Money secret No. 18 What is a brokerage account?

It wasn’t all that long ago that investments were issued in paper form. For example, you would own stock in a company or government bonds in the form of physical papers. Some of these papers were stored in warehouses.

The warehouse of today for storing stocks is essentially a type of account where you can keep different kinds of investments. In Germany, you have to have a brokerage account if you want to trade (buy or sell) different types of investments (also called securities – see above). The process for opening one is similar to that of a bank account, which involves providing identification and certain personal information. A brokerage account is usually connected to a clearing account or a checking account that handles the money you get in from your investments or money you have to pay (such as fees, which can vary in amount).

Money secret No. 18: Learn about the exact kind of account you’re opening, including the fees that apply for transactions or for different account types, such as brokerage accounts.