Opening an Online Stock Trading Account
There are definite advantages to opening an online stock trading account. Unlike traditional brokers, online firms don’t require confusing brokerage fees and sky-high commissions. And as for convenience, it’s hard to beat the ease of researching companies, viewing your portfolio and placing orders at the click of a mouse. Read on to learn how to open an online account from the comfort of your own home.
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Things You'll Need
- Social Security number
- Employer contact information
- Mailing address
- Email address
- Checking or savings account
Instructions
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Research and compare online brokerage companies. Most require a small flat-rate commission per trade, though the amount varies by firm. Some also offer telephone or face-to-face support. Consider the amount of commission you’re willing to pay and the level of contact you expect to receive for that price. For a review of online brokerages by ConsumerSearch, see the link at the end of this article.
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Determine the type of account you will need. Most firms offer a range of options, from standard individual and joint accounts to those designed just for retirement or college savings. If you plan on actively trading futures, for example, you might consider paying extra for a high-speed account. But if you like to buy and hold, you might rather forgo this option.
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Check for hidden fees to avoid paying out more money. If you don’t log in to your account regularly, will you be charged an inactivity fee? Is there an account minimum and, if so, will you be able to maintain enough funds in the account to escape a penalty?
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Visit the website of your chosen brokerage and select the “Open account" option. Enter your personal information as prompted. You will be asked for your Social Security number, employer information, and mailing and email addresses. Other requirements vary by company. If you plan to fund your account electronically, you will need to enter your bank account and routing numbers.
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Check to ensure the entered information is correct. Read the company’s terms and conditions. If everything meets your approval, submit your information.
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Tips & Warnings
Remember to protect personal information when checking your account online. Use your own computer whenever possible and make sure security software is up-to-date. Use a strong password and always log out completely.
If you opt out of receiving paper mailings from your brokerage, make sure to print copies of transactions for your tax records.
