Bitcoin.
Cons
Higher fees than some competitors on the basic platform.
Common Mistakes to Avoid
- Paying high fees: choose a fund with a low expense ratio, ideally well under 0.10%.
- Trying to time the market: dollar-cost averaging beats guessing the bottom for most people.
- Panic selling in a downturn: market drops are normal and historically temporary.
- Investing money you need soon: keep an emergency fund separate from your S&P 500 investments.
Frequently Asked Questions
How much money do I need to start investing in the S&P 500?
Thanks to fractional shares offered by many brokerages, you can start with as little as a few dollars. You buy a partial share of an S&P 500 ETF rather than waiting until you can afford a full share, which can cost several hundred dollars.
What is the best S&P 500 fund to buy?
Because all S&P 500 funds hold nearly the same stocks, the lowest-cost option usually wins. Low-expense-ratio ETFs like the Vanguard S&P 500 ETF (VOO), at 0.03% as of June 2026, are popular choices. Always compare the expense ratio before buying.
Is investing in the S&P 500 safe?
No investment is risk-free. The S&P 500 carries market risk and can fall sharply in any year, but it spreads your money across 500 large companies, which lowers the risk compared to buying a single stock. It is generally considered a lower-risk way to invest in stocks over the long term.
Should I use a taxable account or an IRA for the S&P 500?
It depends on your goal. An IRA offers tax advantages for long-term retirement savings but has withdrawal rules. A taxable brokerage account is flexible and lets you withdraw anytime, though you owe tax on gains. Many investors use both for different goals.
