In principle, opening an online brokerage account is as simple as opening a bank account—you signꦰ up and fund the account. However, there is one big difference: A brokerage account lets you start 🥃placing trades and investing your money.

Creating an online brokerage account at one of several available online brokers can be done in a matter of minutes, but you should take some time to study which broker can be of the most help to you. Any new investor needs to learn how to mitigate the risk of losing money in the markets before beginning to take risks with their hard-earned money. When opening a brokerage account, all investors should ask themselves, “What are the risks, and how do I overcome them?” 

Steps Required To Open an Online B༺rokerage Accou🧜nt

Investors need to determine if they want to open a brokerage account beyond the work of saving for retirement through an 澳洲幸运5官方开奖结果体彩网:individua♏l retirement account (IRA), 401(k), or some other tax-advantaged account. Everyone should save for retirement, but those who seek to and have the ability to enhance their earnings may also want to open a brokerage account simply for generating 澳洲幸运5官方开奖结果体彩网:capital gains on their investments or for a specific financial goal such as paying for a child's education or 澳洲幸运5官方开奖结果体彩网:building wealth.

The first step if you want to invest additional money will be to determine whether you want to open a 澳洲幸运5官方开奖结果体彩网:margin account (which allows you to instantaneously borrow money to invest with) or a cash account, which only allows you to invest the money you have. Once you have answered that question, your remaining steps include t𓆏he following:

• Evaluate how a brokerage can help you manage risk
• Choose an online brokerage firm
• Apply for an account
• Fund the account once accepted
• Practice at length before buying any stocks
  

ജStep 1: Decide How You Will Use♉ Your Brokerage Account

The key decision is whether you will implement your investing decisions with a 澳洲幸运5官方开奖结果体彩网:margin account or a cash account. Using a margin account allows you to buy a larger number of shares of a stock than you can in a cash account. That’s because the margin account lets you♎ automatically borrow money for your investment purchases. 

For example, suppose that in your margin account you buy all possible shares of Stock XYZ. You will have purchased double the amount of shares that you might be able to buy in a cash account, so that the impact 💮on your account balance will be twice as potent as normal. If the price of XYZ drops by 10%, the value of your trading account will🐎 decrease by 20%. 

Of course, the reverse is true and a 10% increase in the value of XYZ shares would create a 20% gain. For investors who don’t want the added volatility oꦬf results in their trading account, using a cash account is ꦦbest.

Step 2: Evaluate How the Brokerage Can Help You ✃Reduce Risk

There are dozens of brokerages through which you can open an online account allowing you to buy and sell U.S. stocks and other securities. The most popular ones have been given a 澳洲幸运5官方开奖结果体彩网:detailed review by the Investopedia staff, because each br🌊okerage has a different way of delivering its services. 

Some are tailored for simplicity and ease of use, while others are designed to help investors do a wide variety of research and analysis. Investors need to be able to research companies and perform 澳洲幸运5官方开奖结果体彩网:due diligence, decide on an 澳洲幸运5官方开奖结果体彩网:asset a🃏llocation and selection strategy, and execute orders without error.

Brokers can vary widely in the amount of research tools, suc🅰h as charts, in💞dicators, and databases of news reports, that they provide. Some brokers also offer critical educational resources to help investors better understand the tools they can use. In general, the more trades you make each year, the more the quantity and quality of research tools becomes important to you. 

Regardless of the power and breadth of tools available to you, the 澳洲幸运5官方开奖结果体彩网:trading platform needs to be easy enough for you to use so that you don’t place accidental orders. Here are additio🐻nal considerations for account hol☂ders to evaluate.   

• Brokerage account minimums: Many brokers allow you to open an account with $1,000 or less. Some even allow you to open the account without making any deposit at all (although the account might be closed after a few months if you don’t add funds). Other brokers may require $5,000 or more, but these usually offer a greater variety of services on their platforms.  
• Account fees: The online brokerage industry has experienced such intense competition in the past few years that trading commissions on stocks have largely been eliminated. Other kinds of 澳洲幸运5官方开奖结果体彩网:fees still remain, but overall it has become much less expensive to trade stocks through an online brokerage account.
• Account features: The most commonly required features for most investors include tools for selecting securities as well as the ability to track and analyze investment performance. Some investors may find it very important to be able to trade 澳洲幸运5官方开奖结果体彩网:fractional shares, while others want to access 澳洲幸运5官方开奖结果体彩网:robo-advisor services. Perhaps the most important category of features includes investor education and services aimed at beginner investors, which can vary greatly from one brokerage to the next.    
• Investment options: All brokerages in the U.S. offer access to U.S. stocks and 澳洲幸运5官方开奖结果体彩网:exchange-traded funds (ETFs), but most have some degree of limitations to these. Many don't offer access to over-the-counter (OTC) stocks and each may differ on the access they give to mutual funds, bonds, global securities, options, futures, foreign exchange, and 澳洲幸运5官方开奖结果体彩网:cryptocurrency trades. Investors should carefully review each brokerage they consider to be certain they can invest in their preferred securities.

Step 3: Choose the Best Online B🍎rokerage Account

Once you have done a thorough review and 澳洲幸运5官方开奖结果体彩网:comparison of the brokerages that have the features and investment products you want, you can select the one that best fits your needs, and appears to be easiest to use for what you want to do. Your choice may be heavily influenced by additional factors such as complementary investing platforms or international requi🌄rements.

N𝔉o matter how you decide, you also should carefully consider any transfer requirements that could be specific to your location or life circumstances. 

The best 澳洲幸运5官方开奖结果体彩网:online brokerage accounts we've researched appear in the table below.

Step 4: Start the Application Process

When you apply to open a brokerage account, you’ll provide basic identification, tax, and income information to the broker. The Securities and Exchange Commission (SEC) regulates the information brokers need to acquire from clients as part of its "澳洲幸运5官方开奖结果体彩网:know your client" (KYC) verification standards.

For some of the newer brokerages, information-gathering can be more streamlined and simplified, but even the most detailed information-gathering process won’t take too long. You may be required to provide tax numbers or a copy of your government-issued ID, but even the longest such procedure seems to be complete within 🐟30 minutes.

Step 5: Fund Your Account

Your application will be screened or reviewed by a customer service agent, and usually approved within a couple of hours. It may take longer for any unusual circumstances such as high-trﷺaffic periods or banking holidays. 

Once the application is approved, you will be given the opportunity to transfer funds from your bank accounts into your 澳洲幸运5官方开奖结果体彩网:brokerage account. Here you will need the bank name, the 澳洲幸运5官方开奖结果体彩网:routing number, and the account number. If you don’t feel comf෴ortable providing this information online, the brokerage will likely give you the option of sending funds via wire transfer, although there is a charge for that service. 

Depending on which funding option you choose, your money may 💃be available for access in the brokerage account ranging from 24 hours to one week later.

Step 6: Simulate Your Trading Before Going Live

Investing may sound simple, but in reality it requires a lot of discipline. In its simplest form, you buy when pജrices are low and sell when prices are high. But it is never that straightforward. There are many nuances and traps you can run iꩵnto along the way, and so much of the process is best learned by simple trial and error. 

Thankfully, you don’t have to let those errors cause you to lose money on your investments. You can learn the art of investing by using a 澳洲幸运5官方开奖结果体彩网:simulation for virtual trading. Many brokers offer simulated trading accounts, but even if the broker you select doesn't have one available, 澳洲幸运5官方开奖结果体彩网:Investopedia’s Simulator is an excellent resource for learning the basics of order entry, monitoring investments, 澳洲幸运5官方开奖结果体彩网:rebalancing, and closing positions. 

R꧃equirements for Opening an 🌺Online Brokerage Account

Just remember that when it comes time to open an application for an online brokerage account, there is some basic information you’ll want to have on hand. If you aren't a citizen in the country where you are opening an account, additional documentation may be needed and more restrictions will apply.

Personal Information

• 澳洲幸运5官方开奖结果体彩网:Legal name
• Current address
• Social Security number (or other tax ID number)
• Years of previous knowledge or experience in securities such as stocks, options, futures, or forex
• Citizenship information (if applicable)
• Military information (if applicable)
  

Banking Information

• Name(s) on the bank account
• Account type
• Bank name
• Routing number
• Account number

Note that information may v⛄ary for alternative transfer mechanisms.

The Bottom Line

澳洲幸运5官方开奖结果体彩网:Online brokerage accounts have become both more powerful and less expensive over the years, and great strides have been made toward simplifying onboardi🉐ng procedures. Some accounts can be opened as quickly as 15 minutes or less, and funded within a day. Investors should take care to thoroughly research the kind of account features they need because getting the account open is just a small part of what you need to know to effectively invest online.