Introduction to investing

Fernando J. Saballos, Contibutor

So you’re eager to play the stock market, or you want to put your money into a 401k or IRA and let it grow for retirement. Maybe you’re a risk taker and want to do your finest impersonation of a Wall Street broker by day trading on the market from open till close. Whatever your method is, you must have a brokerage account in order to do so, and oftentimes, prospective investors can’t figure out how to get started. The process of trading is actually quite simple, but having the appropriate criteria to open an account is the real hurdle, especially for college students with limited funds.

Let’s start with a definition: brokerage account. A brokerage account is an arrangement between an investor and a licensed brokerage firm that allows the investor to place investment orders through the brokerage firm.

So where can you open a brokerage account? There are countless firms to choose from, and sifting through all of them in order to find the right fit can be the most daunting task. It’s similar to choosing a bank for your checking and savings needs. You want to entrust a firm to provide you with the highest-quality services, resources and considerations.

The standard for opening an account is having an initial minimum balance. Fidelity National Financial, for example, requires a $2,500 minimum and adds a $7.95 commission fee to each stock trade. E*Trade Financial requires a $500 minimum but adds a $9.99 commission fee to each stock trade. The Charles Schwab Corporation requires a $1,000 minimum and adds an $8.95 commission fee.

Though I had nowhere near the $1,000 minimum balance, I decided to choose Schwab because the enrollment offered terms were too good to pass up. Typically, commercial banks charge fees when funds are below a certain amount. But by opening a joint-checking and -brokerage account, I did not have to maintain the minimum balance. Schwab allows for a $0 checking and a $0 brokerage minimum.

In addition to an enticing deal, the perks I receive are extraordinary. The debit card attached to my checking account reimburses worldwide ATM fees. Another cherry-on-top: my checking account also bears a variable rate interest income. While the percentage is a microscopic 0.06 percent at enrollment, it still beats the interest income on my Whitney Bank checking, which is 0.

Due to my excellent relationship with Schwab, my opinion remains biased, but other companies like Fidelity, E*Trade and TD Ameritrade offer a variety of similar services and perks. Your decision will ultimately be based on what personally appeals to you, whether it’s lower fees or expanded research tools.

Establishing a comfortable relationship with your brokerage firm is crucial to your success as an investor. For side-by-side comparisons of the top brokers available, visit The site compares account minimums, fees, investment securities, and even the quantity of commission-free funds available.

It is important to always keep in mind that money in the market is not FDIC insured, meaning if your account value decreases, the company is not liable for any loss. However, joint-checking and -savings accounts, such as mine, are FDIC insured and safe from harm.