5 Steps to Open an Investment Account

So you’ve decided to start investing… now what? Well, you’d be surprised how simple it is to get started. Just like many things in life, getting started is half the battle.

Let’s take a look at 5 steps to open an investment account so that you can start your journey to financial independence.

#1) Select Your Brokerage Company

Nowadays, there are so many options out there. Brokerage companies are all competing to manage your money and hold your accounts. My best advice is to take 3-4 of the most reputable companies and research them. Take a look at their FAQ page, look at their reviews, and get a general understanding of each company. There are pros and cons of each, and in a future post I’ll be doing a comparison of a couple of the major companies.

I currently use Fidelity for our retirement accounts. However, I’m a big fan of Vanguard as well and I use Capital One for our taxable investment accounts. There are benefits and downfalls of each, but for retirement, I think Fidelity and Vanguard provide a great service. I’ll be using Fidelity as the example for setting up an investment account because it’s what I’m most familiar with, however the steps are very similar to establish an account at any brokerage company.

So for this post… Fidelity it is! Go to fidelity.com and choose ‘open an account’ at the top of the screen.

#2) Determine the Type of Account

Are you starting a portfolio for retirement? If so, then a traditional IRA or Roth IRA will be the type of account for you. Are you saving for your child’s college tuition? Then the 529 account would be a great fit. Are you interested in general investing and just want a no-strings attached account to set up your investment portfolio? Then a standard brokerage account will work. There is even an option to open a “Managed Account” which means that an experienced finance professional will actively manage your investments. My personal opinion is to avoid actively managed accounts, become a financial superhero yourself and save the fees that a financial professional will charge.

Here’s a look at the account options you have at Fidelity.


#3) Personal Information

The next step is the easiest. Provide your name and personal information so that Fidelity has all of the required information necessary to hold your account. Here’s what they’ll ask for:

  • Social Security Number
  • Date of Birth
  • Confirmation of U.S. Citizenship
  • Phone
  • Email Address
  • Legal Address

Fidelity will also ask for your current employment information as well as any associations you may have that would restrict your ability to trade in certain securities.



#4) Finalize Your Account Settings and Confirm the Account

Next, you’ll have to select your “Core Position” and “Email Preferences”. Your core position is basically where you want your cash to be held. When your money is added to your account, it will be held in either an FDIC-Insured Deposit Sweep Program or the Fidelity Government Market Fund. Both options are secure and allow your cash to be available for investing. I choose the FDIC-Insured Deposit Sweep Program since it’s FDIC insured and I don’t expect to have a large amount of non-invested cash in my account.

Select your email preferences (I choose electronic communication to avoid packing my mailbox) and then review and confirm your account setup. You’ll also need to come up with an awesome username and secure password so that you can access your account online.



#5) Fund Your Account

The final step is to tie your newly established investment account to your bank account (or whatever account you will use to add funds). I set up an on-line transfer from our checking account so that we can automatically transfer funds to our Roth IRA’s anytime that we want to contribute (limited to a maximum contribution of $5,500 per year). All you need is your routing number and account number! You’ll enter your bank information, confirm ownership, and link your new fidelity account to the bank account. Fidelity is great at walking you through this process online.



That’s it! We just set up a new investment account through Fidelity online in about 10 minutes! You can now set up a diversified and balanced portfolio or better yet, select index funds to get your retirement plan underway.

Try to force yourself to make a contribution to the account as soon as you set it up. Once there’s money in the account, it will encourage you to invest it and will likely lead to more contributions and the beginning of a great journey to building net worth and financial security.  Best of luck and happy investing!


phot cred: photosteve101

Brian @ Luke1428
Brian @ Luke1428

Great overview...it really is very easy. I think more people would invest if they knew how quickly they could get started.

Financial Tour Guide
Financial Tour Guide moderator

@Brian @ Luke1428 Getting started is half the battle.  If everyone would take the time to set up and fund their accounts, they'd be well on their way to establishing an investment portfolio.

DC @ Young Adult Money
DC @ Young Adult Money

Great walk-through of the process.  I'm lazy when it comes to this.  I had a Fidelity 401k and they put your ESPP stocks into an individual account on there so....I've always used Fidelity haha.   Solely because of that!

Laura Beth
Laura Beth

This is a very informative post. Highly useful and very practical. I'm bookmarking it since I'll be opening an account soon with Fidelity.


Laura Beth

Financial Tour Guide
Financial Tour Guide moderator

@Laura Beth I'm glad it's helpful.  I've been pretty satisfied with Fidelity so far.  Their fees are slightly higher than Vanguard's but they provide great service.