How Does A Brokerage Account Work

So how does a brokerage account work?

To start investing in the stock market you need to open a brokerage account. This account will allow you to purchase stocks, mutual funds, and other investments.

A broker essentially will buy and sell securities for you for a commission.

You will pay a commission when you buy and sell a stock. So if your commission rate at your broker is $7.00 a trade you will ultimately be paying $14.00 in total commission cost by the time you buy and sell a particular stock.

Commission rates can vary by a lot depending on how much you are expecting from your broker.

We have a list of broker reviews here.

Return from Brokerage Account to Stock Market Investing

Pick Quality Stocks:

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Best Online Broker:

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Emergency Funds:

Before you ever invest in stocks or other risky investments you should have an emergency fund in place. A great place to keep an emergency fund is ING Direct.