When a client comes to a broker's office to open a brokerage account, company employees often clarify what kind of account needs to be opened. As a rule, broker client managers offer to open two types of accounts - brokerage (standard trading account) and IIS (individual investment account). What's the difference between them? Which option should I choose? The answers are in our article.

Brokerage account

First, let's figure out what a person gets by opening a regular brokerage account and crediting funds to it? First of all, the opportunity to become a trader/investor, make transactions on the stock exchange with a whole list of assets (securities - stocks and bonds, currency, shares, futures, options, etc.) and, as a result, receive profitability from exchange trading. Clients of the brokerage company are provided with special software with which they can observe the price dynamics of various assets and make transactions with them.

Rice. 1. QUIK trading terminal - a program for making transactions with exchange assets

As for the income received from transactions carried out on a brokerage account, it is subject to income tax in the amount of 13%, and the broker is a tax agent, that is, he pays the tax on behalf of the client. The client can deposit funds into the account in any quantity and whenever he wishes. Moreover, the trader can choose how he would like to conduct his trading activities: independently or with tips from a broker. Or even connect various interaction options - for example, a trust management service, when broker professionals make transactions on the client’s account in accordance with the chosen investment strategy.

Individual investment account

To popularize exchange trading and the influx of investment capital from the population into the Russian economy, from January 1, 2015, legislators introduced individual investment accounts - IIS - for individuals (residents of the Russian Federation). Owners of such accounts were able to obtain tax deductions, thus increasing the return on investment. To date, more than 200 thousand people have already taken advantage of this opportunity. Let's figure out what this type of account provides and whether it is worth opening an IIS.

When opening an individual investment account, an investor/trader has the opportunity to carry out transactions with exchange assets that are also available when working on a standard brokerage account - stocks, bonds, derivatives, currencies traded on the Moscow Exchange. The main difference between an IIS and a brokerage account is that IIS owners have advantages in the form of tax deductions. The fact is that the owner of an IIS can choose which deduction he wants to receive. There are two types of deductions: type “A” - deduction for contribution and type “B” - for income. The essence of the “A” deduction is that the person who opened the IIS can return the personal income tax paid. Simply put, if the person who opened the IIS receives a salary on which taxes are paid, then they can be returned in the form of a deduction under the IIS. Type of deduction “B” allows a person not to pay tax on income received from trading operations in this account.

But in addition to the listed preferences, IIS also has its limitations. Firstly, the maximum annual replenishment amount should not exceed 400 thousand rubles. Top-ups can be made an arbitrary number of times, but the total amount of contributions should not exceed the established amount (taking into account the 13% personal income tax, it turns out that it is a type of deduction “A”). You can close an IIS only three years after opening such an account (precisely after the opening, and not the transfer of funds), otherwise it becomes an ordinary brokerage account, and previously issued tax deductions will have to be returned to the state. One person can have only one IRA. If an investor decides to open an IIS in another company, he has the right to transfer the funds available in the old IIS to a new account. Thus, the investor still remains the owner of one individual investment account.

Now about the options for maintaining an IIS. Just like for a standard brokerage account, you can choose an independent option for performing trading operations, advisory management (when the broker offers current investment ideas) and trust management (when the investor only tracks the profitability received according to a predetermined investment strategy).

It turns out that IIS gives its owner a number of advantages compared to a standard brokerage account and does not oblige its holder to do anything. Taking into account the fact that the three-year period begins from the moment the IIS is opened, such an account can be opened and held without taking any action.

Conclusion

What is better to open - a brokerage account or an individual investment account? Both options have their advantages. You can have a classic brokerage account and carry out trading operations on it, and invest the surplus of funds in an individual investment account.

It is worth considering that IIS involves long-term cooperation with a brokerage company, so its choice must be taken seriously. It must be a large company, with highly qualified specialists and high reliability ratings - such as Otkritie Broker. We are ready to become your reliable guide to the world of successful stock investments.

Brokerage services, depending on the sector of economic activity, can be divided into: brokerage services in the stock market, real estate market, commodity exchanges, brokerage services in the field of mortgage lending, Forex brokerage services and so on. The specifics of access to a particular market, the peculiarities of execution and execution of transactions determine the content of one or another type of brokerage services.

Who can provide brokerage services

Banks and brokerage companies - both offer fairly impersonal brokerage services. Individual consultations are available only for VIP-level programs. On the other hand, it is banks and brokerage companies that provide brokerage services on a mass and publicly available basis.

Specialized companies (for example, real estate agencies provide advice to a professional real estate broker) are specific types of brokerage services that require special knowledge and training,

Professional brokers provide a high level of individual approach.

As a rule, brokerage services mean intermediary activities in the field of investment in securities, that is, in the stock market. Most offers of brokerage services are related specifically to the securities market, which is not surprising, because individuals and most legal entities cannot gain access to investing in securities directly; this is only possible with the help of a broker.

As part of brokerage services in the securities market, investors have the opportunity to carry out transactions in various financial markets.

For example, Sberbank of Russia provides access to the following trading platforms:

• The MICEX Stock Exchange is the leading stock exchange in Russia where shares and bonds are traded. The share of the stock exchange market is eighty percent;
• Moscow Interbank Currency Exchange (Russian Trading Systems);
• RTS Stock Exchange (futures and derivatives market FORTS);
• St. Petersburg Exchange (a feature of this exchange is the circulation of shares of OJSC Gazprom);
• Towards the over-the-counter market.

Another largest bank, VTB 24 offers brokerage services on the MICEX stock exchange on the FORTS derivatives market. The range of opportunities provided is the main characteristic of a broker in the securities market.

How do you interact with a broker?

• The client can submit applications directly by telephone.
• The client can submit applications in person, at the place where brokerage services are provided.
• Applications can be submitted using online trading systems. The online brokerage sector is extremely developed in the areas of currency trading and buying/selling shares. Loan and mortgage brokers typically work on an individual basis.

In addition to the main task of brokerage services - organizing access to currency exchanges, or searching for counterparties, brokerage organizations perform functions accompanying the transaction: providing the necessary information and technical support.

How to determine the quality of brokerage service?

The most important criteria by which to evaluate a future broker in any field of activity are reliability and working conditions.

The reliability of a broker can be judged by the following parameters:

• Availability of a license. This indicates the legal transparency of the company. When choosing a reliable broker, you should immediately discard those who do not have the appropriate license.
• Duration of operation on the market. Successful brokerage activity requires an extremely high level of awareness, the ability to navigate a huge flow of information and choose the best option. This applies to any market: from the securities market to the real estate market and lending to individuals.
• A detailed agreement for the provision of brokerage services and public regulations are the main documents governing the relationship between the broker and the client. The agreement is the basis for resolving conflicts and making claims. Any major broker on the securities market or stock market suggests that before concluding an agreement you should familiarize yourself with the regulations for the provision of brokerage services.
• Working conditions are specified in detail in the contract. For example, an agreement for the provision of brokerage services in the field of real estate must necessarily list the types of work (services) specified in clause 4.2 of the National Standard of Professional Activity, adopted by the National Council of the Russian Guild of Realtors.

Hi all. Not long ago I told you how to open a brokerage account for an individual, but it turned out that many do not quite understand what it is. Now, some of my readers know how to open a brokerage account, but have no idea why it is needed or what to do with it. So, I decided to improve.

What is a brokerage account?

If you delve into dictionaries, you won’t be able to find anything intelligible. In their words, a brokerage account is a type of account in which your money is located, and it is managed by a certain broker to whom you have given a power of attorney. But this is somehow wrong, now I’ll try to explain everything from the point of view of a person who has been using a brokerage account for several years, that is, me.

A brokerage account is an alternative to a bank deposit. Unlike a deposit, you decide for yourself what to invest in and your profitability is not fixed, but depends on the success of the investment. Even with the most conservative strategies, it exceeds deposit income.

The idea is that you give an order to buy stocks or bonds, and the broker executes it. Simply put, through a certain program or from the office, you inform the broker about your intention to buy 100 shares of Sberbank at a price of 200 rubles and the broker executes your order. This way you become a shareholder.

In my opinion, every person who cares about their financial situation is required to have a brokerage account. Often interesting offers appear on the market; you can purchase income-generating securities, but this can only be done through a brokerage account. Not having it means depriving yourself of such an opportunity.

Benefits of a brokerage account

Access to securities from all over the world! You can become a shareholder of Google, Yandex, Sberbank, Gazprom, Microsoft or Aeroflot in a matter of minutes. Just click a few buttons and shares of any company will belong to you. The same goes for bonds.

The opportunity to become an investor. Receive income not only from the growth of the stock price, but also from the payment of dividends. Each security purchased pays either dividends or a coupon if it is a bond. You can configure their output to your card. This opens up the opportunity to live on dividends from investments made.

You pay taxes on the income received, which makes your investment completely legal. At any time you can get a 2-NDFL certificate, which confirms your income from investments.

If you think that the dollar will rise in price, you can convert the currency and invest it in shares of American companies. Plus, in addition to the growth in the value of the dollar, you will receive growth in the purchased stock and dividends, which will significantly increase your income.

Simply put, any transactions with any securities are available on a brokerage account. It doesn’t matter whether you are an active investor who regularly makes speculative transactions or a passive one who prefers to buy a certain asset and receive dividends, in any case you cannot do without a brokerage account.

Minimum brokerage account

The opening does not provide for any restrictions on the amount. You can open an account and not replenish it at all. Use it as soon as the need arises. There are no fees for an empty account. As soon as you make a deposit, the account will be considered active, and from that moment you will start paying for its maintenance. The size of payments depends on the tariff, but on average it is about 200 rubles per month.

Individual investment brokerage account

When opening, you can choose not a regular brokerage account, but an individual investment account. This is the same account, but there are some differences, bonuses, benefits and restrictions. I'll start with the limitations.

You cannot withdraw your money for three years. That is, it is possible, no one will forbid you to withdraw them, but in this case you will not receive all the benefits and bonuses. But they exist.

The state pays you 13% on the amount of funds deposited. Or you can exempt all earnings from tax. There are people who opened an account with 1,000,000 rubles and earned 300,000 in a year. In theory, income tax in the amount of 36,000 will be withheld from them. But for IIS holders, tax will not be withheld. These are benefits for investors in Russia. If such a client chooses the first type of tax deduction, then the state will pay him 130,000 for the million contributed.

Where to open a brokerage account online

These days, going to bank offices is becoming an increasingly rare event. Especially in big cities, there is simply no time for this; every minute counts. We have long been accustomed to making all payments online, and opening a brokerage account is no exception. Everything can be done remotely and without much effort. You just need to prepare. You will need scanned copies of all documents, namely passport, SNILS, NNN. After filling out all the fields and uploading documents, wait for a call from a specialist.

Brokerage account FINAM

I use this particular broker because of its reliability. FINAM has all the necessary licenses, awards, and titles to carry out this activity. In all ratings they occupy leading positions, in most they are always first. I repeat for the hundredth time I started my activity with the broker Otkritie, which I am also pleased with, but the lack of an office in my city decided the outcome in favor of Finam. Taking this opportunity, I would like to once again note the professionalism of the company and thank you for the fruitful and effective cooperation. I hope our relationship will continue in the same spirit, and I recommend that all newcomers join our investment fraternity.

In general, a financial brokerage account is:

• Over 10,000 instruments on all world exchanges including MICEX, Nasdaq, NYSE
• Daily free newsletter of investment ideas, analytical reviews and recommendations from professionals
• Many programs and applications for the convenience of making transactions
• Technical support, free seminars and webinars, own school
• Access to stock, derivatives and foreign exchange markets, St. Petersburg Stock Exchange, Exchanges of America
• Ability to copy trades of successful traders

And much more

I hope I was able to tell you a little more about what a brokerage account is and what it is needed for. Just recently I heard an initiative to keep pension savings in brokerage accounts. Unfortunately, such a pension model is not sustainable, because the majority of the population has no idea how to use it; it’s easier for them to pay who knows where and wait for some magician to take care of their old age.

Meanwhile, a brokerage account with a conservative approach can bring up to 30% profit per year. You can secure your pension without difficulty, I have already started doing this, but what should you do?

An alternative to a brokerage account. does it exist?

There is literally no alternative. That is, the functions that an investor needs are present in this service in full. However, there are some points that make a brokerage account inaccessible, then you have to look for workarounds. If you are a citizen of Russia or do not live in our country at all, then opening a brokerage account will not be available to you. But there is a way out, you can read about it in my article - a brokerage account for non-residents of the Russian Federation.

If you live abroad and intend to invest exclusively in dollars and euros, then you should also choose a different type of account. You can open it and find out what it is.

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IIS account with a yield of 16% per annum

Up to 52,000 per year from the state. Up to 4% on free balance. Access to all securities in the world. Licensed by the Central Bank of the Russian Federation. On the market since 1994. More than 90 offices throughout the country. Personal manager. Service for saving for an apartment, car, pension. The minimum deposit is only 30,000 rubles. We will create an investment portfolio for free. Trust management at the request of the client. Open an account online in 15 minutes. Free analytics.

• Open an individual investment brokerage account

• Open a brokerage account for non-residents of the Russian Federation (residents of CIS countries, Europe, USA)

• Give money to professionals in trust (from 50,000 rubles)

• Service piggy bank (save for a car, apartment, pension)

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Legislation regarding work in financial markets has changed greatly recently. This also applies to the Russian Federation itself, where the law on Forex has finally seen the light of day, and other developed countries, where serious attention has been paid to regulating the activities of brokerage companies or, as they are now officially called, dealers. In this regard, a modern speculator must understand what a brokerage account is, how and where it can be opened, how many similar currency and stock-denominated accounts in offshore countries and in the Russian Federation one individual or legal entity can have.

We study legal aspects

So, today all new clients must open a brokerage account with intermediary financial companies that provide access to the stock exchange and foreign exchange market. Only after this will they be legally able to carry out transactions of a speculative nature. Each trading operation occurs at the expense of the investor, for whom the brokerage company acts as an intermediary entity acting on behalf of the client in the financial markets. Therefore, responsibility for all actions taken lies solely with the trader or investor himself, since government services from executive authorities do not extend to financial aspects.

The broker's profit is formed as a percentage of transactions made by the client, and its size is directly proportional to the volumes traded. This means that a brokerage company that operates honestly on the basis of the obtained license receives income from each client's trading transaction, regardless of whether it was successful or unsuccessful. At the same time, the broker is interested in each client making maximum profitable transactions, ensuring a flow of profit into their pockets. Thus, such a scheme does not contain a conflict of interest, and the broker will do everything possible to ensure that investors work and earn stable income.

Before opening a brokerage account for a newbie individual, he should understand that he is actually opening a kind of electronic wallet, the integrity of which is guaranteed by the chosen company. Funds transferred there are managed through a special personal account, where there is access to a number of functions for the client to realize his desires.

When opening an account, a mutually beneficial cooperation contract is actually concluded between the broker and the investor, where the client acts as a managing individual or legal entity, and the dealer undertakes to carry out his will.

Brokerage companies differ from each other in terms of trading conditions, the number of available assets, input/output methods and other parameters. That is, the law does not impose mandatory conditions on brokerage companies, although there are still certain restrictions, and they manifest themselves, in particular, in the amount of leverage limits, account verification, etc.

Algorithm for opening an account with a licensed broker

Below we describe, point by point, what exactly you should pay attention to when opening your own account for a legal entity or individual with licensed brokers. Most of the recommendations are also suitable for companies that are based offshore, however, there is still a strong distrust of the latter, although their conditions usually compare favorably with dealers with the appropriate permits.

Selecting a market for investment

When opening your account, you need to take this issue as seriously as possible, since your funds are at stake and should be protected. The registration procedure itself is simple, but first you need to determine exactly where and with what assets the work will take place.

What options do Russian traders and investors have? The first and most obvious is to invest capital in shares of domestic companies, working on the stock market. In addition, you can effectively and potentially very profitably trade on the derivatives market, operating with currencies and futures contracts for the same stocks, currency pairs, oil, etc.

Well, the most popular in Russia is still working on Forex, which, although not subject to regulation, still, thanks to the adopted Law of the Russian Federation, allows you to work quite safely through dealers licensed by the Central Bank.

We allocate capital for work

Having chosen a market, you need to determine how much money you plan to start working on it. There are several recommendations here:

1. It is extremely dangerous for a beginner to start trading with large amounts, even if he manages to consistently make a profit on a demo account. The fact is that investing substantial money puts a strong psychological pressure, so first you need to acquire the appropriate skills, and then increase trading volumes.
2. When allocating money to open your first real account with a broker, the use of credit or borrowed funds is not allowed, since working on the stock exchange always involves risks, so you need to be prepared to say goodbye mentally to the allocated amount of money. Only this approach ensures minimal psychological pressure when making decisions.
3. It is important to study the warranty coverage for each tool so that you do not accidentally “buy to the fullest.” For example, to trade a futures contract Si (dollar/ruble pair) on the Moscow Exchange derivatives market, you need to have at least $200 in your account with a broker, since almost $100 is needed only to cover the guarantee required by the MICEX, and the remaining funds are needed to withstand counter movement to the set stop loss. For different assets, the collateral varies in amount, and in Forex, before opening a transaction, you should use a calculator to calculate the value of the pip, the amount of collateral, etc.

In general, the allocated amount should allow you to work in a psychological comfort zone and comply with the rules for trading the selected asset according to the classical recommendations of money management.

Choosing the right dealer

The next step is to select a brokerage company that will represent the interests of the trader. To select a mediator, it is important to pay attention to the differences between them. The fact is that now you can easily find several companies from a huge number that will best meet the personal expectations of each investor.

Conclusion of a contract with a broker

The process of documenting the relationship between a client and a broker is usually simple and occurs fairly quickly. Especially when it comes to Forex dealers. Since they usually only ask you to agree to the offer and provide electronic copies of personal data in order to complete the verification procedure, as required by all financial regulators.

In the case of brokers that provide access to the derivatives or stock market, the personal presence of the investor may be required, who will need to come to one of the brokerage company’s representative offices to sign documents. This is how, in particular, the companies Otkrytie, It-invest and others operate.

Replenishment of trade balance

Having completed all the steps described above, all that remains is to top up your trading account. It is worth noting that the methods and timing of replenishment may also vary greatly among individual companies. Therefore, if it matters to an investor, for example, whether he can make a deposit via Webmoney without commissions, then it would not hurt him to first inquire about this point.

Types of brokerage accounts

Before you finally decide for yourself where to open a brokerage account, you should also familiarize yourself with what it can be like. It can be classified according to several parameters, so let’s look at what signs you should pay attention to.

Based on the number of persons capable of managing the account, it is divided into:

• single personal:
• joint.

According to the model of mutually beneficial work with the company:

• ordinary individual, when the client conducts trading himself, and the broker only executes received orders;
• trust, in which the funds on deposit are managed by a broker who carries out trading operations independently on behalf of the trader.

By type of cash transactions:

• credit account, when the broker gives a margin - borrowed funds to increase the volume of trading operations;
• classic investment, in which transactions occur only with the funds available to the client;
• optional for working with this type of contracts;
• pension, which allows you to receive preferential conditions when paying taxes.

Differences between a deposit and a trading account

According to the law of the Russian Federation on financial activities, bank deposits and accounts are registered with the relevant institutions so that they carry out clients’ orders for cash settlement and savings transactions. In this case, the funds are insured against losses by a special agency.

In the case of a brokerage account, capital is not insured, and the invested funds are intended to carry out speculative transactions in the financial markets.

What risk is the investor's capital exposed to?

After managing to open a brokerage account online, the investor will face only two types of main risks, which it does not hurt to know about in advance:

1. Danger of running into scammers. If the contract is concluded with a company licensed by the Central Bank of the Russian Federation, then such a risk disappears, but trading conditions will be far from ideal. This path is only interesting to investors with very large capital, but small account holders should still allow some risk and pay attention to companies operating offshore.
2. The second type of risk lies in investing itself and conducting speculative operations, since such activity itself, especially using the margin provided by the broker, is fraught with danger. In a volatile market and an incorrect assessment of the situation, you can lose a lot of money in a matter of seconds. This type of risk can be reduced by acquiring useful knowledge and skills.
3. The last type of danger concerns the company itself. Unfortunately, sometimes even seemingly good and reliable financial organizations are forced to declare themselves bankrupt. The reason for this often lies in certain force majeure circumstances or their unfortunate combination, so when working in financial markets, stability can only be guaranteed through diversification, distributing your funds across different companies, assets, etc.

What can you expect with an open account?

Opening a brokerage account allows you to make money on the financial markets better than the opportunity to do good business. That’s why many people are so drawn here, because by understanding the essentially simple basics of price changes, you can quickly ramp up even from a small account to very serious profits.

Of course, in practice, everything is far from simple, since the market sometimes reveals to the trader aspects of it that he did not even know about. Everything that fills a person suddenly becomes very obvious, the emotions of fear, greed, and excitement come to the surface and the investor has to face the need to analyze his far from best qualities.

In addition, to succeed you will have to not only keep your head cool, but also show character, perseverance and adhere to strict discipline. Therefore, the financial world is definitely not for weaklings, and in order to earn a stable income, you will have to work hard!