Ready to start investing, but not sure where to start? The first thing you need to know is how to open a brokerage account. The good news is, this part is incredibly easy. The only difficult part is choosing the right brokerage firm for you.
But in all fairness, the easiest way to get started is to open an account with one of the major discount brokerage firms. Make your choice. Fidelity, TD Ameritrade, E-Trade, and Charles Schwab all offer similar services. For the most part, account minimums and commission fees are a thing of the past, although some brokerage firms still charge commissions on option trades. And some offer more comprehensive searches than others. For a more complete breakdown of our top brokerage firms, click here.
Click around. Check them out. See which one you like the most. And follow your instincts. Because for the most part, they are all capable of the same things. If any of these appeals to you more aesthetically, this is probably the one for you. Don’t let the decision-making process slow you down. After all, you are ready to start putting your money to work. And time is money.
However, if you find that you end up liking a different brokerage than the one you originally chose, it’s not hard to change. All you have to do is contact the new broker and ask them to initiate a transfer of stocks, bonds, options, mutual funds, etc. from your old broker. And opening a new brokerage account shouldn’t impact your credit score. But we are getting ahead here. Let’s talk about what you need and how to open a brokerage account.
How to open a brokerage account in minutes
There are all kinds of accounts for investors. You have managed accounts, Roth IRAs, 401 (k), and 529 Plans, which are education investment plans. But to keep things clear, we are going to explain how to open a simple brokerage account.
In this example, we’ll be using Fidelity. The process begins with a simple question. Will it be an individual or joint account? Just choose what applies to you.
You are then invited to complete a short form containing your personal information. This is your name, social security number, date of birth, phone number, home address, and email address. If for some reason you are not comfortable submitting this information online, you can also visit a local branch and create your account there.
If you choose the easiest online registration process, once you have completed the form, you will receive a page with a range of terms and conditions documents. Of course, we recommend that you open, read, and save each of these documents… as we do with every terms and conditions page that we come across.
Once you agree to the aforementioned terms and conditions, your account will be open and ready to go. The only real requirement that might hamper your ability to open an account is your age. You must be at least 18 years old in most states. But younger ones can ask their parents to create an account for them – according to the brokerage firm. And in some cases, a brokerage firm may require a driver’s license, passport, or other government-issued ID to finalize opening an account.
You have opened an account. Now what?
Once you understand how to open a brokerage account, the next step is to fund it. If you open your account in person at a branch, the branch should be able to deposit a check for you there. If you’ve opened your account online, you have a number of options to choose from.
You can initiate a one-time transfer from your bank account. At this point, you can also set up an asset transfer from an old account to this new one. And there is also an option to print and mail a paper transfer form, for those who are old school.
One of the options we like the most is the ability to set up recurring transfers from a bank account. It’s a simple way to make sure you always have cash in your brokerage account, ready to be invested. You can choose how much and how often. And you can easily make changes anytime.
However, if you just want to get started ASAP, you can use a one-time transfer. All you will need are your routing and bank account numbers. However, the transfer will not be immediate. And it can take up to three business days for the first transfer. But once the account is established, transfers will be much faster in the future – and your account may offer the option to trade on margin.
The basics of opening a brokerage account
As we mentioned above, most online brokerages vary in their overall design. But they all have the same general characteristics for making a transaction. So your chosen broker’s website may differ slightly from the process described above. But to rehash, those trying to figure out how to open a brokerage account will need the following information:
- Full legal name
- Social security number (or tax identification number)
- Address
- Phone number
- E-mail address
- Date of Birth
- A government-issued form of identification (optionally).
Once you have it all at your fingertips, simply follow the steps above and you will be ready to start investing in no time! And for those who have funds in their accounts and nowhere to invest them, we strongly recommend that you register for free. Rich retirement e-letter. In it, investment expert Marc Lichtenfeld helps readers overcome the pitfalls of other investors… and take a more direct path to financial independence.
Read more: How to Trade Stocks for Beginners
About Matthew Makowski
Matthew Makowski is Senior Research Analyst and Writer at Investment U. He has studied and written about the markets for 20 years. As comfortable with identifying value stocks as he is with discounts in crypto markets, Matthew started mining Bitcoin in 2011 and has since focused on cryptocurrency markets as a whole. He is a graduate of Rutgers University and lives in Colorado with his dog Dorito.
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