What is a brokerage account?

A brokerage account is an investment account held at a licensed brokerage firm. An investor deposits funds into their brokerage account and the brokerage firm transacts orders for investments such as stocks, bonds, mutual funds, and exchange-traded-funds (ETFs) on their behalf.

What is a broker and how does it work?

The broker acts as a lender, and the borrowed funds allow for larger trades and more advanced trades, such as short-selling a stock. The investor pays interest on the loaned amount of money. The brokerage may demand an immediate deposit of funds from an investor if the value of their account drops below a specified level due to market behavior.

What is a brokerage account minimum?

An account minimum is an amount you would need to deposit into the brokerage account just to open it. An investment minimum might be found in an index fund, in which you would have to buy, say, $1,000 in shares to take part in the fund. Should I open an IRA or a brokerage account?

How many brokerage accounts can I have?

There is no limit on the number of brokerage accounts you can have, or the amount of money you can deposit into a taxable brokerage account each year. There should be no fee to open a brokerage account. NerdWallet's ratings are determined by our editorial team.