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How to open a Brokerage Account?

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Let's get started how do you open a Brokerage account?  First you need to pick a company.  I will make a few recommendations but I do not in anyway endorse which company you choose to use and do not receive any type of payment or have any type of contract with these companies other than I will recommend the company I also choose to open my account with. 

These companies would be for online discount Brokers:

Ally Bank
Charles Schwab
Scott Trade
ETrade (Also Capitol One's online investing accounts are moving here if you bank with Capital One you may consider them)

Full Service Brokers:

Edward Jones

We will be focusing on discount self managed online Brokers in this article.  The purpose of this blog is to teach you Wall Street and sound financial investment and decision making that from my perspective; you do not need someone to watch over your investment portfolio but they are of course available as an option.  Just like in my disclaimer if you feel the need to always seek the council of a licensed investment advisor before making any financial decisions.

I choose Ally they offer $4.95 on Trades and currently are offering different cash bonus amounts added to your account up to $3,500 in cash!  Charles Schwab has a minimum, requirement of $1,000, ETrade $500, and $6.95 cost per trade.  Fidelity $4.95 no minimum also.

Why Ally?  They impressed me, like they have as a Bank I also like the low cost of their Options contracts at $0.65 per contract.  We will not be going into detail just yet on Options on this website other than to explain what they are and how they work.

You can access their website at:

Click on the banner for $4.95 Trades / Self-Directed Trading
Click Start Trading
Enter Your Name and Email select if you are new or existing customer
Select type of Account: Individual, Joint, or IRA (has restrictions see previous article on what it is)
Enter Personal Information on next page
Next page is going to ask you questions regarding (Insider information) if it does not apply say no
Now it will ask about Employment (This is required do to other Insider Trading Laws)
Next Page will ask your Brokerage Trading history & Income answer honestly this will help you in future from investing in something to risky or something you don't understand without them requiring additional information.  It is perfectly ok to say you have no options experience for example they will restrict you from the sales.
Next Question it will ask you do you want Margin capabilities (borrow against the stock) and Options capabilities answer honestly if you don't know what those are say no you can add later if you want too.
Next READ and accept agreements
Electronically Sign and Date
Connect your bank account (this will require additional step)


Now it will take some time to fund the account and to get up and rolling but it works just like a savings or checking account.  Example you invest $500 it will sit in a interest paying mutual fund until you decide to trade so you trade 5 shares of XYZ for $490 + $4.95 commission you will still have $5.05 in your mutual fund.

Keep in mind funding the account and taking proceeds from the account generally takes about 3 business days it is not as fast access as a checking account but be aware of this if you need to withdraw funds quickly.

I am sure there is not much difference on any of the Brokers websites to sign up for an account.


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