After you’ve made the decision about which broker to help you manage your online investments, the hard work is done. All you need to do to get started is open an account and get your cash to the broker. You can do this online or through the mail.
If you’re comfortable opening a brokerage account over the Internet, the online route is definitely the way to go, because the cash can be transferred from your bank account and you can be up and running in a few hours or days. Signing up by mailing in a check and application, on the other hand, could take weeks.
Don’t be shocked by the seemingly endless number of questions you’ll be asked when setting up a new account. It’s common for the broker to ask for your social security number and other personal information. Given the sensitivity of the information you’ll be sharing, that’s all the more reason to make sure that you understand online security.
The biggest button on most brokers' Web sites is the Open an Account or Start Now button, so you won’t have trouble finding it. Typically, that’s all you need to click to launch the area of the Web site that can set up your account. (If you want to sign up through the mail, click a link to download the necessary forms.)
Typically, you need to know three things to complete the application:
The kind of account you want to create: This is usually a cash account or margin account.
The number of people associated with this account: Is this just for you or for you and a spouse? This determines whether you create an individual or joint account.
The tax status of the account: Is this a taxable account or a tax-deferred account, such as an IRA or a fund for college?
Most brokers waive maintenance fees if you’re opening an IRA account because they figure you’ll keep your money with them for quite some time. Many also waive the minimum deposits. For these reasons, if you’re just starting out with online investing, you might consider opening a retirement account first.
You need these bits of info if you want to set up an account:
Identification, such as a driver’s license or government-issued ID card.
A Social Security Number is necessary, of course. If you’re creating a joint account, you’ll also need the Social Security Number of the person you’re setting up the account with. This is used for tax-reporting purposes.
The bank statement of the financial institution from which you’ll transfer money. This contains the account and bank routing numbers you’ll need to instruct the broker to get your cash. Keep in mind that some brokers won’t let you open an account with electronically transferred money if you’re depositing less than $500. In those cases, you need to mail a check.
The address of your employer if you’re an officer, director, or large shareholder of a publicly traded company.
See, that wasn’t hard. And here’s the best part: Now that you’ve entered all your information and funded your account, you are all set to start investing.
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Source:http://www.dummies.com/how-to/content/how-to-open-your-brokerage-account.html
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