What are the criteria to open an online share trading account?
Hi. May I ask what are the basic criteria to open an online share dealing account? Does it depend on how much money you have in your account? Your credit rating? Salary? I am new to this and would like to know more about it before I apply an online trading account. Thank you very much in advance.
Investing - 4 Answers
People Answers, Critics, Comments, Opinions :
Answer 1 :
Your first few answers are regular spammers. Hope you ignored them. In the US you need proper identification and sufficient cash. That's about it. Credit Rating and salary are not relevant. Most brokerage applications require that you fill out a form about your investing experience and risk tolerance. Unless you state sufficient experience, you would not be approved for certain riskier activities like margin trading or options. That's to protect both you and the brokerage.
Answer 2 :
Generically, cash to invest & tax identification. That's for the basics: you have to be identifiable to government authorities (for reporting purposes) and you have to meet the minimum investment amount for the company in question. However, accounts are subject to limits & qualification. Depending on the investment and the country you live in, there may be income, experience, credit, and additional capital ("amount in the account") requirements.
Answer 3 :
It's all a matter of having a minimum balance. For Scottrade it's $500 with a $7 fee per tranaction, and with ING it's even lower (I forget how much) with a $4 fee per transaction. I hear ING has bad customer service, and is slow to process peoples transactions though, so I wouldn't recommend them. There are other companies like TD Ameritrade, Fidelity, and E-trade, which have higher transaction fees, but still relatively low. Lastly, there are many companies like Forex.com, Zecco, etc... which allow people with relatively low amounts of money to invest in the high speed currency trade (i.e forex) market. Note to the person below, account minimums protect the investor with a low amount money, because if the amount of money is too low, then one will lose more money in transactions fees, than gains from share values increasing. This was one of the complaints of ING (sharebuilder). There are many unhappy customers of ING, which had their accounts wiped out trading, from the trading fee, because their balance was too small, and the profits were less than trading fee.
Answer 4 :
Most of these posters are full of shit. Open an account with Sharebuilder. No account minimums. They just want basic info. DOB, SS, address and such. There is no credit check. They only ask for info because they do report capital gains to the IRS. A credit check would only be performed for margin trading because you are effectively borrowing shares from the brokerage. They will ask for your investment experience. Say you are an expert so you will not have any trading restrictions.
Answer 5 :
In UK, choose a provider (typically, a Bank or Building Society), visit web site, answer questions .. see example below ... NB other answers relate to gambling ('spread betting') or USA ...
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