Margin accounts extend you a line of credit that lets you leverage your cash balance… It provides a great opportunity to leverage your investment to help increase your return. With a brokerage cash account, you can only invest the cash that you have deposited in your account. The brokerage uses your account as collateral for that loan, on which you owe interest to your broker. A cash account is a type of brokerage account in which the investor must pay the full amount for securities purchased.

A margin account, on the other hand, is an account for which your broker lends you money to buy stocks. A margin account is a brokerage account which allows investors to leverage the funds and securities they already own to purchase additional securities.

A cash account, as the name suggests, is a type of account in which you pay the full amount for the stocks you buy.