How To Open Trading Account Online

How To Open Trading Account Online

Information You Will Need to Provide

Brokers generally request personal information from their customers, including financial and tax identification information. Brokers need this information to comply with laws and other regulations. Some of the information a broker will likely ask you to provide includes:

  • Your name
  • Social security number (or taxpayer identification number)
  • Address
  • Telephone number
  • E-Mail address
  • Date of birth
  • Driver’s license, passport information, or information from other government-issued identification
  • Employment status and occupation
  • Whether you are employed by a brokerage firm
  • Annual income
  • Net Worth
  • Investment objectives and risk tolerance

For additional information on why brokers require this personal information, please see “Broker-Dealers: Why They Ask for Personal Information” on SEC.gov, as well as “What to Expect When You Open a Brokerage Account”, a publication from the Financial Industry Regulatory Authority (FINRA).

How to Apply for a Brokerage Account

Applying for a brokerage account is easy. “You can do it within 10 minutes these days,” Failla says. “It’s really pretty simple.” You’ll generally need to provide the following information:

  • Your Social Security Number
  • Other personal information, including your phone number and home address
  • Your employer’s name and address, if you’re employed
  • Your annual income and personal net worth

You may have to answer other questions to verify your identity. You may also have to select a “core position,” or an account that will hold your money until you invest it, such as a money market fund or interest-earning cash account. You can change this selection after the account is open.

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Whats the difference between a brokerage account and a robo-advisor?

A robo-advisor is available with some brokerage accounts. Robo-advisors let you engage in automated trading and make investments decisions for you based on guidelines you set.

Best Platforms for Beginners: Pricing Comparison

Here’s a comparison of pricing across Fidelity, TD Ameritrade and E*TRADE. For more comparisons, use our online broker comparison tool.

Feature Fidelity Visit Site TD Ameritrade Visit Site E*TRADE Visit Site
Minimum Deposit $0.00 $0.00 $0.00
Stock Trades $0.00 $0.00 $0.00
ETF Trade Fee $0.00 $0.00 $0.00
Mutual Fund Trade Fee $49.95 $74.95 $19.99
Options (Base Fee) $0.00 $0.00 $0.00
Options (Per Contract) $0.65 $0.65 $0.65
Futures (Per Contract) N/A $2.25 $1.50
Broker Assisted Trade Fee $32.95 $25.00 $25.00

Is my money safe in a brokerage account?

You may be familiar with the Federal Deposit Insurance Corporation, or FDIC, and that it protects deposits held in FDIC-insured banks in the event a bank fails.

A similar protection exists for brokerage accounts through the Securities Investor Protection Corporation, or SIPC, a nonprofit membership organization that was created in 1970 by federal law. The SIPC protects customers of SIPC-member brokers in the event that the firm fails. Customers are covered for up to $500,000 for all accounts at one institution, including a maximum of $250,000 for uninvested cash.

It’s important to note that the SIPC does not protect you from investment losses, but rather only if your brokerage firm fails financially. So don’t expect a bailout if you see the value of your stocks or bonds decline.

Pricing and fees

Pricing

  • Stock and ETF trades (excluding penny stocks) made online and through our automated phone system are $0
  • No-load, no transaction fee mutual funds: $0 
  • No-load, transaction Fee mutual funds: $35

Fees

A $30 Household Annual Fee applies. You can avoid this fee with one of the following as of June 30 each year for all accounts in your WellsTrade household:

  • Enrollment in only electronic delivery for statements, trade confirmations, other documents, and shareholder communications (excluding tax documents/1099s)
  • Linkage to the Portfolio by Wells Fargo program
  • $250,000 or more in household balances
  • SEP IRA accounts-only households
  • Wells Fargo Private Bank accounts

Fee will be charged in September of each year.

Please see the WellsTrade Commissions and Fees for complete information.

Additional Information

$30 per WellsTrade household. A WellsTrade household is comprised solely of WellsTrade accounts with the same ownership or address. Households comprised solely of one or more WellsTrade IRA accounts are subject to a $30 IRA Custodial Fee in lieu of the $30 Household Annual Fee. If a Household Annual fee is due, the highest-value account in the client’s household that is eligible to be charged a fee will be debited in September of each year. IRA accounts will be charged only if there are no eligible non-IRA accounts in the household. If an IRA Custodial Fee is due, clients will receive a remittance notice with several payment options. If a payment option is not selected, the fee will be automatically deducted from the IRA in September of each year. Note: In the event that an annual fee results in a debit balance in the account, Wells Fargo Advisors may liquidate securities in the account to satisfy the debit, without prior notification to the client.

All accounts must be enrolled in electronic delivery to receive the following documents online only, including statements, trade confirmations, other documents, and shareholder communications, excluding tax documents/1099s. Please note that if a client elects to turn off paper delivery of these documents, they will receive these documents only via Access Online.

Refer to the Wells Fargo Bank Consumer Account Fee and Information Schedule for further information about the Portfolio by Wells Fargo program and applicable bank fees. Some brokerage accounts are not eligible to be linked to a Portfolio by Wells Fargo program, and they will not receive Portfolio by Wells Fargo program benefits. The Wells Fargo Bank Portfolio by Wells Fargo program has a $25 monthly service fee. The fee can be avoided each fee period with $20,000 or more in statement-ending qualifying linked bank deposit account balances (checking, savings, time accounts (CDs), FDIC-insured IRAs) and investment account balances (brokerage available through our brokerage affiliate Wells Fargo Advisors, Investment & Fiduciary Services, annuities, and foreign exchange). For more information, call Wells Fargo Bank, N.A. at 1-866-245-3452. Deposit products offered by Wells Fargo Bank, N.A. Member FDIC.

Wells Fargo Advisors:

  • Brokerage products and services are offered through Wells Fargo Advisors. Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC (WFCS) and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.
  • Certain brokerage accounts are not eligible.

Insurance and annuities:

  • Products are offered through non-bank insurance agency affiliates of Wells Fargo & Company and are underwritten by unaffiliated insurance companies.
  • If the annuity becomes annuitized, or a periodic payment schedule has been established, the remaining balance will no longer be eligible for qualification.

Your total household value includes all assets listed in your WellsTrade account statements, except for those shown under the “Other Assets/Liabilities” section. The grouping of accounts into a household is based on account eligibility and family relationships such as children, parents, domestic partners, and others. Certain accounts cannot be included in a household. Please call us at 1-800-TRADERS for more information and to determine whether all eligible accounts have been included in your household. It is your responsibility to ensure that all eligible accounts are included in your household.

Is online trading safe?

Online trading is safe if you use a regulated online stock broker and never invest more than you are willing to lose. Trading stocks online is inherently risky. Start with a small amount of money, read investing books, and keep it simple by buying and holding for the long term rather than trying to time the market.

Brokerage Account Fees & Commissions

Many brokerage accounts today tout their $0 commission trades, but keep in mind that this doesn’t mean all trading is free. There are other costs and fees involved beyond commissions, and you should understand the other fees and expenses charged by your brokerage. This is particularly true if you’re planning to dabble in investments such as options or mutual funds.

Take Fidelity, one of the leading online brokerages. Fidelity charges no commissions for trading stocks, options and ETFs. However, Fidelity charges a $0.65 fee for every options contract transaction, and $1 per bond or CD in secondary market trading. When considering a brokerage account, find the fee schedule and understand the costs involved with different kinds of transactions.

Some brokerages may also offer incentives for you to open an account. While this isn’t the only thing you should consider when you’re comparing firms, if you’re down to two mostly identical choices, a good onboarding incentive can tilt the scales. For instance, in May 2020, both E-Trade and Ally Invest offered new investors a $50 bonus if they deposit between $10,000 and $24,999 of new money.

Check Out Your Registered Financial Professional

If you haven’t already done so, make sure you check out the background of your registered financial professional and the firm before you open an account with them. Although a history free from registration or licensing problems, disciplinary actions or bankruptcies is no guarantee of the same in the future, checking out your registered financial professional and firm in advance can help you avoid problems. Look up your registered financial professional and firm on FINRA Brokercheck by going to or by calling toll-free (800) 289-9999.

Also make sure that the phone numbers and addresses that your registered financial professional and firm give you as their contact information are consistent with those listed in Brokercheck. Fraudulent entities and individuals have been known to steal the identities of legitimate registered financial professionals and broker-dealer firms so that they can get at your personal information!

Securities Investor Protection Corporation (SIPC)

If your brokerage firm goes out of business and is a member of the Securities Investor Protection Corporation (SIPC), then your cash and securities held by the brokerage firm may be protected by SIPC coverage up to $500,000, including a $250,000 limit for cash. If a SIPC member becomes insolvent, SIPC will ask a court to appoint a trustee to supervise the firm’s liquidation and to process investors’ claims. SIPC protection applies to most types of securities, such as stocks, bonds, and mutual funds. However, SIPC does not protect you against losses caused by a decline in the market value of your securities, and it does not provide protection for investment contracts not registered with the SEC. For additional information on SIPC please read the SEC’s fast answer on SIPC located on the SEC’s website at .

Should I Open a Brokerage Account Online?

If you feel comfortable using an online brokerage platform, then sure. Every major provider offers an intuitive and secure onboarding process. If you prefer to speak with or meet with a broker in person, you can visit a branch office of a discount or full-service broker and have them aid you in the process.

2. Compare the costs and incentives

These days, virtually all of the major discount brokers offer commission-free trading. They may also offer you a discount to reward you for certain actions, such as transferring a large investment account from another broker.

That said, it's important to review each online brokerage firm's full pricing schedule, particularly if you plan on trading anything other than stocks (options, mutual funds, ETFs, bonds, etc.), as these often come with their own costs. For example, many brokers charge a commission in the range of $0.50 to $0.75 per options contract, so even if the broker doesn't charge a base commission, options trading won't exactly be free.

Finally, many brokers offer incentives in order to attract business, and you don't need to be a millionaire to take advantage of them. I'm not saying that a good incentive all by itself should sway your decision, but it's definitely a piece of the puzzle worth taking into consideration.

What to look out for when opening a brokerage account

Pay attention to the fees when opening a brokerage account. Brokers get compensated through commissions, although many now offer commission-free trading for trading stocks. Brokers offering free stock trading include TD Ameritrade, E*TRADE and Vanguard. But often times you'll be charged for other things like management and advisory fees.Make sure to also note any costs associated with trading outside of stocks, such as mutual funds, ETFs, bonds and options.

Most brokers don't have minimum deposit requirements for opening an account. You may, however, have to reach a minimum to make investments, such as purchasing a minimum dollar amount of shares to invest in an index fund.

4. Decide on a brokerage firm

You've gathered your information about various firms' costs, fees and the conveniences they offer. For each brokerage, you should weigh the pros and cons as they pertain to your investment objectives and determine which broker is right for you.

For more information, check out our top picks for the best brokerage accounts for beginners or read our expert brokerage reviews.

What to Expect After Opening Your Brokerage Account

Once you've opened your account, you can expect to begin receiving account statements. You might receive a paper statement in the mail or an electronic statement or both.

You can also view your brokerage account trade confirmations. This allows you to make sure the trades are being carried out as you intended, and it gives you a chance to correct any errors if they occur.

Step 2: Consider the Features You Want and Their Associated Costs

There is a great deal of focus on the standard commissions for placing a stock trade, but there is more to investing with an online broker than fees. Much of that discussion evaporated in the last quarter of 2019 when most online brokers cut their equity trading fees to zero and also reduced per-leg options commissions to zero. You will still pay per-contract commissions on most options trades, and you’ll find fees that range from $0.10-$0.65 per contract at the majority of brokers.

Some “free” trades, though, come at a hidden cost. Research and news features are light (and sometimes non-existent), and you will likely get less-than-optimal fills for your transactions since the broker has to make money somewhere. Free trades are generally paid for by routing to market makers, who pay the broker for the order flow, but who do not prioritize price improvement. 

So look for a broker who has research and education features that can help you grow as an investor, especially if you are new to investing. Check out our list of Best Brokers for Beginners as a starting point. Members of this group are recognized based on their educational resources, ease of navigation, clear commission and pricing structures, portfolio construction tools, and research resources.

Form CRS: Relationship Summary

FINRA’s BrokerCheck: Get information about Wells Fargo Advisors and its financial professionals.

Common questions

What is a brokerage account?

A brokerage account is an arrangement between you and a licensed brokerage firm. Once your account is set up, you can deposit funds and place investment orders through the brokerage account, and the transactions will be carried out on your behalf. You have the freedom to invest in whatever you choose—stocks, bonds, mutual funds, and more—as you own all the assets in your brokerage account.

How do I get access to Schwab’s specialized trading platforms and support?

During the online application process you’ll be able to choose from several optional account features, including “Schwab Trading Services” which provides access to StreetSmart® trading platforms and priority access to Schwab trading specialists. (There are no fees to use Schwab Trading Services. Other charges may apply). By checking the box associated with the Schwab Trading Services account feature, you will automatically receive access. You can also call 888-245-6864 to request access.

What is the difference between a margin account and a cash account?

A margin account allows you to borrow against your eligible securities and can be helpful when you need to buy more securities, take advantage of timely market opportunities, or give yourself a source of overdraft protection. However, margin borrowing is not for everyone, and you should consider all risks and limitations before selecting this option. Learn everything you need to know about margin loans with The Schwab Guide to Margin.

A cash account only allows you to use the cash that you deposited to buy stocks, bonds, mutual funds, or other investments. This type of account presents less market risk as you are only investing assets that you already have, but can be limiting when timely opportunities or emergencies arise.

Can I trade options in my account?

You must be approved in order to trade options in a Schwab brokerage account. During the online application process, you can choose to add options trading and apply for one of four levels of approval based on your based on your objectives, experience, and financial position. 

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled Characteristics and Risks of Standardized Options. Supporting documentation for any claims or statistical information is available upon request.

How brokerage accounts work

Brokerage accounts allow you to purchase securities such as stocks, bonds and ETFs and are a great way to save toward your financial goals. A brokerage account might be used to save and invest for a specific financial goal such as paying for a child’s education, or it may just be used to build wealth over time. Brokerage accounts also typically come with a number of additional features such as access to research reports and other tools.

Unlike retirement accounts, you’ll be able to access your money at any time in a brokerage account, but will likely owe taxes on any gains on your investments, depending on your income.

As You Monitor Your Account

After you open your account, you should monitor its activity regularly. Make sure that you review all of your account statements and trade confirmations for any errors or any transactions that you did not authorize. If you see any evidence of unauthorized trading or errors, notify your registered financial professional, the financial professional’s supervisor or the firm’s compliance department immediately to further protect your rights. Make sure to take notes of any conversations you have with your firm concerning such disputes, to send in your complaints in writing as well and to keep copies of these notes and all communications related to such disputes for your records.

Ask yourself whether your investments are meeting your expectations and goals and whether your goals have changed. Do your investments still appear to be right for you, and what criteria will you use to decide when to sell?

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