What is the difference between a cash account and a margin account?

A cash account requires you to pay in full for every investment with your own money, while a margin account lets you borrow from the broker to buy more, using your existing holdings as collateral. For most long-term investors, a cash account is the right and safer choice — there's no interest to pay and no risk of a margin call forcing you to sell at a bad time. Margin amplifies both gains and losses, charges interest (often 7–12% annually), and can require you to add cash quickly if your account value drops below a maintenance threshold. Margin can also enable advanced strategies like short selling that beginners should avoid. Unless you have a specific, well-understood reason to use leverage, choose a cash account. You can always request a margin upgrade later if your needs change.