Brokerage Account

Loading the player...

DEFINITION of 'Brokerage Account'

An arrangement between an investor and a licensed brokerage firm that allows the investor to deposit funds with the firm and place investment orders through the brokerage, which then carries out the transactions on the investor's behalf. The investor owns the assets contained in the brokerage account and must usually claim as income any capital gains he or she incurs from the account.

BREAKING DOWN 'Brokerage Account'

There are several different types of brokerage accounts and brokerage firms; investors are able to choose the type of brokerage account and broker that best suits their financial requirements. Some full-service brokers provide extensive investment advice, charging high fees for their efforts, while most online brokers simply provide a secure interface through which investors can place trade orders and, therefore, charge relatively low fees for their services. Brokerage accounts can also differ in terms of order execution speed, analysis tools used, scope of tradable assets, and the extent to which investors can trade on margin.

RELATED TERMS
  1. Full-Service Broker

    A broker that provides a large variety of services to its clients, ...
  2. Suspense Account

    In accounting, the section of a company's books where unclassified ...
  3. Discount Broker

    A stockbroker who carries out buy and sell orders at a reduced ...
  4. Broker

    1. An individual or firm that charges a fee or commission for ...
  5. Margin Account

    A brokerage account in which the broker lends the customer cash ...
  6. Minimum Deposit

    The smallest amount of money that an investor/trader must initially ...
Related Articles
  1. Mutual Funds & ETFs

    Buying Vanguard Mutual Funds Vs. ETFs

    Learn about the differences between Vanguard's mutual fund and ETF products, and discover which may be more appropriate for investors.
  2. Retirement

    Best Ways to Save For Retirement Without an IRA or 401(k)

    Learn the most common types of savings vehicles used to accumulate money for retirement outside employer-sponsored 401(k)s or IRA accounts.
  3. Investing Basics

    What's a Brokerage Account?

    A brokerage account is a contractual arrangement between an investor and a licensed securities broker or brokerage.
  4. Investing Basics

    Picking Your First Broker

    If you're a rookie investor, your first big investment decision should be an informed one.
  5. Brokers

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  6. Mutual Funds & ETFs

    How To Include ETFs In A Client's 401(k)

    Learn how ETFs can solve an advisor's litigation and fee disclosure fears.
  7. Options & Futures

    The 4 Ways To Buy And Sell Securities

    Know the four main avenues of buying and selling investment instruments.
  8. Options & Futures

    Don't Let Brokerage Fees Undermine Your Returns

    Smart investors don't give away more money than necessary in commissions and fees. Find out how to save.
  9. Entrepreneurship

    Tips For Boosting Your Business

    Find out how butter up new clients, build up old files and better your bottom line.
  10. Active Trading Fundamentals

    4 Stocks With Bullish Head and Shoulders Patterns for 2016 (PG, ETR)

    Discover analyses of the top four stocks with bullish head and shoulders patterns forming in 2016, and learn the prices at which they should be considered.
RELATED FAQS
  1. What is the smallest amount of shares I can buy?

    There is no minimum amount of shares that need to be bought in a single transaction, so an investor can purchase as little ... Read Full Answer >>
  2. How are Registered Retirement Saving Plans (RRSPs) taxed?

    A registered retirement savings plan is a tax-deferred retirement plan that is registered with the Government of Canada. ... Read Full Answer >>
  3. What is the "three-legged stool"?

    The "three-legged stool" was a retirement terminology from the past that many financial planners used to describe the three ... Read Full Answer >>
  4. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  5. What is the 'Rule of 72'?

    The 'Rule of 72' is a simplified way to determine how long an investment will take to double, given a fixed annual rate of ... Read Full Answer >>
  6. What is a stock split? Why do stocks split?

    All publicly-traded companies have a set number of shares that are outstanding on the stock market. A stock split is a decision ... Read Full Answer >>
Hot Definitions
  1. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  2. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  3. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  4. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  5. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
Trading Center