What is a Brokerage Account?

Brokerage Account Definition

A brokerage account is an investment account used to buy and sell securities such as stocks, bonds, ETFs, index funds, mutual funds. Several brokerage accounts also offer cryptocurrencies as well although crypto coins are not considered securities but instead are high risk assets.

You can transfer money into and out of your brokerage account much like a bank account but the main difference is brokerage accounts allow you to invest in thousands of different equities and cryptocurrencies.

Most brokerage accounts are referred to as taxable accounts because individual income earned from selling stocks and dividend payments are subject to capital gains tax. In contrast, retirement accounts have different tax rules and can often times be a much better tax haven than brokerage accounts

The Benefits of Brokerage Accounts

Opening a brokerage account has several benefits including:

  • You can invest as much money as you want in a wide selection of stocks, ETFs, index funds, bonds, mutual funds, and cryptocurrencies
  • You can buy and sell equities during normal market hours and cryptocurrencies 24/7 365
  • You can create a detailed investment strategy and save for future goals like buying a house, paying off debt, early retirement, or sending your children to college
  • You can save money for your future and build up a financial legacy that can be passed down to your children and grandchildren

How Brokerage Accounts Works

Many brokers allow you to open a brokerage account online and you can get started with very little money since most brokers have zero account minimums.


You will need to fund your account before making any purchases by depositing funds from your checking account, savings account, or another brokerage firm. Many brokers will transfer your assets from another brokerage for a small fee and you will receive your transferred securities within 3 to 5 business days.

Best Brokerage Accounts

Here are a few brokerage accounts that I personally use to buy and sell stocks.

[lasso type=”table” id=”1″ link_id=”5655″]

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *