Howdy Wall St. Willy! I heard my parents talking about a Brokerage Account. But what is a brokerage account anyway?
Well, where does the money to buy stocks or ETFs or the other things come from?
You have to fund the brokerage account from your checking or savings account, which means you take money out of your checking or savings account and deposit or put that money in your brokerage account.
Is there any fee for opening or maintaining a brokerage account?
There’s usually no fee to open the account. But some brokerages do charge a yearly fee, which is a fee that you pay every year for being able to use the brokerage account.
But some brokerages also have a minimum amount of investment that’s required. That is usually $1000 to $2500.
Well, do you pay any other fee in a brokerage account?
You do pay commission for each trade, which means buying or selling stocks, bonds or other things which is usually between $5 and $9 for each trade.
Well, how do you get the money when you sell a stock or bond or any other things?
The money comes into the brokerage account when you sell them and it can be transferred into your checking or savings account just like you transferred it to the brokerage account from your checking or savings account before you made the investment.
Is the money in the brokerage account safe?
When the brokerage is registered with the Securities Investors Protection Corporation or SIPC, each account is insured for up to $500,000.
So, if your brokerage is registered with SIPC, your money is safe as long as it’s under $500,000.
Well, what are some of the popular brokerages?
Some of the popular brokerages are Charles Schwab, Fidelity, TD Ameritrade, E Trade, Vanguard and many more.
How do I open a brokerage account?
It’s fairly simple and easy to open a brokerage account. It can be done online in less than 10 minutes by visiting the brokerage website.
Thank you very much for telling me about a brokerage account, Wall St. Willy.
You are welcome, Sooper Cooper. Remember, Finance is Your Friend!