3 Surprising Investments You Can Buy Through an Online Broker
KEY POINTS
- Cryptocurrency investing is available through several top app-based investment platforms.
- Some brokers allow investors to put money in CDs without opening a separate bank account.
- Some alternative investment strategies have historically been restricted to the wealthy, but can now be found offered through online brokers.
When you think about investing in a brokerage account, you probably think of investments like stocks, bonds, mutual funds, and ETFs. However, there are several other investment types that you might be surprised to learn are available to investors like you.
Let's look at three of the most interesting investment types offered by certain brokerage accounts to everyday investors.
If you're looking for an innovative broker that offers investments that appeal to you, click here for our up-to-date list of our favorite brokers right now.
1. Cryptocurrencies are available through some brokers
Some brokerages let you buy cryptocurrencies like Bitcoin and others in the same account where you own stocks and bonds. This is quite rare with "traditional" online brokers, but it's becoming more common with app-based brokerage platforms.
Robinhood is one great example of a broker that offers cryptocurrency investing. It not only offers an extensive list of popular cryptocurrencies, but it has some of the lowest fees in the cryptocurrency market. You can buy and sell Bitcoin, Ethereum, Dogecoin, Litecoin, and many others in Robinhood's top-rated app. WARNING SCL [brokerage slug=robinhood field=apply_url] does not generate a link. Anchor tag will not render in production..
2. You don't need to open CDs through a bank
Certificate of deposits (CD) are often thought of as a banking product, not an investment. And they certainly are. CDs are offered by FDIC-insured financial institutions and there are some great CD rates available through excellent online banks right now.
However, some popular brokers offer CDs through their platform. These are offered via partner banks, and are known as brokered CDs, but the key point is that you can put money into CDs directly through your brokerage account. Vanguard is a great example of a top broker that offers brokered CDs with maturities of up to 10 years (or even more) on its platform.
In addition to the convenience of investing in a CD without opening a separate bank account, there are some other benefits of using this method for CDs. Since the CD is owned in your brokerage account, you might be able to sell it to another investor before it reaches maturity (known as a secondary trade) and avoid paying the early withdrawal penalty typically associated with cashing in a CD early.
3. Alternative investments for everyone
The term "alternative investment" is a broad one that can refer to pretty much anything other than stocks, bonds, mutual funds, and ETFs that are usually available through brokerage accounts. Cryptocurrencies can qualify as an alternative investment.
In addition to cryptocurrency, some brokers are finding ways to add alternative investments that have historically only been available to wealthy investors. These can include pre-IPO companies, private credit, commodities, and more.
More investment types could be coming soon
The past several years has been an exciting period in the evolution of the brokerage industry, but it could be just the beginning. Options like 24-hour stock trading are reportedly under serious consideration, and the list of potential alternative investments that could be offered is significantly longer than what is already available.
In a nutshell, it would be surprising if there aren't even more investments available through top brokers in a few years.
Our Research Expert
Matt is a Certified Financial Planner™ and investment advisor based in Columbia, South Carolina, and has been writing about personal finance since 2011.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.