Brokerage accounts help you invest. Before opening a one, you should know the most basic account types offered: cash, margin, and option accounts. These accounts allow investors with different levels of risk tolerance to invest in a variety of ways.

Questions or Comments?
Have a question or topic you’d like to learn more about? Let us know:
Twitter: @ZionsDirectTV
Facebook: www.facebook.com/zionsdirect
Or leave a comment on one of our videos.

Open an Account:
Begin investing today by opening a brokerage account or IRA at www.zionsdirect.com

Bid in our Auctions:
Participate in our fixed-income security auctions with no commissions or mark-ups charged by Zions Direct at www.auctions.zionsdirect.com
…(read more)

LEARN MORE ABOUT: IRA Accounts

INVESTING IN A GOLD IRA: Gold IRA Account

INVESTING IN A SILVER IRA: Silver IRA Account

REVEALED: Best Gold Backed IRA

When it comes to investing in the stock market, one of the first decisions you’ll need to make is what type of brokerage account to open. A brokerage account is a type of financial account that allows you to buy and sell stocks, bonds, mutual funds, and other securities. There are three main types of brokerage accounts: cash accounts, margin accounts, and retirement accounts.

1. Cash Accounts:
Cash accounts are the most basic type of brokerage account. With a cash account, you can only buy securities with the money you have in the account. You cannot borrow money or use leverage to make trades. This makes cash accounts a safer option for beginner investors who want to avoid the risks associated with borrowing money to invest.

One of the main advantages of a cash account is that you don’t have to worry about margin calls or interest charges. However, the downside is that you may miss out on potential investment opportunities if you don’t have enough cash on hand to make a trade.

2. Margin Accounts:
Margin accounts are a type of brokerage account that allows you to borrow money from your broker to buy securities. With a margin account, you can leverage your investments by using borrowed funds to increase your buying power. This can potentially lead to higher returns, but it also comes with a higher level of risk.

Margin accounts require you to maintain a minimum balance in the account at all times to cover any potential losses. If the value of your investments falls below a certain level, you may receive a margin call from your broker asking you to deposit more money into the account or sell some of your holdings to cover the losses.

3. Retirement Accounts:
Retirement accounts, such as Individual Retirement Accounts (IRAs) and 401(k) accounts, are a type of brokerage account specifically designed for saving for retirement. These accounts offer tax advantages, such as tax-deferred growth or tax-free withdrawals, depending on the type of account.

One of the main benefits of retirement accounts is that you can save for retirement while potentially reducing your tax liability. However, there are also restrictions on when you can withdraw funds from these accounts without incurring penalties.

In conclusion, there are three main types of brokerage accounts: cash accounts, margin accounts, and retirement accounts. Each type of account has its own advantages and disadvantages, so it’s important to carefully consider your investment goals and risk tolerance before choosing the right account for you. Whether you’re a beginner investor looking to test the waters with a cash account or a seasoned investor looking to leverage your investments with a margin account, there’s a brokerage account out there to suit your needs.