How to Start an Investment Account
Investing your money is one way to watch it grow over time. Your money then works for you. Investment account options include either savings types of accounts or brokerage accounts. This article will show you how to start an investment account.
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Instructions
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Decide on an account type. You can choose either a savings account or a brokerage account. An example of a savings account would be a certificate of deposit. Brokerage accounts allow you to invest in stocks, bonds and mutual funds to name a few. Savings accounts are generally insured by the FDIC. Brokerage accounts offer no guarantee on your money, but give you the chance to realize a higher return on your investment.
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Choose a place to open the account. For a savings account or certificate of deposit, you can choose any bank or financial institution. For a brokerage account, you have a few different options. One option is to use an online brokerage company, such as Scottrade. A second option is to go directly through a company that offers mutual funds, like T Rowe Price. Your third option is to find a local brokerage company, like Edward Jones, where you can meet in person with an investment advisor.
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Determine the amount of money you have available to fund the account. If you are investing in stocks and mutual funds, don't invest more than you can afford to lose, at least for the short term.
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Contact the brokerage company or your bank and schedule an appointment to open your investment account. Most banks and brokerages will want you to meet with them personally to open the account. Some companies may allow you to open the account online, and mail you a signature card so your signature is on file.
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Fund the account. When you meet for your appointment, you will be asked for either cash or a check to fund the account. If you open the account online, you will be required to send a check or wire money for the initial deposit. Subsequent deposits can often be made electronically, where a deduction comes out of your checking account.
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Tips & Warnings
Make sure to monitor your brokerage account on a regular basis. If you own stock in a company about to go bankrupt, you will have the chance to sell before the stock loses most of its value, for example. To find out more about FDIC guarantees on your savings accounts, visit the FDIC website listed in the resources.
It is wise to talk to a financial expert before investing any money.
