Set Up a Brokerage Account |

Jun 11

Set Up a Brokerage Account in 3 Simple Steps

Reading Time: 2-3 Minutes

If you want simple instructions on how to set up a brokerage account read this post.

Set Up Brokerage Account

Before you start investing or trading you have to set up a brokerage account. This post focuses on how to get yourself discount/online brokerage firm accounts. The internet brokers are simple and cheap. The fees are usually minimal and setup is easy. This is why I like them. No frills. Basically, get them some funds and you can start making trades.

Here’s how you can set up an account in three simple steps:

1) Choose a broker. I suggest finding a solid online broker like Interactive Brokers, MB Trading, TradeKing, or Scottrade. For fractional share building I suggest Buy and Hold. Do some research and figure out the best broker for you. Just keep the trade fees down.

NOTE: I have/had accounts at IB, MBT, Scottrade, and Buy and Hold. I have heard good things about TradeKing but have not used them.

Set Up Brokerage Account

2) Fill out the application. This is online and is easy to fill out. Figure out what kind of account you want to set -up, IRA? Taxable? Will you trade securities like company stocks? What about mutual funds or exchange traded funds? There are usually a couple of forms and you’ll need to provide basic information about yourself.

This includes your social security number, name, address, etc. If you want to trade on margin you’ll have to fill out a couple of extra forms.

Set Up Brokerage Account

Most brokers allow you to fax, e-mail, or phone in an application. However, you will likely have to mail in your account application to some houses. Overall, it is pretty painless because the brokers want you to start trading. They loves them some commissions!

Set Up Brokerage Account

3) Deposits. Yes, the money! Grab your checkbook. After you have filled out the forms you’ll need to fund your account. Most brokers require a minimum deposit so keep that in mind. The amount required varies but usually starts at $1,000. You can fund using checks, electronic funds transfers, or by wire transfer.

NOTE: Keep an eye on transfer fees. Wire costs are insane! Plus, remember that some brokerage accounts provide bank type services and issue checks and a debit card.

It really is that simple to set up a brokerage account.

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