Friday, June 29, 2007

Opening Your Account: The Process

Opening an account varies a bit from brokerage firm to brokerage
firm. But the basic process is the same. You must first
access the Web site for the brokerage firm. You then find a
link that says something like open an account now (this link
is unsurprisingly easy to locate) and perform some variation
of the following steps:

1. Complete a secure online application. The application asks
you questions like your Social Security number, whether
you’re opening a joint account, and other information necessary
to get you set up on the company’s system.

2. Return your signed application by mail. Some firms
allow you to receive an account number and begin trading
right away, but your signed application must be
received within three days of your first trade.

3. Fund your account. You can get money into your
account by mailing a check, providing a credit card number,
or authorizing the brokerage to create an electronic
check from an existing account, depending on the policies
of the brokerage.

Should you open more than one brokerage account? On one
hand, you want to avoid opening more accounts than you
need, because this tactic can increase fees. On the other hand,
the Gomez Advisors recommend that you consider opening
a second account with a smaller, less-heavily-trafficked brokerage
firm if your primary account is with a popular firm
that may experience periodic capacity overloads and transaction
delays.

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