How to open online brokerage account


No matter what your level of investing experience, don't be shy or intimidated—it's your money. Here's a list to get you started. The brokerage firm that you open an account with may not be the one that sends your account statements.

You may open an account with an introducing firm , which makes recommendations, takes and executes your orders and has an arrangement with a clearing and carrying firm , which is the one to finalize "settle" or "clear" your trades and hold your funds or securities. There are also firms that take and execute orders and settle trades. If you work with an introducing firm, you may receive statements from the clearing firm. Find out what type of firm you open an account with and who will send you the account statements.

You will receive an account statement at least once every calendar quarter. Whether the securities are registered in your name or in the name of the brokerage firm can affect how soon you receive your dividends and interest, the ease with which you can sell your securities and the types of communications you receive directly from the issuer of the securities, among other things.

After you open your account, you should monitor its activity regularly. Make sure that you review all of your account statements and trade confirmations for any errors or any transactions that you did not authorize. If you see any evidence of unauthorized trading or errors, notify your broker, broker's supervisor or brokerage firm's compliance department immediately to further protect your rights.

Make sure to take notes of any conversations you have with your firm concerning such disputes, to send in your complaints in writing as well and to keep copies of these notes and all communications related to such disputes for your records. Ask yourself whether your investments are meeting your expectations and goals and whether your goals have changed.

Do your investments still appear to be right for you, and what criteria will you use to decide when to sell? Information You'll Be Asked to Provide When you decide to open an account, there will be paperwork to complete. In a new account application, along with other information, you'll likely be asked to provide your: Social Security or other tax identification number: Like banks, credit unions and other financial institutions, brokerage firms must report to the Internal Revenue Service the income you earn on your investments.

Driver's license or passport information, or information from other government-issued identification: Employment status, financial information—such as your annual income and net worth—and investment objectives: Collecting this information helps your broker to fulfill regulatory obligations.

In addition, the information can help your broker determine suitable investment recommendations for you. Note that the terms used to describe investment objectives often vary across brokerage firms and new account applications. You might hear terms such as "income," "growth," "conservative," "moderate," "aggressive" and "speculative.

Make sure that you describe your financial goals, how much risk you are willing to take with your investments and when you expect to need access to the funds in your account as comprehensively as possible. Effective February 5, , new account forms may include a section asking you to provide information for a trusted contact person. Your broker might ask for this information in a conversation or via email as well. You should expect to be asked to provide the name, address and telephone number s for a trusted contact person that your brokerage firm may contact about your account.

While you are not required to provide this information to open an account, it may be a good idea to do so. By choosing to provide this information, you are authorizing the firm to contact such person and disclose information about your account in certain circumstances, including to address possible financial exploitation, and to confirm the specifics of your current contact information, health status, or the identity of any legal guardian, executor, trustee or holder of a power of attorney.

You also will receive a written disclosure from the firm that lays out these details. Decisions You'll Be Asked to Make The new account form will also ask you to make some important decisions about your account, including how you will pay for your transactions, how any uninvested cash will be managed and who will have control over and access to your account.

Do you want a cash account or margin loan account? Most brokerage firms offer at least two types of accounts—a cash account and a margin loan account customarily known as a "margin account". In a cash account, you must pay for your securities in full at the time of purchase. In a margin loan account, although you must eventually pay for your securities in full, your broker can lend you funds at the time of purchase, with the securities in your portfolio serving as collateral for the loan.

This is called buying securities "on margin. There are risks that arise from purchasing securities on margin that do not come with most other types of loans. For example if the value of your securities declines significantly, you may be subject to a "margin call.

The brokerage firm decides which of your securities to sell. Even if the firm gives you notice that you have a certain number of days to cover the shortfall, the firm still may sell your securities before that timeframe expires.

Also, the firm may change, at any time, the threshold at which customers can be subject to a margin call. Be sure to read carefully your new account application and any other documents that your broker gives you about margin loan accounts. Be sure that you understand how these accounts work before you sign up for one.

With some firms, you sign up for a margin loan account by default unless you indicate otherwise on the application. If you have opened a margin account, but you pay for your securities in full at the time of purchase, you incur no more risks than you would in a cash account. No "Margin" for Error.

How do you want to manage your uninvested cash? Sometimes there is cash in your account that hasn't been invested. For example, you may have just deposited money into your account without giving instructions on how to invest it, or you may have received cash dividends or interest.

Your brokerage firm typically will automatically place—or "sweep"—that cash into a cash management program customarily known as a "cash sweep" program. On your new account application, your brokerage firm may ask you to select a cash management program. The subject line of the email you send will be "Fidelity. Need help choosing an account? Complete a saved application. Download a paper application.

To transfer assets to Fidelity from another firm, first open a compatible Fidelity account. Skip to Main Content.

Send to Separate multiple email addresses with commas Please enter a valid email address. Your email address Please enter a valid email address. Open an Account It's easy—opening your new account takes just minutes. Most Popular Accounts All Accounts. Open a Traditional IRA. Open a Roth IRA. Open a Brokerage Account.