Brokerage Accounts

A brokerage account is an investment account you can open directly through a bank or brokerage firm that lets you buy and sell various investments, such as stocks, bonds, mutual funds or ETFs.

They are also known as taxable investment accounts because the money that grows in your account will be taxed when you withdraw it.

Brokerage accounts are on the flip-side of the coin from retirement accounts, such as IRAs and 401(k)s. While retirement accounts limit what age you can start withdrawing your money, brokerage accounts can be withdrawn at any time.

Because of this, brokerage accounts pair well with retirement accounts for an investor's portfolio. Ideally, once you have taken advantage of the tax benefits of retirement accounts and maxed those out, then brokerage accounts may be a good option to invest any excess cash.