Before you begin to build your fortune by investing in the stock market, you will have to open a brokerage account. This is an account opened with a brokerage that supplies them with a fund of money to invest on your behalf in stocks, bonds, mutual funds or other investment packages. Most brokerages require a minimum balance to be maintained on the brokerage account. This minimum balance will vary according to the brokerage, but it is typical to require at least a $500 to $1000 minimum balance in your brokerage account. This amount can be even lower for IRA's, or some other special circumstances such as retirement or education accounts.
Opening a brokerage account is a fairly easy process; most financial institutions will allow you to fill out the application online, or print and mail it in with your check for the opening balance. Once you open your account, you can begin trading. Brokerages charge a fee per trade, which is called a "commission." Commissions vary depending on what type of brokerage you choose, but they can be as low as $5 or $10, or hundreds of dollars if you are working with a very high-end brokerage. Discount brokerages and online brokerages tend to be cheaper than traditional brokerages, since they only execute your orders to trade and do not provide additional personalized money management services and advice. Many traditional brokerage firms, such as Charles Schwab or Merrill Lynch, will offer both types of services depending on what type of investor you want to be.
Before you open your brokerage account, read the terms of service and make sure you understand the minimum balance requirements, any minimum trade requirements, and any other various service fees you might be charged for that is provided by the brokerage. You should compare services, as well as fees in order to choose the best brokerage for your needs.
