Here in Fooldom, we often talk about how to manage your investments and brokerage accounts. But you might be wondering about an even more basic matter -- how to open a brokerage account in the first place. If so, read on.
First off, as you consider brokerages, pay attention to the difference between full-service and discount brokerages. Examples of full-service brokerages include Merrill Lynch
Once you've appropriately researched your broker alternatives and decided which one is right for you, you'll probably want to go ahead and open the account (rather than simply resting on your laurels for having done your homework).
Opening an account doesn't require much more than filling out an application, and we haven't heard of anybody getting turned down. Being approved to open a margin account (i.e., an account that permits you to borrow money from the broker) might be a problem if you have a horrible credit history. But opening an account that is funded entirely by your own cash is most likely going to be approved.
You simply download the application forms, sign them, enclose them in an envelope with a check to fund your account, and you'll receive confirmation of your ability to start trading in pretty short order. Voila! Or, if you prefer, most services allow you to complete the application and fund the account online. It really doesn't get any easier than that.
The application will ask you to choose among different types of accounts, which we explain here. And to start investing, you don't need much more than your computer, some moola, and a bit of investing know-how (where we may be of assistance).
Learn much more about brokerages and find one that's right for you in our Broker Center. We even have a helpful broker comparison table with information about account minimums, commissions, fees, and extras for TD Ameritrade, ShareBuilder, E*Trade, and Fidelity. (Did you know that some well-regarded discount brokerages are offering commissions as low as $4?) Armed with this knowledge, you're all set to open a brokerage account. Happy investing!
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