The Investing Terms for Beginners

Whether you are new to investing or just need a reminder, these basic investing terms below are ones you should get to know first.

Investing Account Terms

This is the entity that lets you buy and sell investments for you. Usually, you pay a fee for this service. There are also plenty of online discount brokers, where you often pay a flat commission per trade.

1. Broker

Investing Account Terms

A brokerage account is created by a licensed brokerage firm, that allows an investor to add funds and then the investor can place investment orders.

2. Brokerage Account

Investing Account Terms

A money market account is an interest-bearing account that will typically pay a higher interest rate than a bank savings account would.

3. Money Market

Investing Account Terms

A type of retirement plan offered by employers to their employees, which usually allows investors to put their money to work in mutual funds or index funds.

4. 401k

Investing Account Terms

A traditional IRA is an individual retirement account that offers tax advantages to savers. You won’t pay taxes upfront, but you will when you withdraw during retirement.

5. Traditional IRA

Investing Account Terms

An individual retirement account allowing a person to set aside after-tax income. Similar to the Traditional IRA. you can contribute the maximum of $5,500 to a Roth IRA ($6,500 if you are age 50 or older by the end of the year). 

6. Roth IRA

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