Benefits of Investing in Taxable Accounts

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The benefits of investing in taxable accounts is that the investor is free of restrictions and able to withdraw and use funds as they see fit. Use tax-free instruments within a taxable account with instructions from an investment portfolio manager in this free video on investing and personal finance.

Part of the Video Series: Investing & Retirement Funds
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Video Transcript

The benefits of investing in a taxable account. In a taxable account you really are free of the restrictions of a tax deferred account. You are not worried about taking withdrawals that may incur a penalty. You are paying the taxes on a consistent basis so really all the money there is available to be used and worked with. In a taxable account you have the ability to use tax free instruments so you may find some tax free bonds and municipal bonds, things that are tax advantaged and that will give you the ability to use money that is in a taxable shell in this taxable account but you are investing with tax free instruments and that gives you an advantage only in that you are not restricted by the type of account. The type of account will let you buy and sell at will but if you find better quality or higher yielding tax free instruments those tax free instruments are going to give you some of the same benefits as someone who is in a more restricted account such as an IRA or a qualified plan so really the advantage of a taxable account is ease of moving money in and out and lower restrictions.

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