What is a Brokerage Account?

A brokerage account is an account you open with a broker that allows you to deposit money and use it to buy investments: stocks, bonds, funds, and more. It is the basic tool you need to participate in the stock market.

How does it work?

You open an account with a licensed broker, verify your identity, and deposit funds. Once the money is in your account you can place orders to buy investments. Those investments are held in your account and you can sell them at any time during market hours. Any cash from sales sits in your account until you invest it again or withdraw it.

What information do you need to open one?

Brokers are required by law to verify your identity before you can invest. You will typically need a government-issued ID, your address, your tax identification number, and some basic information about your financial situation and investing experience. This is not bureaucracy for its own sake. It is a legal requirement designed to prevent fraud and money laundering.

How long does it take?

Most online brokers can verify your identity and activate your account within one to three business days. Some offer instant verification. Once your account is active and funded, you can start investing.