Note: We receive a commission for purchases made through the links on this site. Our sponsors, however, do not influence our editorial content in any way.
An online brokerage account can be beneficial whether you are a new college graduate, a senior enjoying your golden years or anyone in between. Knowing what you can do with the account helps you make smart financial decisions.
Once you decide to open an online brokerage account, you will be asked several questions, including your driver’s license number, social security number and your financial information. The financial information necessary for opening the account may include your bank statements, your income and net worth. They must be answered accurately and truthfully because this information helps your broker advise you on your best options.
You will also be asked questions regarding how you want your uninvested money managed, how you will pay for transactions, and the names of anyone other than you who will have access to your account.
The online brokerage account allows you to invest money for your retirement or your children’s or grandchildren’s education. It is also a viable way to grow money that you have allocated for long-term savings. Ways to build your wealth may include trading stocks and bonds online. Account holders also trade mutual funds, certificates of deposit, options and much more. If you aren’t familiar with stock market trading, most companies have representatives who can give you information, research tools and well-informed financial advice. This information is available via online chats or the telephone, or you can visit a local branch if you live near one.
If you need the cash that you are about to invest in the next four to five years, it’s best to deposit it into a certificate of deposit, money market account or other interest-bearing account. It doesn’t belong in the stock market.
Don’t let your emotions control your online brokerage account. Think about your long-term goals, stay calm and levelheaded, and make your financial decisions wisely. Successful investors follow this method. It should be your goal to make wise decisions about your online trading and avoid speculating based on your emotions. After all, your money and financial future are at stake.