Brokerage Accounts

The most flexible way to invest

Contribution Limit

None

Withdrawal

Anytime

Commissions

$0

at most brokers

Deposit money, buy whatever you want. No limits, no restrictions. The tradeoff: you pay taxes on gains.

Short-term (< 1 year)

Taxed at your income rate

Could be 22-37%

Frequent trading = more taxes

Long-term (> 1 year)

Lower rate: 0%, 15%, or 20%

Based on your income

Hold longer = pay less

the move

Hold stocks for at least 1 year to get the lower long-term capital gains rate. This alone can save you thousands.

Check yourself

What's the tax benefit of holding over one year?