How Much Money Do You Need to Open an Investment Account in the Stock Market?

How Much Money Do You Need to Open an Investment Account in the Stock Market?
••• Jupiterimages/BananaStock/Getty Images

If you are new to investing in the stock market, you probably have questions about how to get started and how much to invest. Deciding how much money you need to open an investment account in the stock market largely depends on your investment goals and the strategy you plan to use. Initially, you can get started investing in the stock market with as little as $50.

Broker-Assisted Investing

If you decide to open an investment account through a professional stock broker, you can expect to carry a higher minimum account balance than a self-directed account. Some brokers require investors to maintain $5,000 to $10,000 in their account. Charles Schwab, for example, requires a minimum $1,000 balance for customers opening a brokerage account as of 2011. The minimum balance may be waived for customers who also open a companion checking account or establish a monthly transfer of at least $100 through direct deposit.

Self-Directed Investing

Choosing self-directed investing over investing with a broker can reduce your start-up costs substantially. Self-directed brokerage accounts are widely available through companies such as Scottrade, Sharebuilder and Etrade. You can open a stock investment account with no money or as little as $50 to $100. With these types of accounts, you conduct your own stock investment research, fund your account and then place your own trades through the trade platform provided with your account. Your account is charged a set commission anywhere from $4 to $16 for each trade you make, as of 2011.

Choosing an Investment Amount

Deciding how much money to start investing with is entirely up to you. If you have a sum of money you wish to grow for the future, it might make sense to invest that money in a combination of stocks, bonds and mutual funds. Even if you don't have significant disposable income, you can still invest. Fund your account with $10, $50 or $100 as your budget allows, and purchase the shares you wish to own when you can afford them.

Additional Fees

Weigh the options carefully whether you decide to use an investment adviser or conduct your own trading through a self-directed brokerage account. In addition to commissions for buying and selling stocks, some brokers charge a broker fee to assist you with trades and make stock recommendations. Others may also charge commission based on the profitability of trades made on your behalf. In addition, some brokerages charge monthly account maintenance fees and transaction fees for calling customer service or requesting a copy of your account statement.