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Rule #1 - Do not lose money! Rule #2 - Never forget rule number 1! ( by: Warren Buffet )For comments or questions please email: : admin@equityresearch.com |
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What is a Brokerage Account?A brokerage account is like a bank account. The difference is that it can hold money in a stock, in cash, in a bond, in a mutual fund, in options, in a money market, or in various currencies (Forex). The account can be coded for retirement. For example, any of the above investments can be held in an IRA. The only difference, with the IRA, is that new tax rules apply to the exact same investment.Credit Cards and ChecksSome brokerage accounts issue credit cards. The credit card can be used to take cash out of the account at any time. If you need some credit to back up your account (overdraft protection), in a brokerage account it is called margin. Some brokerage accounts will allow you to write checks against the account. This makes getting to your money almost as convenient as a bank. How Long Does it Take to Get Your Money Out?People worry about getting their money out of the brokerage account. It is not that hard. If you need to sell a security it will take 3-5 business days to settle. Then, you can wire the money (24 hours) or do an electronic funds transfer (3-5 business days) to your bank. Most people choose electronic funds transfer because it is free. In addition, some people have check writing and credit cards on their brokerage account and that makes it even faster to access the money.InsuranceBrokerage accounts are insured up to $500,000.00 dollars and bank accounts are insured for up to $250,000.00. The insurance is if the financial company becomes insolvent. In that case, the insurance will step in and protect you. For this reason, it is wise to break up your millions into several different accounts so that you are completely covered. There is no charge for the insurance. Accounts are insured, by law, to protect consumers. |
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