Brokerage account

A brokerage account is an account opened with a broker that lets an investor buy and sell stocks, bonds, funds, and other securities. Money deposited into the account sits as cash until it is used to buy an investment, and proceeds from selling an investment land back in the account as cash.

Brokerage accounts come in different flavors depending on tax treatment, a standard taxable account has no special tax benefits, while retirement-focused accounts offer tax advantages in exchange for restrictions on withdrawing the money early.