If you are thinking of investing in the stock market or just looking to start an IRA then you need an online broker. In today’s online world there are lots of good choices, but the key things to look for are cost, convenience and customer support. Below is my summary of leading online brokers that excel in this criteria from which you should be able find at least one that meets your trading needs.
Most brokers offer similar services and have transaction fees ranging from $5 to $12. Finding the right one is a matter of visiting the sites to get a feel for the user interface (most sites have free demo’s). Pay attention to the fee structure and how it works with your trading style. Another point to note is that when you sign up for an online account you will also have to have to fund your brokerage/trading account. You should do this electronically via your normal savings/checking account.
It should take about 30 minutes to sign-up with an online broker and 2-3 days to get the funding and relevant paperwork finalized. Now comes the fun part – buying the stock. Here is my most important piece of advice before you do this – Research before you buy!!! Your online broker should have lots of free research available on the stock and you can do a simple web search to find out more information about it. Buying a stock takes less than one minute, research is where all the time and effort is spent and becoming a successful investor over the long term.
Opening an Account Online – things you should know:
- It only takes 10-12 minutes to apply online at the above brokers. You will need to complete an application form and in some cases fax/mail in to verify certain financial and identity information. There should be no costs for opening an account.
- You will need to provide your U.S. Permanent Residential Address, Date of Birth, Social Security number or Tax ID number, employer name and address. If opening an IRA, you will need your beneficiary’s (e.g. spouse) Social Security Number, address and date of birth.
- Funding the account. There are generally 4 standard ways to fund your new acccount : Wire transfer, ACH bank transfer from your existing account (best option), transfer cash or securities from an outside financial institution, mail a check.
- All of the above have an online chat or a support line which you can use if you get stuck or have questions during the application process.