Brokerage Account Basics: Shopping for a Brokerage Account

Let’s talk about investing! When you’re ready to invest, a brokerage account is exactly what you will need to start making investments by trading stocks, bonds or mutual funds. Today, the CGS Team is going to discuss what you need to look for when shopping around for a new brokerage account.

Brokerage Account Basics #1: What is a Brokerage Account?

A brokerage account is an investment account that allows you to start purchasing investments by paying professionals to make the trades for you, or to make them yourself.

There are many different companies that offer brokerage accounts. There are also two different types of brokerage firms: discount and traditional. A discount brokerage firm is ideal for the investor who wants to make trades on their own. Discount brokerage firms don’t offer trading advice and they let account holders make their own financial decisions.

Because of this, fees and commission are significantly lower for discount brokerage firms. Traditional brokerage firms offer a much wider range of options. Brokerage accounts with traditional firms typically come with a personal broker. This broker will be the one executing trades on your behalf. The broker can also manage money and offer advice regarding trades.

Some companies, like Charles Schwab and Merrill Lynch offer combined discount and traditional services. This allows the customer to transition from one account type to another if needed. A few of the most popular discount brokerage firms are E-Trade Finance, Scottrade, TD Ameritrade, and Charles Schwab. Popular traditional brokerage firms include UBS Financial Services, Edward Jones, and the Vanguard Group. It’s also common for typical banks like Wells Fargo, Chase and Bank of America to offer brokerage accounts.

Brokerage Account Basics #2: Account Necessities

After you have decided if you want a traditional brokerage account or a discount brokerage account, you can start researching the account that will be the best for you. When shopping around for different accounts, ask yourself the following questions:

  • How much is required to open the account?
  • How much does the company charge for each trade (commission)?
  • Is the app or website easy to use when making trades? (If you are considering a discount firm)
  • Are there any ongoing fees or account requirements?
  • What services or resources are available to investors?

The five questions listed above are crucial when deciding where to open your investment account. With discount firms, commissions are typically a flat fee that can range from $7-$30. As of more recent years, orders placed no longer have a fee. Traditional firms often charge a certain percentage of the amount of a purchase or sell trade. This can get pricey if you are trading large sums of money.

Most brokerage accounts allow the account holders to have money direct deposited into the account. They also offer transferring services between other banks for little to no transfer fees. If you are serious about investing, adding money over time will allow you to better diversify your portfolio and not miss any money that you would have had you deposited a large amount of cash into the account.


Finding the right account for you is one of the first steps in your investment journey. If you want to learn more about the different types of investments, check out the Finance 101: Investment Types article. If you want to learn more about investing strategies, check out the Finance 101: Investing Overview article. Feel free to share your thoughts, questions, or concerns by leaving a comment below. If you are feeling a little hesitant or worried, let us know and we can share our experiences with investing!

-The CGS Team



1 thought on “Brokerage Account Basics: Shopping for a Brokerage Account”

  1. I’ve had brokerage accounts with Schwab and Scottrade. I’ve also dealt with personal brokers at Source Capital. It’s nice to have a broker complete the trades, but they definitely make money off of it. I think Schwab is my favorite. The app is very easy to use and placing trades is simple. Anyone have any brokerage account feedback?? @jstreaks @dclark @45tracie @lindseypavlov ??

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