In order to buy and store assets like stocks, bonds, ETFs, and mutual funds, you will need a brokerage account. Brokerage firms help their clients invest by buying and selling securities on the market. Your brokerage account securities are held as custodian by the company.

Brokerage accounts can be either tax-free retirement accounts or taxable investment accounts. You can open either type with a broker, but the funds in each will be treated differently at tax time.

Dividends, interest, and capital gains from a taxable brokerage account are subject to personal income tax and capital gains tax. Your taxable brokerage account is unlimited in terms of deposit size. See our selection of top-rated online brokerage services.

You can save for your golden years by opening either a standard or a Roth individual retirement account (IRA). You have the option of opening either a solo 401(k) or a SEP IRA if you are self-employed. You should familiarize yourself with the various plans' tax and contribution limits and regulations. In addition, there are requirements for opening an account and making a deposit. Here are the steps that will teach you how to open your first brokerage account.

Choose the Type of Brokerage Account You Need

Consider your preferred method of investment when making your broker selection. Do you wish to maintain a position of daily market dominance? Or do you like to invest in a way and then forget about it?

Think about the kinds of assets you know how to trade, or would like to learn how to trade, if you want to keep active in the markets. The majority of people who invest have money in stock, ETFs, or mutual funds. There are many self-directed online brokers that provide a wide variety of resources to aid in the selection of suitable tactics for option trading.

Consider the Features You Want and Their Associated Costs

Although common stock trade commissions receive a lot of attention, there is more to investing with an online broker than just fees. Most online brokers eliminated stock trading costs and per-leg options commissions in the fourth quarter of 2019, putting an end to much of the debate. Most options trades still include per-contract costs, with typical fees ranging from $0.10 to $0.65 at most brokers.

If you are just starting out as an investor, you should find a broker with robust research and educational tools.

Choose the Brokerage That Best Fits Your Desired Needs

If you have any in-depth inquiries for a broker's support team, do not be shy about using the Chat feature that many of them offer. You could test out the quality of service given by phoning a dedicated new customer support line.

Commissions & Fees for Brokerage Accounts

While it is true that many brokerage accounts now offer "no commission trades," this does not mean that trading is always without cost. You should be familiar with all of the fees and charges levied by your brokerage, not just the commissions. This is especially the case if you are thinking of trading options or investing in mutual funds.

One of the most successful online brokers is Fidelity. Trading stocks, options, and ETFs at Fidelity incurs no commission fees. However, Fidelity assesses a $1 fee for trading bonds or CDs on the secondary market and a $0.65 fee for trading options contracts. Locate the fee schedule and learn the costs associated with various types of transactions when thinking about a brokerage account.

To entice you to register an account, several brokerages may provide bonuses. Although this is not the only factor you should think about when deciding between companies, a competitive onboarding bonus may be the deciding factor if you are down to two otherwise similar options.

Start Investing Today by Funding Your New Account

In order to access your account online, you will need to create a user ID and password when your account has been activated.

You must fund your trading account before you can begin making trades. You can do a few things, but the simplest is to connect your brokerage account to your bank account. You will need both your ten-digit account number and your bank's nine-digit routing number. The routing number can be located on the bottom of a check, on the bank's website, or through the American Bankers Association's online routing number lookup.

You may also submit a check by mail, though doing so will add a week or so to the time it takes to activate your account. When you link your brokerage account to your bank account, you can easily transfer funds between the two accounts. By law, brokers in the United States cannot accept credit card payments for brokerage accounts.

You can arrange a monthly transfer of funds from your checking account to your brokerage account with several brokers. To individuals who are saving for retirement or any other future event, we recommend this. The best way to utilize technology is to form the habit of making weekly deposits.