Brokerage Account: What Does It Mean?

A brokerage account is an investment account that lets you buy and sell investments like stocks, bonds, ETFs, and mutual funds through a brokerage firm. Unlike a 401(k) or IRA, a standard brokerage account (often called a taxable account) has no contribution limits and no restrictions on when you can withdraw. The trade-off is that you'll owe taxes on dividends, interest, and capital gains in the year you earn them. Most are cash accounts, though some investors choose a margin account, which lets you borrow from the broker to invest. Many online brokerages now offer commission-free trades and no account minimums, which makes getting started much easier.