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First you need to start by deciding what type of account you want, and then comparing several online stock brokers, you should be able to choose the one that best meets your needs.

1. Determine the type of brokerage account you need

What are your investment objectives? If you simply want to invest for a rainy day or for a certain relatively near-term goal, and don't necessarily want your money tied up until you retire, a traditional brokerage account is the way to go. These accounts don't have tax advantages – you may have to pay tax on investment profits and dividends – but you are free to withdraw your money whenever you'd like.

If you choose a cash account, your broker will likely ask if you want margin privileges, which basically means that you can borrow money to buy stocks, with the stocks in your portfolio serving as collateral. You'll pay interest on the borrowed money, and there are some inherent risks involved with investing on margin that you should be aware of.

On the other hand, if your goal is to save money for retirement, an IRA is the best bet. Traditional IRAs can get you tax deductions when you contribute to them, but you won't be able to use your money until you're 59-1/2. Contributions to Roth IRAs don't give you a tax benefit when you make them, but qualified withdrawals will be tax-free. Plus, you can withdraw Roth contributions (but not your investment profits) whenever you want.

Finally, if you're self employed, there are some special options for you, such as a SIMPLE IRA, SEP-IRA, or individual 401(k). If you're specifically looking for an IRA, check the description for a link to our guide to help you pick the best IRA.

2. Compare the costs and incentives

Some major brokerages charge commissions, some don't. The costs have generally been coming down for the average investor, but you need to know what you're signing up for so that fees don't eat up all your returns.

It's also important to review the brokers' full pricing schedule, particularly if you plan on trading anything other than stocks, such as options, funds, bonds... as these often come with their own costs. For example, many brokers charge $0.75 per options contract on top of their standard commission rate.

3. Consider the services and conveniences offered

Pricing isn't everything -- especially for new investors. Of course, all other things being equal, it's best to find the lowest price, but here are a few other things you need to consider when picking a broker:

Brokerages operated by banks offer customers the ability to connect their brokerage and checking accounts, transferring money between the accounts in real-time – and may offer some sort of "relationship discount" for doing so. For this reason, it's also a good idea to check if your bank has an online brokerage, even if it's not mentioned here.

This isn't an exhaustive list, so before you choose a broker, be sure to spend some time on its website exploring what it offers.

4. Decide on a brokerage firm

You've gathered your information about various firms' costs, fees and the conveniences they offer. For each brokerage, you should weigh the pros and cons as they pertain to your investment objectives and determine the best overall option for you. For some expert recommendations, check out our list of the best online stock brokers at Fool.com/brokers -- the link's down in the video description.

5. Fill out the new account application

You can apply to open a new account online. You'll need some identifying information, such as your Social Security number and driver's license. You may need to sign additional forms if you're requesting margin privileges or the ability to trade options, and the broker will need to collect information about your net worth, employment status, investable assets, and investment goals.

6. Fund the account

Your new brokerage will probably give you a few options to move money into your account.
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When funding your new account, be sure to keep your broker's minimums in mind. Many have different minimums for taxable accounts and retirement accounts, and they also may have different minimum requirements for margin accounts.

7. Start researching investments

Congratulations on taking the initiative and opening a brokerage account -- your future self will thank you for taking this important step on the road toward financial security.

Now comes the fun part: investing.
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