Brokerage Account

AAA

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.

INVESTOPEDIA EXPLAINS '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. Form 1099-B

    A form issued by a broker or barter exchange that summarizes ...
  3. Margin Account

    A brokerage account in which the broker lends the customer cash ...
  4. Brokerage Window

    The ability to direct trading within a brokerage's offering through ...
  5. Account

    1. An arrangement by which an organization accepts a customer's ...
  6. Financial Supermarket

    An institution or company that offers a wide range of financial ...
Related Articles
  1. Retirement

    How are Registered Retirement Saving Plans (RRSPs) taxed?

    Learn about registered retirement saving plans, and find out how the Government of Canada provides tax benefits for those saving towards retirement.
  2. Investing Basics

    Picking Your First Broker

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

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  4. 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.
  5. Options & Futures

    The 4 Ways To Buy And Sell Securities

    Know the four main avenues of buying and selling investment instruments.
  6. 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.
  7. Retirement

    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 most common sources of retirement income for a retiree during retireme ...
  8. Entrepreneurship

    Tips For Boosting Your Business

    Find out how butter up new clients, build up old files and better your bottom line.
  9. Investing Basics

    What is the simplest kind of company stock?

    Learn about the simplest type of stocks. Explore growth and dividend investing strategies and examples of companies whose shares are available for investment.
  10. Trading Strategies

    How effective is creating trade entries after spotting a Three White Soldiers pattern?

    Understand the basics of the three white soldiers pattern and what conditions are optimal for creating effective trade strategies based on this reversal pattern.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center