What Refers to the Brokerage Account and How Can You Open It - PowerPoint PPT Presentation

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What Refers to the Brokerage Account and How Can You Open It

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There are different types of brokerage accounts on the market. While some offer costlier yet full brokerage services, others charge a reasonable rate for high-quality brokerage service. In this post, we'll walk you through the meaning of the brokerage account and the steps to open one. Let's start with the meaning. – PowerPoint PPT presentation

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Title: What Refers to the Brokerage Account and How Can You Open It


1
What Refers to the Brokerage Account and How Can
You Open It?
2
  • For those who have decided to invest their
    hard-earned money in stocks and commodities,
    opening a brokerage account is going to be your
    first step to entering the investment market. An
    investment account is completely different from
    the bank account (where the regular monetary
    transaction takes place). When you open an
    investment account, you become eligible to
    purchase stocks, mutual funds, and bonds. You
    cannot purchase stocks or other investment
    products without opening a valid brokerage
    account.
  • There are different types of brokerage accounts
    on the market. While some offer costlier yet full
    brokerage services, others charge a reasonable
    rate for high-quality brokerage service. In this
    post, we'll walk you through the meaning of the
    brokerage account and the steps to open one.
    Let's start with the meaning.

3
What is a Brokerage Account?
  • A brokerage account is used to purchase
    investment products. You can open this account
    with a licensed brokerage firm or an investment
    company. As soon as your account is approved and
    your deposit the money, you can purchase stocks
    and other investment products.
  • You can use the deposited money to purchase
    investment. Once you purchase the investment, you
    become the owner of it. The purchased stocks can
    be sold anytime. In simple terms, the broker acts
    as the middleman who connects you to the
    investment companies and provides a platform for
    stock trading. Brokerage account will allow you
    to purchase different types of investment
    products ranging from stocks to mutual bonds.

4
How Do Brokerage Accounts Work?
  • Mostly, the brokerage firm or investment company
    will allow you to open a trading account easily.
    To fund this account, you need to deposit money
    from your savings account to the brokerage
    account. The process might take up to weeks. The
    user can switch their brokerage firms if they are
    unhappy with the current company. You can even
    transfer all your investments and money from one
    brokerage account to another.
  • Users don't need a significant amount of money to
    create an account with a reputable brokerage
    firm. In fact, some companies allow you to get
    your brokerage account set up without an initial
    deposit. But, you will need to deposit money for
    purchasing investments. Make sure that the
    brokerage account does not involve any fee. Even
    though these firms simplify your investment
    process and provide a flexible trading service,
    they charge no fee. Moreover, you can open as
    many brokerage accounts as you want.

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Brokerage Account vs. Retirement Accounts - Which
One you Must Choose?
  • A typical brokerage account is also known as a
    taxable account. That said, you don't get to
    receive any tax benefits from such accounts.
    Mostly, the tax is charged on your yearly
    profits. As an advantage, you get to withdraw
    your earnings anytime you want. Plus, there is no
    limit on buying investments.
  • However, a taxable account isn't a suitable
    option for individuals who are investing in their
    retirement. There's a special retirement account
    such as IRA, which is mainly developed to benefit
    the user whose sole purpose of investment is
    retirement savings. These are tax-saving
    accounts. But, they also come with certain
    limitations such as how much you can deposit
    every year, when you can pull out the money, etc.

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  • You will want to reconsider your choice if you
    are opening an account for retirement purposes.
    Since the IRA account offers a tax-saving
    advantage, it can be the best option for
    investors. At the same time, your money will be
    invested for several years (5-10). So, choose
    wisely.

7
How Can You Pick the Perfect Brokerage Account
Platform?
  • Now that you have decided which account amongst -
    taxable brokerage and Retirement account you
    want to open, it is time to pick the service
    provider. Currently, Robo-advisors and online
    brokers are in high demand. Lets see which one
    can fit your requirements.
  • Online Brokerage Account
  • Do you want to invest and handle your money on
    your own? If yes, then an online brokerage
    account can be a perfect choice.
  • By opening an investment account with a licensed
    brokerage firm, you can purchase and sell
    investment products through their website.

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  • Managed Brokerage Account
  • Managed investment accounts either involve a
    human advisor or a Robo-advisor. It is a perfect
    option for beginners who are not familiar with
    brokerage platforms and investment products. The
    Robo-advisors are less costly than a human
    investment manager.
  • These companies use advanced computer algorithms
    to pick the right investment option considering
    your risk portfolio and investment objectives.

9
How to Open a Brokerage Account?
  • Opening a brokerage account is as simple as
    completing a short application form (which takes
    around 10-15 minutes to complete). As soon as
    your investment account starts, you can fund it
    by depositing a certain amount of money. You
    don't have to worry about the account opening or
    funding process since the broker will guide you
    throughout the process. Once you have deposited
    the money, you can purchase investments.
  • While opening an account, the firm asks the user
    if they want to stick to the cash account or open
    a margin account. A margin account may seem a
    reliable option, however, it comes with its share
    of risks. While it lets the user borrow a certain
    amount of money from the broker to purchase
    stocks or mutual funds, the user might end up
    paying a heavy interest rate or broker fee in
    return. That being said, it is best to choose the
    cash account (especially, if you are new to the
    investment world).

10
Are You Ready to Invest?
  • The stock market might be the most unpredictable
    markets. But, it gives you the long-term benefit
    by multiplying your investment in a short period.
    Not everyone is ready to invest a significant
    portion of their earnings for retirement life.
    After all, the stock market is all about
    uncertainty and risks. Some people want to have
    cash in hand to stay prepared for the unforeseen
    expenses. Sure, you must have some cash in hand.
  • Note that stock investment is a viable option for
    those who are ready to bear the risk and secure
    their financial future or life after retirement.

11
  • Contact Us
  • For complete information about commodity trading,
    get in touch with our trading experts specialized
    to offer investing in commodities.
  • Gill Broking
  • Phone No 011-40345555, 8750000121
  • Address B-98-99, Third Floor, Lajpat Nagar-1,
    New Delhi, India 110024
  • Email ID support_at_gillbroking.com
  • Website - https//www.gillbroking.com

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