Brokerage Account
A brokerage account is a taxable investment account you use to buy stocks, bonds, ETFs, and funds. Unlike a 401(k) or IRA, it has no contribution limits and no early-withdrawal penalties — you can access the money anytime — but you owe tax on dividends and gains.
It is the right home for money you may need before retirement age, and for anything beyond the annual limits on tax-advantaged accounts — a brokerage account has no contribution cap and no withdrawal restrictions. The trade is that it offers no tax shelter: dividends and realised gains are taxable in the year they occur. Holding period decides the rate. Gains on assets held more than a year are long-term and taxed at preferential rates of 0%, 15% or 20% depending on income; anything sold sooner is short-term and taxed as ordinary income, which for a higher earner can be more than double. That single rule is why patience is rewarded here even before compounding is considered.
Put it to work
Investment Calculator
Project an investment portfolio's growth with monthly contributions — final value, your money vs market growth, and the year-by-year path.
ROI Calculator
Measure the return on any investment: total gain, total return (ROI), and the annualized return (CAGR) that lets you compare deals held for different lengths of time.