Cash verses Margin Account?

Cash account This type of account asks you to deposit cash, and then you can use that cash to buy stocks, bonds, mutual funds, or other investments. It's not much more complicated than that. Margin account In a margin account, the cash and securities in your account act as collateral for a line of credit that you take out from the brokerage in order to buy more stock. The interest rates that brokers charge are lower than typical credit card rates, but they do mean you'll need to earn a much higher return on your investments than you would if you were only investing with your own cash. We generally counsel against using margin, but that doesn't mean that getting a margin account is automatically a bad idea.

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