Hey everyone,
Opening a brokerage account sounds like it should be complicated. It isn't — most applications genuinely take about five minutes once you know what's coming. Here's exactly what to have ready and which account type to pick.
What you'll need on hand
- Social Security number (or ITIN) — required for tax reporting on any investment gains.
- Basic personal info — legal name, date of birth, address, phone number, and email.
- Employment info — employer name and whether you or a family member works in the finance industry (a standard compliance question, not a red flag).
- A bank account and routing number — this is how you'll fund the account, either with an initial transfer or by linking it for later deposits.
That's genuinely it. No credit check, no minimum balance required at any of the major brokerages we cover in our brokerage comparison.
Which account type to pick
This is the part people get stuck on, so here's the short version:
- Individual taxable brokerage account — the default. No contribution limits, no restrictions on withdrawals, but you'll owe capital gains tax when you sell for a profit. Good for general investing outside of retirement.
- Roth IRA — you contribute after-tax money, and in exchange, all future growth and qualified withdrawals in retirement are completely tax-free. Best opened as early as possible, since time is what makes it powerful. (We wrote a full breakdown of why this matters especially for teenagers.)
- Traditional IRA — contributions may be tax-deductible now, but you pay income tax on withdrawals in retirement. Generally makes more sense if you expect to be in a lower tax bracket later than you are today.
- Custodial account (UTMA/UGMA or custodial Roth) — opened by a parent or guardian on behalf of a minor, with control transferring to the child at adulthood.
After the account is open
Funding the account doesn't mean you've "invested" yet — cash sitting in a brokerage account isn't earning anything until you actually buy something with it. If you're not sure what to buy first, our ETF explainer and free Investing Basics course both cover exactly that, and our Investor Type Quiz can help you figure out how you should be investing in the first place.
More soon,
Learn to Love Money