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Types of Investment Accounts : What You Need to Know

Are you ready to start investing but have no idea where to begin? From selecting among the many types of accounts to helping you track your progress, Demand Wealth’s interactive website and client portal will help you meet your goals.

There are many types of investment accounts to choose from, ranging from taxable accounts to tax-deferred or even tax-free retirement accounts. Clients count on us to manage taxable individual, joint, and personal trusts as well as retirement accounts like IRAs, Roth IRAs, and SEP’s (if you are Self Employed). Remember that the earlier you start putting some money away, the more it can grow.*

Standard Taxable Investment Accounts

Individual Account:

As a standard brokerage investment account for one person, the account owner can assign beneficiaries who will receive all assets upon the death of the owner. Consider assigning a power of attorney to someone who can access the account in the event of illness or incapacity.

Joint Account:

An investment account for two or more people allows you and your spouse or another individual(s) to grow your investments together.

As a Joint Tenants with Rights of Survivorship (JTWROS) account, each person has an undivided interest in the entire account. Upon the death of one account owner, the remaining account holder(s) retain(s) ownership of the entire account. For clients who reside in “community property” states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), be careful to evaluate alternatives to JTWROS when applicable.

A Tenants in Common account has two or more account owners with each person owning a specified percentage (usually 50/50) of the entire property. Upon the death of one of the account owners, that person’s estate holds the right to their percentage of the account and the other holder retains 50%.

Trust Account (Non-Testamentary):A non-testamentary, or Living trust, will generally have a living grantor(s). Investment securities are registered in the name of the trust and managed by a trustee(s) for the benefit of themselves and/or others.

Trust Account (Testamentary):A testamentary trust is created through the will or trust of a deceased person. Investment securities are registered in the name of the trust and managed by a trustee for the benefit of another person(s).

With this account, the account holder’s assets—usually those of a minor or a person who can no longer manage his or her own property or financial matters—are managed by the trustee(s). Demand Wealth stands ready to help trustees achieve the objectives of the trust they are overseeing—and in a tax-efficient way.

Retirement Accounts

Opening a personal retirement account is one way to grow your retirement nest egg. We’ll help you choose the right retirement account and provide the toolsand resources you need to move toward your retirement goals.

Traditional Tax-deferred IRA Account:

This investment savings account provides tax-deferred growth and potentially tax-deductible contributions. Putting dollars away before they’re taxed means you’ll pay less in taxes now and have more for your retirement.

Rollover IRA Account:

This investment savings account is specifically designed to receive rollovers from a previous retirement plan, like a 401k or 403B. Rolling over assets from your old employer’s plan into a rollover IRA account can provide access to a broad range of investments while maintaining the tax-deferred status of your retirement assets.

Roth IRA Account:

Unlike traditional IRAs and other retirement plans, Roth IRA contributions do not provide a current tax deduction. For example, if you earn a salary of $100,000/ year and contribute $10,000 into a 401k, you will only have to pay taxes on $90,000. A $10,000 deduction)The no deduction of a Roth is in exchange for tax-free withdrawals after age 59½ (as long as you have had a Roth IRA for more than 5 years). Contributions to Roth IRAs can always be withdrawn tax-free, EVEN for beneficiaries! We are fans of Roth IRA conversions which allows any investor to pay taxes on their conversion amount, in exchange for no future taxes. Always do careful planning before “pulling the trigger” on a conversion.

If you ever encounter any difficulty navigating, understanding, or deciding amongst these options, you can always email info@DEMANDWEALTH.COM . For more complex situations, click here to schedule a $99 limited consultation video call. We want to ensure that every client, regardless of circumstances, have access to the tools they need to be successful.

This report is a publication of Demand Wealth. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change.


Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy (including the investments and/or investment strategies recommended by the adviser), or product made reference to directly or indirectly, will be profitable or equal to past performance levels.

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