|
How
to open brokerage account?
There
are lots of brokerage firms out there. Each of them will likely
tell you that they can offer more for your investing dollar than
any of their competitors can. But when you get right down to it
and you're ready to start investing, what should you look for in
a broker and what do you need to do to get set up?
Know
Yourself
One of
the first questions you'll want to ask yourself when you start your
search for a broker is, "Which brokers will let me open an
account ?" Some brokers have restrictions that limit who will
be able to open an account with them. These restrictions usually
boil down to age and money.
Age. If
you're young and interested in investing, keep in mind that in order
to open your own brokerage account, you'll need to be a legal adult
(usually 18 years old). If you're not considered a legal adult yet,
you can still invest, but your parents will need to set up a custodial
account with your broker.
A custodial
account is essentially an account set up for a minor where the parents
bear the legal responsibilities on behalf of the minor. With a custodial
account, you'll still be able to trade stocks just as you would
with your own account, except that Mom's and Dad's names will be
on the account as well.
Money.
Another thing you'll have to think about is the minimum account
balance required by your broker. Most brokers require a minimum
account balance for the same reason that banks do: They make money
by lending your cash out to other customers in exchange for interest.
Because it's expensive for a broker to maintain your account, they
have to be sure that you're bringing in enough incremental revenue
to cover the expenses of having you as a customer. As points of
reference, minimum balances for online discount brokers are usually
between $500 and $1,000.
Know
Your Broker
Deciding
whether or not a broker meets your needs is just as important as
figuring out if you meet the broker's criteria for doing business.
Important things you'll want to know about a broker:
•
Can you walk into the broker's office and get one-on-one help?
•
Does the broker even know what they're doing?
•
How can you get money into your account?
Continued
on next page 
Next
steps page 2
|
