- August 26, 2020
As persons become more financially savvy, they look for more lucrative investment vehicles. Instead of the often very low-interest rates on cash deposits, for example, more and more persons are transitioning from savers to investors by opening brokerage accounts. A brokerage account is an investment account through which investors can purchase stocks, bonds, mutual funds, and other investments. In other words, a brokerage account provides access to a range of investments, helping investors create robust and diverse portfolios.
But how do you know a brokerage account is right for you? We’ve outlined a few guidelines to help you decide.
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You want all your securities in one place.
A brokerage account is probably right for you if you have several securities that you want to put in one place. One of the benefits of brokerage accounts is consolidation. Even though you will still be managing your own investments, by consolidating your securities, you have the benefit of one point of contact to assist you. An additional benefit is free online banking, as offered by RF, allowing you 24-hour access to your account from wherever you are. This way you always know how your investments are performing without having to call or sign in to multiple locations.
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You want to track your dividend and interest payments.
If you’re unsure whether you’ve received all your dividend and interest payments from your stocks and bonds, you should probably open a brokerage account. These payments will be automatically deposited onto your brokerage account, allowing you to conveniently track them. Plus, if there is a problem with the payment, the brokerage department will follow up with the issuer on your behalf.
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You want the option of borrowing against your portfolio.
Another benefit of a brokerage account is its margin loan feature. This allows account holders the option of borrowing against their investments at a rate much lower than the average consumer loan. RF’s Margin Loan facility, for example, allows investors to borrow up to 50% of their assets. These loans usually come with few restrictions and short turn-around time. The funds can be used for any purpose and repayment terms are extremely flexible.
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You want trade commission discounts and access to securities.
Full-service brokerage accounts like RF’s Advantage Plus Account offers the added benefit of trade commission discounts. Also, this full-service account gives you top priority on investment securities offerings at no additional cost. Other benefits of this kind of account can include instant trading and a $10K credit line. Of course, you can opt for execution-only accounts, like RF Advantage or Zero Fee Brokerage Accounts if you do not want these options.
While these tips can help guide you on whether a brokerage account is right for you, a sure-fire way is to sit with a Brokerage team member. Here is where you discuss your investment goals and see if a brokerage account is the best way to help you achieve them. To learn more about brokerage accounts and to get additional financial tips, visit www.rfgroup.com/stock-brokerage
Staff Writer: Jade Bethel