In addition to maintenance or consulting fees, some companies charge commissions when you buy and sell investments in your Roth IRA. Some companies also make money by selling you certain securities, such as mutual funds run by the broker. You deposit cash into a brokerage account and use the money to buy fixed assets such as stocks, bonds, mutual funds, and exchange traded funds (ETFs). Brokerage accounts are used for day trading to generate short-term profits, as well as for investments for long-term goals.
Most brokerage accounts also offer the option to earn a decent return on uninvested money. Traditional IRAs and 401 (k) s allow investors to defer taxes until they retire, while Roth IRAs and 401 (k) s allow investors to grow tax-free until contributions are deducted (investors deposit money that has already been taxed). On the other hand, IRAs are tax-deferred or tax-exempt accounts (depending on the type of IRA you choose), but there are strict contribution limits, and withdrawals can result in a penalty.
