Tutorial: How to Open an Investment Account

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Investing is one of the keys to preserving and building your wealth. The earlier you start, the longer your money has time to compound and the more it can potentially grow. But you don’t want to just hand over your money to some mutual fund or hedge fund and hope that their investment strategy works. You want to do your own online trading and online investing yourself. Today’s post is going to be a step-by-step walkthrough of how to open an investment account. Filled with screenshots of the actual process and tips along the way, this tutorial is aimed to be as comprehensive as possible. Let’s get into it!

Requirements

Before we get into the tutorial, there are a few things you need to have/be to actually start investing. Just make sure that you can check these things off and you’re good:

  • At least 18 years old (or managed to convince your parents to use their identity)
  • A valid SIN (social insurance number)
  • A bank account with more than 0 dollars in it
  • A phone and/or a computer

Have all of these? Sweet! You’re ready to open an investment account.

1. Choose Your Brokerage

It is vitally important to choose the right brokerage if you are to have a smooth and successful investing journey. Personally, my first TFSA experience was a nightmare because I was lazy and didn’t do my research. Don’t be like me: conduct some research into which brokerage platform you should choose and read the fine print.

If you’re in Canada, I suggest looking into these three brokerages:

These are also the three online brokerages that I tried. Each one has its own benefits and drawbacks, but in the end, I ended up settling with Wealthsimple. Again, this was a purely subjective choice and it really came down to me liking the accessibility I had from my phone and also the simple design of Wealthsimple. You may find that you completely disagree, and that’s ok. Just make sure to find the brokerage which is right for you.

After deciding on a brokerage, you can decide on whether or not to invest in a TFSA. I go into more detail about TFSAs here, but they are basically just accounts that let you save tax on any money you make from investing. If you don’t have one yet, I highly recommend investing within a TFSA until you hit the contribution limit per year (usually $6000.) Questrade and Wealthsimple offer these and so do most banks.

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How to open an investment account (also make sure to pick the right account; steer clear of margin accounts or accounts managed by others)

2. Get Your Information Ready

Once you’ve settled on a brokerage company and investment account (TFSA or not), you’ll want to get a few things ready. Here they are:

  • Your SIN number
  • Information about where you live
  • Personal information (although I’d hope you know your own first and last name)
  • Banking information
How to open an investing account; Wealthsimple screenshot

If you’re close to 18 years old, your parents will probably know what your SIN is and you can request banking information from your bank. Other than those two things, there’s not much you need to open an investment account.

3. Fill Out the Required Information

This step is pretty self-explanatory. Go to whichever brokerage you chose, visit their website, and fill out the information. Make sure that the information is accurate, otherwise, it might take a LOT longer for your application to go through.

Especially be wary of your SIN number as if you get this wrong, it could be a while before you hear back from the brokerage. Also, be sure to type in the right bank account information. Banks and brokerages are notoriously slow, so you don’t want to add any additional time that could be spent investing and making money!

4. Deposit Money

Once you’re all set up with an account, it’s time to deposit some money! For now, I would recommend only investing with what you can afford to lose. If you need $500 for next week’s rent payment and only have $550 in your bank account, do NOT deposit more than $50 into your brokerage. Especially considering the fact that deposits into and withdrawals from brokerages usually take upwards of 5 days.

Again, this is a step that requires some thinking. “Hmm, how much can I really invest and be 100% totally ok with if I lost all of it?” Do not exceed that limit (for now.)

The actual process of depositing money shouldn’t be too difficult. Brokerages want your money (business to them!) so they’ll likely make the deposit button very big and accessible for you to find. Here’s what it looks like in Wealthsimple:

How to open an investing account

If your brokerage is like Wealthsimple, you’ll be able to link your bank account directly. But if it’s like Questrade, you’ll need to “pay a bill.” Don’t worry, this is a relatively simple process as well. Just log into your online banking and follow along with the instructions that your brokerage gives you.

5. Pick Some Companies

After you deposit your money, it should appear in your account balance within a week or so. Now’s where the fun begins!

The world is your oyster when it comes to stocks. There are SO many investment options out there. As long as the company is public, you can buy one of its stocks! I have found that when chatting with people about stock-picking, they often don’t listen much and walk away from the conversation with the same beliefs they had when they entered. “Thanks for your financial advice, but I’m still going to be day-trading AMC and Gamestop. Market volatility? Never heard of it!”

So, I can only offer these 4 tidbits which MIGHT yield some regard:

  1. If you’re doing risky stuff, only invest what you are absolutely ok with losing (see how that earlier tip of not putting in money you can’t lose came in handy).
  2. If you’re investing substantial amounts of money for the long-term, either do it in index funds or do tons and tons of research about a company before you buy.
  3. Don’t trade stocks. It doesn’t matter if you’re an option trader, active trader, or (worst of all) a day trader, statistically speaking, traders lose money (less than 2% of people trading stocks beat the market).
  4. Do not go on margin. Going on margin means borrowing money to invest with. You could make a ton of money from margin trading but you could also go bankrupt very fast. Don’t even risk it and don’t open a margin account to begin with if you want to be safe.

These 4 rules + a healthy dose of diversification + a buy-and-hold mindset are what I follow when building my own investment portfolio and help to guide me when I buy stocks. Not to say that this is investment advice, but if I had to dish any out, that would be it.

Congratulations!

If you’ve followed these steps, you should now have a fully functioning investment account where you can buy and sell stocks. You can now try out all sorts of investing strategies and see which one works for you. For those of you who skipped to the bottom for a recap, here it is:

  1. Choose your brokerage
  2. Get your bank information ready
  3. Fill out the required information
  4. Deposit some money
  5. Pick some stocks and securities!

Hopefully, you’ve managed to follow these steps and are ready to invest your money. It honestly doesn’t quite matter which one of the investment strategies you choose (dividend investing, a diversified portfolio, a concentrated portfolio), as long as you stick with it and get good at it. You should now be well on your way to achieving your financial goals through investments. If you HAVEN’T followed along and opened a brokerage account yet, I’d suggest you open an account as soon as possible. Your future self will certainly thank you!

Did you find this post helpful? Should I do more tutorials? What’s the best online brokerage in your opinion? What content do you enjoy the most? What do you want to see written about on this site? Let me know in the comments!


Thanks for reading through How to Open an Investing Account Tutorial and thank you for following along. If you’re still working on accumulating money that you can invest with and want to learn about how to build income opportunities as a student, head over to this post here. If you want to learn more about me, head over to this link here. Finally, if you want to get exclusive updates and tips, drop your email in the “get updates” box (might have to scroll up a bit.) Let me know your thoughts and suggestions in the comments!

4 Comments

  1. Thank you so much for this! I turned 18 recently and used this guide – it saved me tons of time and research 10/10 would recommend.

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