How to Open a Brokerage Account in 2025
Opening a brokerage account takes about 15 minutes and requires zero experience. Here's exactly what you need, which account type to choose, and how to start investing today.
What You'll Need
Before you start, gather these:
- Social Security Number (required for tax reporting)
- Government ID (driver's license or passport)
- Bank account info (routing + account number for funding)
- Employment information (employer name, job title)
- 15 minutes of uninterrupted time
Step 1: Choose Your Broker
If you haven't picked a broker yet, here's the quick version:
- Best overall: Fidelity (no PFOF, great research, 24/7 support)
- Best for beginners: Schwab (education, branches, thinkorswim)
- Best mobile experience: Robinhood (simple, 3% IRA match)
- Best for active traders: Interactive Brokers (lowest margin rates)
See our full broker comparison →
Step 2: Choose Your Account Type
This is the most important decision. Pick wrong and you could miss out on tax benefits or face unexpected taxes.
Individual Brokerage (Taxable)
No contribution limits, withdraw anytime, but you pay taxes on gains each year.
Short-term goals, already maxing retirement accounts, emergency fund overflow
Traditional IRA
Tax-deductible contributions, tax-deferred growth, taxed on withdrawal.
Higher earners who want tax deduction now, expect lower tax bracket in retirement
Roth IRA
After-tax contributions, tax-free growth, tax-free withdrawals in retirement.
Most people under 50, expect higher taxes in retirement, want flexibility
Rollover IRA
For moving 401(k) money from old employer. Same rules as Traditional IRA.
Anyone leaving a job with a 401(k) to move
Quick Decision Framework
- Have a 401(k) at work? Max your employer match first, then open a Roth IRA
- No 401(k)? Start with a Roth IRA (up to $7,000/year in 2025)
- Already maxing IRA? Open a taxable account for additional investing
- Saving for something in <5 years? Taxable account (don't lock money in retirement accounts)
Step 3: Start the Application
Every broker's application follows the same basic flow. Here's what to expect:
Personal Information
- Full legal name (as it appears on your ID)
- Date of birth
- Social Security Number
- Home address (must be US-based for most brokers)
- Phone number and email
Employment & Financial Information
Brokers ask this for regulatory reasons. They need to assess suitability and comply with anti-money laundering rules.
- Employment status and employer name
- Job title / occupation
- Annual income (estimate is fine)
- Net worth (estimate is fine)
- Source of funds (employment, inheritance, etc.)
Investment Experience
Be honest—this determines which features you can access:
- Years of investing experience
- Experience with specific products (stocks, options, margin)
- Investment objectives (growth, income, speculation)
- Risk tolerance (conservative to aggressive)
💡 Tip: If you want options or margin trading later, indicate "some" investment experience. Brokers gate these features based on your answers. You can always request access later, but it's easier to have it from the start.
Account Features
You'll be asked about:
- Margin: Ability to borrow money to trade. Say yes even if you don't plan to use it—it unlocks instant settlement.
- Options: If you might want to trade options, request access now.
- Dividend reinvestment: Usually on by default. Good for long-term investing.
Agreements & Verification
- Review and accept account agreements
- Upload ID (driver's license or passport photo)
- Verify identity (some brokers use instant verification, others take 1-2 days)
Step 4: Fund Your Account
Once approved (usually instant to 1 day), you have several funding options:
ACH Transfer (Recommended)
- Free at all brokers
- Takes 1-3 business days
- Most brokers give instant access to $1,000-$5,000 while transfer clears
Wire Transfer
- Same-day availability
- Your bank may charge $25-$50
- Only necessary for large, urgent transfers
Account Transfer (ACAT)
- Move investments from another broker
- Takes 5-7 business days
- May incur $50-$100 fee from old broker (many new brokers reimburse this)
Step 5: Make Your First Investment
Once funded, you're ready to invest. If you're not sure where to start:
- Total market index fund (VTI, FZROX, SWTSX) — own the entire US stock market
- S&P 500 index fund (VOO, FXAIX, SWPPX) — own the 500 largest US companies
- Target-date fund (2055 Fund, 2060 Fund) — automatic diversification based on retirement year
These boring investments have outperformed most actively managed funds over the long term. Start simple, get more sophisticated later if you want.
Common Questions
How much do I need to start?
$0 at most brokers. Fidelity, Schwab, Robinhood, and others have no minimums. Some brokers offer fractional shares, so you can buy $10 of Amazon instead of needing $3,500 for a full share.
Is my money safe?
Yes. Brokerage accounts are protected by SIPC insurance up to $500,000 (including $250,000 cash). Most major brokers also carry additional private insurance. This protects against broker failure, not investment losses.
Can I have multiple brokerage accounts?
Yes. Many people have accounts at multiple brokers—maybe Fidelity for retirement and Robinhood for individual stock trading. The only limit is one Roth IRA contribution limit across all accounts.
How long until I can trade?
Usually same day. Most brokers approve accounts instantly and provide immediate access to deposited funds (up to a limit) while ACH transfers clear.
Ready to Open Your Account?
Compare brokers to find the best fit for your situation.
Compare All Brokers