How To Open an Online Brokerage Account in 2025

In principle, opening an online brokerage account is as simple as opening a bank account—you sign up and fund the account. However, there is one big difference: A brokerage account lets you start placing trades and investing your money in assets such as stocks, bonds, and ETFs.

Creating an online brokerage account at one of several available online brokers can be done in a matter of minutes, but not all brokers are created the same. You should take some time to study which broker can be most beneficial to you. Any new investor needs to learn how to mitigate the risk of losing money in the markets before beginning to take risks with their hard-earned money. When opening a brokerage account, all investors should ask themselves, “What are the risks, and how do I overcome them?” 

Steps Required To Open an Online Brokerage Account

Investors need to determine if they want to open a brokerage account beyond the work of saving for retirement through an individual retirement account (IRA), 401(k), or some other tax-advantaged account. Everyone should save for retirement, but those who seek to and have the ability to enhance their earnings may also want to open a brokerage account simply for generating capital gains on their investments or for a specific financial goal, such as paying for a child’s education or building wealth.

The first step, if you want to invest additional money, will be to determine whether you want to open a margin account (which allows you to instantaneously borrow money to invest with) or a cash account, which only allows you to invest the money you have. Once you have answered that question, your remaining steps include the following:

• Evaluate how a brokerage can help you manage risk
• Choose an online brokerage firm
• Apply for an account
• Fund the account once accepted
• Practice at length before buying any stocks

Step 1: Decide How You Will Use Your Brokerage Account

The key decision is whether you will implement your investing decisions with a margin account or a cash account. Using a margin account allows you to buy a larger number of shares of a stock than you can in a cash account. That’s because the margin account lets you automatically borrow money for your investment purchases. 

For example, suppose that in your margin account, you borrow funds to buy Stock XYZ, and have purchased double the shares you would have with a standard cash account. The impact on your account balance will be twice as potent as normal. If the price of XYZ drops by 10%, the value of your trading account will decrease by 20%. 

Of course, the reverse is true, and a 10% increase in the value of XYZ shares would create a 20% gain. Investors who don’t want the added volatility of results in their trading account may find using a cash account is best.

Step 2: Evaluate How the Brokerage Can Help You Reduce Risk

There are dozens of brokerages through which you can open an online account, allowing you to buy and sell U.S. stocks and other securities. The most popular ones have been given a detailed review by the Investopedia staff, because each brokerage has a different way of delivering its services. 

Some are tailored for simplicity and ease of use, while others are designed to help investors do a wide variety of research and analysis. Investors need to be able to research companies, perform due diligence, decide on asset allocation and selection strategy, and execute orders without error.

Brokers can vary widely in the number of research tools they offer, such as charts, indicators, and databases of periodicals such as Morningstar, Argus, and Barron’s. Some brokers also provide critical educational resources to help investors better understand the tools they can use. In general, the more trades you make each year, the more the quantity and quality of research tools become important to you. 

Regardless of the power and breadth of tools available to you, the trading platform needs to be easy enough for you to use so that you don’t place accidental orders.

Here are additional considerations for account holders to evaluate:   

• Brokerage account minimums: Many brokers allow you to open an account with $1,000 or less. Some even allow you to open the account without making any deposit at all (although the account might be closed after a few months if you don’t add funds). Other brokers may require $5,000 or more, but these usually offer a greater variety of services on their platforms.
• Account fees: The online brokerage industry has experienced such intense competition in recent years that trading commissions on stocks have largely been eliminated. Other kinds of fees still remain, but overall, it has become much less expensive to trade stocks through an online brokerage account.
• Account features: The most commonly required features for most investors include tools for selecting securities and the ability to track and analyze investment performance. Some investors may find it very important to be able to trade fractional shares, while others may want to access robo-advisor services. Perhaps the most important category of features includes investor education and services aimed at beginner investors, which can vary greatly from one brokerage to the next.
• Investment options: All brokerages in the U.S. offer access to U.S. stocks and exchange-traded funds (ETFs), but most have some degree of limitations on these. For instance, many don’t offer access to over-the-counter (OTC) stocks, and many may differ on the access they give to mutual funds, bonds, global securities, options, futures, foreign exchange, and cryptocurrency. Investors should carefully review each brokerage they are considering to ensure they can invest in their preferred securities.

Step 3: Choose the Best Online Brokerage Account

Once you have done a thorough review and comparison of the brokerages that have the features and investment products you want, you can select the one that best fits your needs. Your choice may be heavily influenced by how easy it is to navigate the site and additional factors such as complementary investing platforms or international requirements.

No matter how you decide, you should also carefully consider any transfer requirements that could be specific to your location or life circumstances. 

The best online brokerage accounts we’ve researched appear in the table below.

Step 4: Start the Application Process

When you apply to open a brokerage account, you’ll provide basic identification, tax, and income information to the broker. The Securities and Exchange Commission (SEC) regulates the information brokers need to acquire from clients as part of its “know your client” (KYC) verification standards.

For some of the newer brokerages, information-gathering can be more streamlined and simplified, but even the most detailed information-gathering process won’t take too long. You may be required to provide tax numbers or a copy of your government-issued ID, but even the longest such procedure seems to be complete within 30 minutes.

Step 5: Fund Your Account

Your application will be screened or reviewed by a customer service agent and usually approved within a couple of hours. However, it may take longer for unusual circumstances such as high-traffic periods or banking holidays. 

Once the application is approved, you will be given the opportunity to transfer funds from your bank accounts into your brokerage account. Here you will need the bank name, the routing number, and the account number. If you don’t feel comfortable providing this information online, the brokerage will likely give you the option of sending funds via wire transfer, although there is a charge for that service. 

Depending on which funding option you choose, your money may be available for access in the brokerage account, ranging from 24 hours to one week later.

Step 6: Simulate Your Trading Before Going Live

Investing may sound simple, but in reality, it requires a lot of discipline. In its simplest form, you buy when prices are low and sell when prices are high. But it is never that straightforward. There are many nuances and traps you can run into along the way, such as value traps, a dip becoming a falling knife, and more. Much of the process is best learned by simple trial and error. 

Thankfully, you don’t have to let those errors cause you to lose money on your investments. You can learn the art of investing by using a simulation for virtual trading. Many brokers offer simulated trading accounts, but even if the broker you select doesn’t have one available, Investopedia’s Simulator is an excellent resource for learning the basics of order entry, monitoring investments, rebalancing, and closing positions. 

Requirements for Opening an Online Brokerage Account

Just remember that when it comes time to open an application for an online brokerage account, there is some basic information you’ll want to have on hand. If you aren’t a citizen in the country where you are opening an account, additional documentation may be needed and more restrictions will apply.

Personal Information

• Legal name
• Current address
• Social Security number (or other tax ID number)
• Years of previous knowledge or experience in securities such as stocks, options, futures, or forex
• Citizenship information (if applicable)
• Military information (if applicable)

Banking Information

• Name(s) on the bank account
• Account type
• Bank name
• Routing number
• Account number

Note that information may vary for alternative transfer mechanisms.

The Bottom Line

Online brokerage accounts have become both more powerful and less expensive over the years, and great strides have been made toward simplifying onboarding procedures. Some accounts can be opened as quickly as 15 minutes or less, and funded within a day. Investors should take care to thoroughly research the kind of account features they need because getting the account open is just a small part of what you need to know to effectively invest online.