Definition

Noun: 1. A brokerage account requiring immediate payment for transactions: A type of account with a securities brokerage firm where the investor must pay the full amount for any purchase of securities by the settlement date. It does not allow borrowing money from the broker to buy securities (margin trading).

Usage

• A cash account is the standard type of brokerage account for most individual investors.
• In a cash account, you can only trade with the settled cash and securities you have deposited.
• Regulations typically prohibit certain types of high-risk trades, like short selling, in a basic cash account.

Examples

Advanced Usage

• "To be restricted to a cash account": To have one's trading abilities limited to this type of account, often due to regulatory rules or broker policies for certain investors or trading patterns.
  • New traders are often restricted to a cash account until they gain more experience.

Variants and Related Words

• Margin Account (n): The contrasting type of brokerage account that allows investors to borrow money from the broker to purchase securities.
  • Upgrading from a cash account to a margin account requires approval.

Synonyms

• Non-margin account: A direct synonym emphasizing the lack of borrowing capability.
• Settlement account: A related term focusing on the function of settling trades with available cash.

Noun

1. an account with a securities brokerage whose transactions are settled on a cash basis