How To Open Your First Brokerage Account

How do I fund my brokerage account?

Here are your options:

Bank Transfers

There is no fee to transfer money electronically to your TIAA Brokerage account from your bank account. For most accounts, you are able to add your bank account to your brokerage accountOpens pdf by logging in at .

Wire transfer

Funds wired to your TIAA Brokerage account are usually received same day. Wires must be in U.S. dollars. Sometimes the financial institution sending the wire will charge you a fee. Please provide your financial institution with the following information:

Bank of New York One Wall Street New York, NY 10286 ABA# 021000018 Pershing LLC Account #890-051238-5 For further credit to: TIAA Brokerage account title and account number (Example: Mary Smith Roth IRA A51111111)

Check Deposit

Please download the Check Deposit TicketOpens pdf. Include your Brokerage account number on the face of each check and mail to the applicable address listed below, rather than the address listed on the Check Deposit Ticket. Checks should be sent to:

Non-IRA accounts

Regular U.S. Mail:  Pershing LLC  PO Box 382121  Pittsburgh, Pennsylvania 15250-8121

Overnight Mail:  Pershing LLC  Attn: 382121  500 Ross Street 154-0455  Pittsburgh, Pennsylvania 15262-0001

IRA accounts

Regular and Overnight U.S Mail – IRA contributions:  Pershing LLC  – IRA Contribution Processing 95 Christopher Columbus Drive Attn: Imaging Center 3rd Floor Jersey City, New Jersey 07399

Regular U.S. Mail – Retirement rollover deposits: Pershing LLC – Rollover Processing  PO Box 382084 Pittsburgh, PA 15250-8084

Overnight Mail – Retirement rollover deposits: Pershing LLC – Rollover Processing Attn: 382084 500 Ross Street 154-0455 Pittsburgh, Pennsylvania 15262-0001

Regular U.S. Mail – Retirement transfer deposits: Pershing LLC – Transfer Processing PO Box 382091 Pittsburgh, Pennsylvania 15250-8091

Overnight Mail – Retirement transfer deposits: Pershing LLC – Transfer Processing Attn: 382091 500 Ross Street 154-0455 Pittsburgh, Pennsylvania 15262-0001

Direct Deposit

To establish direct deposit instructions, you will need to provide the sending party or bank the required account information. Use the TIAA Brokerage Direct Deposit formOpens pdf to assist you in establishing direct deposit instructions.

Move money from another firm

Download and complete the Incoming Transfer FormOpens pdf to instruct us on how to transfer your account from another firm to your TIAA brokerage account.

Standard Mail:

TIAA Brokerage PO BOX 1280 Charlotte, NC 28201

Overnight Mail:

TIAA Brokerage 8500 Andrew Carnegie Charlotte, NC 28262

By Stock Certificate

Many Transfer Agents now charge a fee when depositing certificates into accounts outside of the Transfer Agent. You may want to consider depositing the certificate(s) directly with the Transfer Agent and then transfer into your account at TIAA.

For more details, contact TIAA Brokerage at (800) 842-2252, weekdays, 8 a.m. – 7 p.m. ET.

Video

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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3. Consider the services and conveniences offered

Pricing isn't everything — especially for new investors. Of course, all other things being equal, it's best to find the lowest price, but here are a few other things you need to consider when picking a broker:

  • Access to research: Many brokers provide their own stock ratings, as well as access to third-party research from firms such as Standard & Poor's and Morningstar.
  • Foreign trading: Some brokers offer the ability to convert money in your account into foreign currencies in order to trade on international stock exchanges. If this is important to you, make sure the broker you choose allows this.
  • Fractional shares: This can be especially important to new investors, as you don't necessarily need to be able to afford an entire share to start investing in your favorite stocks.
  • Trading platforms: The various brokerages offer a wide variety of trading software and mobile apps, and many actually allow people to test out their platforms before opening an account. For example, Fidelity offers a demo version of its Active Trader Pro platform for prospective clients to test-drive. Also, read some reviews of brokers' mobile apps if being able to access your account on the go is important to you.
  • Convenience: Some brokerages have large networks of local branch offices you can visit for face-to-face investment guidance, while others do not. For example, Merrill Edge customers can get one-on-one advice and guidance at more than 2,000 Bank of America locations. Also, brokerages operated by banks offer customers the ability to connect their brokerage and checking accounts, transferring money between the accounts in real-time — and may offer some sort of "relationship discount" for doing so. For this reason, it's also a good idea to check if your bank has an online brokerage, even if it's not mentioned here.
  • Other features: This isn't an exhaustive list, so before you choose a broker, be sure to spend some time on its website exploring what it offers.

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.

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.

Step 4: Begin the Application Process

After you’ve settled on a broker, you still have to deal with the formality of opening an account. 

No matter which firm or type of account you choose, there is some information you’ll need to have on hand before you start the account opening process. You’ll need basic data about yourself and other account holders, such as social security number, date of birth, and address, but you’ll also be asked some questions about the nature of your employment. If you’re a U.S. resident but not a citizen, you’ll need to have your passport and residency visa handy.

Brokers are required to collect some other information so they can keep up with a set of rules referred to as “Know your client,” which are intended to prevent money laundering and the funding of terrorism. They also need to make sure that you are who you say you are to avoid being involved in identity theft. 

Some of the questions may seem nosy in nature, but U.S.-registered brokers must make these queries that help the firm create a profile of your investing experience and knowledge, to make sure that you invest in asset classes that you understand. The regulations also control the information the broker can display to you. Brokers are allowed to offer limited types of advice to self-directed investors, so the questions they pose help them classify you.

You’ll be asked how you feel about taking financial risks, along with how long you expect to hold the investments. Your tax status — single, married filing jointly, etc. — is part of this profile, as are any other assets you hold, such as a house, a checking account, or an employer-sponsored retirement account. You'll be asked for a range of your annual income as well. Don’t worry about whether your responses here are accurate to the penny or the percent. Brokers are not required to verify or update this information over the course of your relationship. Still, you can always go back into the profile area of the site and update your responses when your circumstances change, especially if you want to access additional asset classes.

If you’re uncomfortable providing this kind of information online, you can download and print out a paper application, which you’ll have to fill in and mail back, but that can delay establishing your account by at least a week. You could also walk into a branch of one of the brokers with a brick-and-mortar presence and open your account in person. However, the websites set up by brokers have a great deal of security built-in, and they also provide the fastest way of opening and funding an account.

Though brokers are all essentially collecting the same information from new account holders, the user interface and design will differ from one site to another. The entire process, once you’ve got all the required information gathered, shouldn’t take much more than 15 minutes.

A Note About Transferring Securities to a New Account

When you move an existing account, in addition to paying fees, you may also find that you cannot transfer certain securities. For example, your new broker-dealer may not accept all of the securities in your old brokerage account. In these circumstances, you may consider leaving these securities with the broker-dealer or selling these securities and transferring cash to your new broker-dealer. You probably will pay a commission or other fees in connection with any securities you sell. Depending on the type of account you held with your former broker-dealer, you may find that there are taxes, penalties or restrictions for selling or moving your securities.

Can you open a brokerage account with $100?

Yes, and in some instances you can start with less than $100. Of course, opening an account and using it are two different things, but you could get started with $100.

Opening a brokerage account: step-by-step

Step 1. Choosing the type of broker to use

As you might expect, there are many broker-dealers out there competing for your business. Some of them promise to buy and sell your investments very cheaply or even for free, while others tout the value of paying more in return for better service. You'll need to decide for yourself which type of brokerage account will best suit your investment needs.

There are many different features to look for when choosing a brokerage account: account minimums, ease of use, fees… Go Deeper ->  

Full-service brokers

Full-service brokers are licensed financial professionals who can recommend specific securities, such as a particular stock or bond, that fits your investment strategy.

Here’s how it works:

  • You tell the broker what you are trying to accomplish financially
  • The broker analyzes your investments to assess the risk, and may provide other financial services such as investment research
  • They then invest your money according to the goals you have set

Full-service brokers charge higher fees for a higher level of service.

Registered investment advisers

Unlike a low-cost brokerage account, an investment adviser charges you a percentage of assets under management. Some investment advisory services also charge by the hour in return for dispensing financial advice.

Online brokers

An online broker will allow you to invest with much lower fees. There are many of these financial institutions in the marketplace today, such as TD Ameritrade, E-Trade, Charles Schwab, and Fidelity.

Most online brokerage accounts provide several sources of investment research, although there may be a charge for this. Many online brokers also offer ready-made investment models tailored to various types of investment goals, time horizons, and risk tolerances.

Robo-Advisors

A robo-advisor is a service that uses sophisticated algorithms to manage your money in the markets, adjusting your investments over time according to market conditions. These services generally charge less than human advisors and are an easy way to invest without having to make the investment decisions yourself.

Step 2. Filling out the application

Most brokerages today have websites or smartphone mobile apps where you can place stock & options trades, talk to back-office personnel or financial advisors, or do market research on investments. You can alternatively go to a branch office in your area and fill out an application in person if you prefer.

Applying for a brokerage account is a very similar process to opening a bank account or savings account.

You will be asked to provide:

  • Your full name
  • Physical and mailing addresses
  • Social Security number
  • Tax filing status
  • Driver's license information
  • Income bracket

Brokers use this information to prevent financial crimes such as theft and money laundering. Most of these questions are required by FINRA and/or the SEC.

All brokerage firms are also backed by SIPC (Securities Investor Protection Corporation) insurance, which protects investor assets if the brokerage firm should go bankrupt.

Step 3. Choose your account(s)

There are several types of brokerage accounts that you can choose from, depending on your investment objectives. All accounts can be divided into two camps: retail accounts and retirement accounts.

Retail accounts

These are plain and simple taxable accounts with no special features. There are different types of retail accounts:

  • Cash accounts – Fully funded at all times with cash
  • Margin accounts – Allow you to borrow money from the brokerage firm to trade securities. You may be required to keep at least a certain minimum amount of money in this type of account at all times.
  • Custodial accounts – Allow you to hold money for minors. They can't access the money in the account until they reach adulthood, and you can invest the money you put in them however you like.
  • Trust accounts – If you have any type of trust, you can title your retail account in the name of the trust. The account will then become an asset of the trust.
  • 529 Plan accounts – If your state allows you to invest your 529 plan in a self-directed brokerage account, then you can open this type of account with your broker.

Retirement accounts

Retirement accounts allow investors to put away money for their retirement plan. These accounts grow tax-deferred, and early withdrawal penalties apply for funds withdrawn under the age of 59 and a half.

The list of retirement accounts that you can open at a brokerage firm includes:

  • Traditional IRAs – Contributions are tax-deductible within certain limits, and withdrawals are fully taxable at retirement.
  • Roth IRAs – Contributions are nondeductible, but withdrawals at retirement are tax-free.
  • SEP-IRAs – For self-employed investors.
  • SIMPLE IRAs – For small businesses.
  • Self-employed 401(k) plans – For sole proprietors.
  • Keogh plans – For professional practitioners, such as doctors or lawyers.

Cash management features

All brokerage accounts contain a cash account where money is automatically deposited when it is not invested. Most retail brokerage accounts today also offer other cash management features, such as debit cards and checks.

Step 4. Funding your account

Brokerage accounts can be funded in several ways:

  • Transfer funds directly from another account into your brokerage account
  • Send to broker via check
  • Send via bank transfer or wire transfer

Note: you cannot open a brokerage account with a credit card.

Step 5. Choose your preferences

When you sign up for your brokerage account, you'll also have to choose whether to receive your trade confirmations by mail or email. Most people today choose the latter option, but it will depend upon your personal preference. The same goes for your monthly statements.

Step 6. Know how you're being charged

When you start shopping for a trading platform, you will find that many online brokers offer commission-free trades. These brokers make up for the loss of commission by filling your trade orders at a higher-than-market price if you are buying or a lower price if you are selling.

If you plan on trading extensively, you may be better off paying a small commission per trade and getting filled at better prices than trading commission-free.

If you plan on placing a small handful of trades and then holding on to your picks for the long term, this may not be an issue.

When you are researching a particular broker to see whether you want to use them, be sure to compare the fees that they charge to the services that they provide. Figure out how much assistance you require in your investments, and much you want to pay for that help.

Example: You could choose a mutual fund through an online broker and buy it very cheaply, but a full-commission broker may know of a much better fund to invest in, though it will cost you more to buy. The higher cost may be worth it in some cases.

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