How To Open a Brokerage Account with Fidelity - YouTube

This video is going to be a step-by-step  tutorial showing you how to open a  

brokerage account with fidelity so  you can start trading stocks, bonds,  

mutual funds, and index funds among  tons of other investment options. And  

please hit the LIKE button or the SUBSCRIBE  button if you get value out of this video.  

First things first you need to go to fidelity.com  and once you're on the home screen > up top  

there's something called "open an account". Go  ahead and click that. So we're going to scroll  

down to open a brokerage account, click that  orange button. First question is going to be will  

this be an individual or joint account. For most  of you it's going to be individual > hit next,  

click yes or no if you already are a fidelity  customer. For me I am so I'm going to hit yes  

and it's going to have you log in with your  current username and password. Now it's going  

to ask you for your personal information so you're  going to need to plug in your birthday, your name,  

if you don't have a fidelity account you are going  to have to do this. If you have a fidelity account  

it should preload it for you and you just  need to edit to make sure that it's correct.  

Once you have your name filled out and your  mailing address it's going to ask you how many  

trades per year do you think you'll make. This  you don't actually have to answer but for most  

people it's going to be 0 to 35 trades. Then  hit save or if you're a new fidelity customer  

it'll be next. Then it's going to ask you your  employment information so just click whether  

you're employed or not and then just fill out your  occupation and what company you work for. And then  

two questions at the bottom for 99.9% of people  it's going to be no and no. It's just asking you  

do you have any relation to a publicly traded  company where you own ten or more percent or  

are you someone who's like a stock broker. Then  hit next or save and this is an area where I get  

a lot of questions about! This is asking you once  you deposit money into your fidelity account where  

do you actually want that money to sit before you  invest it? So this is before you've invested any  

stocks or mutual funds. This is just where do  you want the cash to physically sit, I would  

suggest going with the fidelity government money  market fund because this has a slightly higher  

interest rate than the other two. So while  the money sits in there waiting to be invested  

you can still have it earning some interest.  And hit yes if you want to receive financial  

documents electronically then we will hit next  or save and congratulations you made an account!  

It'll show you your account number on there, you  can save it, you don't really have to worry about  

it. When you go ahead and hit next it'll bring you  to this page where we'll talk about the account  

checklist.Now there's one really important thing I  want to point out to you on this account checklist  

page. Under the name your beneficiaries make sure  you go ahead and you add beneficiaries. You're  

going to need their full name and social security  number and you can allocate if you have multiple  

beneficiaries how much percentage of the account  you want to go to each. So if you have two people  

you can have fifty percent go to one and fifty  percent go to the other. This is super important  

if you pass away. If you have a beneficiary to the  account they're going to go ahead and get whatever  

funds you had within the account. If you don't  have any beneficiaries named within the account  

it's going to be a legal battle for anyone  that you may have wanted to get the funds  

to actually get the funds. What I like to do  is at least once a year usually in January I'll  

sit down I'll look at all my accounts and make  sure my beneficiaries are up to date. The other  

semi-important thing I'll show you on here is move  money into your account. So you can transfer money  

right from your bank account into your brokerage  account. If you've never linked a bank account to  

your fidelity you will have to go ahead and link  a bank account to do that before you can transfer  

from that bank account and if you need it broken  down in a tutorial like I'm doing right now I  

actually have a video where I was talking about  opening a roth ira with fidelity but the second  

half of the video starting at four minutes and 10  seconds... you can skip to that, I show you how to  

link a bank account and actually deposit money  into any fidelity account. And you can either  

click the box up above to go to that video or I'll  put the link in the description below. So once  

this video is done you can go ahead and you can  watch that video. Now like I talked about in the  

beginning of the video... how do the taxes work  for a brokerage account? This is important to know  

because when you pull the money out you may have  to pay taxes on it. So any money you deposit into  

a brokerage account has already been taxed through  your paycheck. That's how it got into your bank  

account. So when you move the money from your bank  account to your brokerage account the money that  

you actually invest will never be taxed again but  the profits that that money makes if you invest in  

a stock and the stock goes up - all those profits  are subject to taxes. But what kind of taxes do  

you pay on the profits? There's two types: it's  either going to be your regular income tax rate.  

So if you're a single person you make a hundred  thousand dollars a year you're going to be in  

probably the 22% tax bracket. Meaning any profit  that you make within your brokerage account when  

you go ahead and you sell those stocks- if it's  been less than one year, you're going to owe  

roughly 22% in taxes. But the special thing about  a brokerage account that you need to know about  

is what's called "long-term capital gains tax".  This is a special tax benefit that applies  

for brokerage accounts. Whatever stocks,  mutual funds, index funds... that you own  

for more than a year within your brokerage account  is no longer subject to your regular income tax.  

It's only subject to the long term capital gains  tax. Long term meaning MORE THAN A YEAR. So as  

long as you held that position for more than a  year before you sell it. You'll pay this adjusted  

tax bracket. Most people are going to pay zero  percent to fifteen percent. Which is going to be  

a lot lower than your income tax bracket. So you  could end up saving 10%-15%, in some cases 20%  

in taxes by holding your stocks for one year  and then selling them. And there's different  

limits for single filers, so if your income your  general income that you make on your paychecks  

is $40,000 to about $450,000: you'll pay 15% in  long-term capital gains tax but if you're married  

and your income is less than $80,800, you're  not going to pay any taxes when you sell your  

stocks within your brokerage account as long as  you've had them for more than a year. And the last  

really really important thing I'm going to cover  real quick is what do you actually use a brokerage  

account for? There's different ways to use one.  The number one thing I see people using them for  

is instead of just having your money sit in a bank  account earning almost no interest whatsoever you  

can put it into a brokerage account have it gain  interest for a year, two years, three years and  

then go ahead and pull it out. I see people  do this to save up for a house down payment,  

sometimes to save up for a car, I recommend saving  it for at least three years in the brokerage  

account if it's going to be less than three years  you're entering a lot of risk depending on how  

the stock market fluctuates. Another great way  to use a brokerage account is for what I call a  

"bridge account". A bridge account is to help you  retire early. So you can't access your retirement  

accounts like your 401k or your IRA until  your age 59 and a half but what if you want  

to retire before that? Well a brokerage account  functioning as a bridge account is a great way  

to do that. It'll help bridge the gap from when  you retire early until you hit age 59 and a half.  

I have a video talking all about bridge accounts  which you can click up here to watch that or I'll  

put the link in the description down below.  Thanks for watching guys go ahead SUBSCRIBE,  

hit the LIKE button if you got anything out of  this video! And I'll see you in next week's video!