How to Open an Investment Account
When saving money for a long period of time, investing is considered a stronger option for creating wealth than using standard savings accounts. Investing in stocks carries inherent risk, but by spreading risk over a large number of companies and a span of years, investing is a fairly stable way to earn income on savings. In order to make investments, a private party usually needs to use a broker to make purchases and sales of assets on their behalf. Setting up an investment account allows an investor to pool his money and have it easily transferred into different investments by a broker.
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Instructions
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Determine the type of investment account that fits your needs. There are many different types of accounts, such as IRAs, which are designed to assist with saving for retirement, and 401ks, which serve a similar purpose. Other investment accounts allow the user to make live stock trades or invest in currency or commodities, which are best for advanced investors who plan on making money through active trading.
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Search on the Internet for investment accounts matching the type you want to open. Many large investment companies allow accounts to be opened online, and charge discounted broker fees for making trades through the online interface. Some popular online stock trading investment accounts are Scottrade, Etrade and Ameritrade. Fidelity and Vanguard lead the mutual fund investing market (see Resources below).
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Open an account. You will normally need to link the account with an existing checking account and deposit a minimum amount into the new investment account to get it started. The options offered in any given account can vary greatly, so researching ahead of time is the key. When it comes down to two accounts that offer similar investment options, it is usually best to choose the one with lower transaction fees.
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