What's the difference between a cash account and a margin account for a beginner?

A cash account requires you to pay in full for every purchase using money you actually have, which keeps things simple and safe. A margin account lets you borrow money from the broker to buy more securities, using your holdings as collateral, and it also enables features like short-selling. Borrowing amplifies both gains and losses, and if your investments fall the broker can issue a margin call forcing you to add cash or sell at a bad time. For nearly every beginner and long-term index investor, a plain cash account is the right choice; there's no reason to take on borrowing risk to buy index funds. You can always upgrade later if you develop a specific need, but margin's leverage has wiped out many inexperienced investors, so start with cash.