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How to Open a Brokerage Account and Start Trading

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Ready to start investing, but not sure exactly where to start? The first thing you need to figure out is how to open a brokerage account. The good news is this part is incredibly easy. The only hard part is choosing which brokerage works best for you.

But in all honesty, the easiest way to get started is by opening an account with any of the big discount brokerages. Take your pick. 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 – though some do still charge commissions on options trading. And some offer more comprehensive research than others. For a more complete breakdown of our top brokerages, click here.

Click around. Check ‘em out. And see which one appeals to you the most. Follow your gut. Because for the most part, they are all capable of the same things. If one appeals to you more aesthetically, than that’s probably the one for you. Just don’t let the decision-making process slow you down. After all, you’re ready to start putting your money to work. And time is money.

However, if you find that you wind up liking a different brokerage than the one you initially chose, it’s not difficult to switch. All you have to do is contact the new broker and have them initiate a transfer of stocks, bonds, options, mutual funds, etc. from the old broker. And opening up a new brokerage account shouldn’t have an impact on your credit score. But we’re getting ahead of ourself here. Let’s talk about what you need and how to open a brokerage account.

How to Open a Brokerage Account in a Matter of Minutes

There are all sorts of accounts out there for investors. You’ve got managed, accounts, Roth IRAs, 401ks, or 529 Plans – which are investment plans for education. But to make things crystal clear, we’re going to be explaining how to open up a straightforward brokerage account.

In this example we’ll be using Fidelity. The process starts with a simple question. Will this be an individual or joint account? Simply choose which applies to you.

You’re then asked to fill out a brief form that contains your personal information. This consists of your name, social security number, birthdate, phone number, home address and email address. If for any reason you are not comfortable submitting this information online, you can also head to a local branch and set up your account there.

If you choose the easier online signup process, once you fill out the form, you’ll be sent a page with an array of terms and conditions documents. Of course, we recommend opening, reading and saving each of these documents… Just like every other terms and conditions page we come across.

Once you agree to the aforementioned terms and conditions, your account is open and ready for business. The only real requirement that could hinder the ability to open an account is age. You have to be at least 18 in most states. But those younger than that can have their parents set up an account for them – depending on the brokerage firm. And in some instances, a brokerage might require a driver’s license, passport or another form of government-issued ID to finalize opening an account. 

You’ve Opened an Account. Now What?

Once you’ve figured out how to open a brokerage account, the next step is funding it. If you set up your account in-person at a branch location, they should be able to deposit a check for you on the spot. If you opened your account online, you’ve got a few options to choose from.

You can initiate a one-time transfer from your bank account. Here is also where you can set up a transfer of assets from an old account to this new one. There is also an option to print and mail in a paper transfer form for the old school.

One of the options we like the most though is the ability to set up recurring transfers from a bank account. This is an easy way to make sure that you’ve always got money in your brokerage account ready to be invested. You get to choose how much and how often. And you can easily make changes at any time.

However, if you’re just looking to get started as soon as possible, you can use a one-time transfer. All you’ll need is your routing and bank account number. The transfer won’t be immediate though. And it can take as long as three business days for the first transfer. But once the account is established, transfers will be much faster in the future – or offer the ability to trade on margin.

The Bottom Line on Opening a Brokerage Account

Like we mentioned above, most online brokerages vary in their overall design. But they all have the same general features for placing a trade. So, the broker’s website you chose might vary slightly from the process outlined above. But to rehash, those trying to figure out how to open a brokerage account will need to the following information:

  • Your full legal name
  • Social security number (or taxpayer ID number)
  • Address
  • Telephone number
  • Email address
  • Date of Birth
  • And possibly a form of government-issued identification

Once you’ve got all of that handy, just follow the steps above and you’ll be ready to start investing in no time at all! And for those with funds in their accounts and nowhere to invest it, we highly recommend signing up for the free Wealthy Retirement e-letter. In it, investment expert Marc Lichtenfeld helps guide readers past the pitfalls other investors make… And take a more direct path towards financial independence.

Read next: How to Trade Stocks for Beginners


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