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What is a brokerage account? How to open one in 5 easy steps

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What is a brokerage account? We’ll explain that and how to open one in five easy steps! Investing in your future is easier than you may imagine, and a good way to do it is through a brokerage account. That’s how investors buy and sell stocks and mutual or exchange-traded funds. Another benefit of brokerage accounts is that they allow investors to allocate an amount of capital to increase their assets and save. Unlike other types of savings accounts, brokerage accounts allow the withdrawal of the money generated at any time: Discover how to open your first account in 5 steps!

Choose the type of brokerage account

There are different types of brokerage accounts. For example, an online brokerage account, which does not require a fixed amount of money or monthly fee for its use, offers the advantage of access to tools for the investor to learn to make sound financial decisions for their future. Another type of account is the managed one, which, as its name indicates, is monitored and managed by an expert investor. The expert will make investment decisions without having to have the prior authorization of the account holder.

Analyze the cost-benefit ratio of account features

What is a brokerage account

A brokerage account can be a tricky step for people who do not have extensive experience in buying and selling securities. Many do not understand the steps to follow in trading, so they prefer to commission these tasks. In this step, the investor will have the task of carefully analyzing the benefits obtained from the commissions to be paid, taking into account that they will vary between $0.10 and $0.65 dollars per transaction.

Organize the necessary documents

Once you have made a decision regarding the type of brokerage account you will open and the potential benefits you will obtain according to the chosen features, it is time to gather the necessary documentation to get the application to open the account approved. Most brokerage accounts require documents such as: social security number, driver’s license, employer name, address, statement of assets to be transferred to the account, and two forms specifying details related to the account.

Start the application process

What is a brokerage account

The application process is usually extensive, since it is about avoiding the commission of crimes such as money laundering or the financing of terrorist acts. For this reason, the applicant’s identity is carefully scrutinized. This, in addition to going through an interview process, you must present extensive documentation that includes your most current address and social security number. In the case of investors who are not US citizens, a residence visa will be required.

Start investing

The last step to finalize the opening of a brokerage account is to enter a certain amount of money to start investing. One option is to apply for a loan from a broker for the purchase of shares. Remember that you will always have the option of opening a brokerage account that is managed entirely by an expert investor, a service that generates a commission for the negotiations carried out for the purchase and sale of securities.

The post What is a brokerage account? How to open one in 5 easy steps appeared first on Mundo Hispanico.

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