How to Choose the Best Bank Account for Trading Stocks and Shares

Richard Montana | October 17, 2022

If you are considering trading stocks and shares, you will need a good brokerage account and a good understanding of basic trading.

You will also need to choose the right bank account.

First Off, Choose a Brokerage Account

To begin trading stocks and shares, you will need to open a brokerage account where you can buy stocks, shares, and other securities like bonds, mutual funds, options, and exchange-traded funds.

You can open a standard brokerage account or opt for a full-service brokerage account, to purchase stock in publicly traded companies.

But a brokerage account is not the same as a bank account. Indeed, with a typical bank account, you cannot purchase stocks and shares. But you do have the opportunity to open an account with an investment bank, which focuses on stocks and other investment products.

Many full-service investment banks offer a broad range of business and investment services. Some also own or affiliate with consumer banks.

Pick a Bank Account That You Can Easily Link to Your Investments

While you might want to consider opening an account with an investment bank, if you are just starting out with trading stocks and shares, it is probably easier to simply choose a good standard bank and transfer the funds you want to use for investing to your brokerage account.

Therefore, all you really need to do is to pick a good bank account that you can easily link to your investment account.

The key thing you need to look for is a bank that enables you to send funds to your brokerage account without delay.

If you suddenly find a fantastic investment opportunity to buy stocks or shares, you will want to make sure that you can instantly send funds to your brokerage account from your standard bank account.

But you will also want to ensure that the bank account you open has other perks. For instance, when you sign up sofi bank account, you can get up to 2.50% APY, there are no account fees or overdraft fees to pay, and you can even cash in on up to $300 when you sign up and create a direct deposit.

When you choose a bank account that works for you, you can save money and have more funds to spend on your investments.

Look for a Bank Account That Does Not Charge Fees for Sending Money

When looking for a standard bank account from which you can send funds to your brokerage account, you should also look for an account that does not charge fees for sending money.

If you intend to regularly send money from your standard bank account to your brokerage account, the last thing you will want is to pay fees on every transaction, as those amounts can soon add up.

How to Start Trading Stocks and Shares

Once you have chosen a broker and you have a bank account from which to transfer funds, you can begin trading stocks and shares. But you should first spend some time researching the best investment strategies to try and get the best returns.

You should also spend time determining how much you can afford to invest. Have a set amount that you are comfortable with and can afford to invest, and ensure you do not go over your limit.

Then, research and analyze specific stocks and shares that you could purchase and trade.

With the groundwork taken care of, you can place your trades. You can either create a market order, which enables you to transact at whatever the best price is at the current time, or you can create a limit order, which lets you transact only at the price you specify, or at a better price.

Then, track your stock and shares so that you can take appropriate action to get the most out of your investments.

About the Author

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Richard Montana
Richard has many years of experience in broker research, testing, analysis and reviews. He knows what to look for through years of trading himself with different brokers and listening to the feedback of others.

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