investing
How do I: Open an account online?
Topic: CDs AND INVESTMENTS
Who is affected: CONSUMERS AT EVERY LIFE STAGE
DEGREE OF DIFFICULTY: EASY
What you'll need: SOCIAL SECURITY NUMBER, DRIVER'S LICENSE, BANK STATEMENT, BENEFICIARY INFORMATION
What you need to know
Opening a brokerage or CD account online isn't much different from doing so over the phone or in person.Either way, you'll still need the following information:
- Social Security number.
- Driver's license number.
- Banking information (for the institution you plan to transfer cash from to fund the account).
- Social Security numbers and information for any beneficiaries.
After you assemble this information, it's time to do a little research on prospective institutions. If it's a CD account, choosing the institution is pretty easy. There are basically three questions to consider:
- Is the yield competitive?
- Is the bank FDIC-insured?
- Can I get to my money easily if I need it?
If you can answer yes to all, you've found the institution for you.
If it's a brokerage or retirement account you're after, fees are the key thing to consider. A few dollars difference in commissions, maintenance fees and the like may not seem important, but over time fees can kill your returns.
Also, most institutions require a minimum amount to invest, initially. A few will waive this requirement if you agree to set up a regular direct deposit.
Lastly, no matter the type of account, don't forget to look around the prospective institution's Web site before pulling the trigger. Ease of use can be a serious issue with online banking, and you want to make sure the Web site is well-designed and easy to use, with support available if you need it.
Step-by-step
| 1. | Go to your chosen institution's Web site. Most will have an "Open an Account" link on their homepage. |
| 2. | Choose your account type. |
| 3. | Enter your name, e-mail address, address, Social Security number and other requested information. |
| 4. | Specify details of your account, such as how dividends and other investment income will be distributed. |
| 5. | Elect how you'll fund the account (i.e., mailing in a check, setting up an electronic transfer from your bank). |
| 6. | Verify your identity. Institutions have different ways of doing this -- it may consist of confirming a deposit amount into your linked bank account, answering a series of questions about yourself, and/or printing, signing and mailing in forms. |
Investing online can have one major drawback: The tendency to want to keep constant tabs on the day-to-day fluctuations of your portfolio and react accordingly. Resist this temptation by adopting the strategy of
dollar-cost averaging, which spreads out investments over a pre-determined schedule so you can take the emotion out of your investing decisions.