What is the difference for an end user between a US bank account, and a US brokerage account that only stores the money in "cash"?

External question — Personal Finance Stack Exchange Author: HanMah Original post: https://money.stackexchange.com/questions/158813 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. A common response to my questions is "why exactly do you need to know this". So I'll start by saying that I am a US expat with money in the US. Recently, many banks started requiring 2FA from a US phone number. I was looking for a solution, and many people suggested buying a voip phone number, or claiming that I live with a US relative, and use the relative's phone number. I do not what to do anything misleading when it comes to banking. I was looking for an account where I can be upfront about me not living in the US nor having a US phone number. One possible solution I found was to store money in a Schwab One International broker account . I do not plan on using the money I place in the broker account for investment. I am looking for a place to park money, be able to send and receive money, pay off US credit card bills, write and deposit checks, and possibly other similar things. I am okay with missing out of the few dollars I might earn in bank interest per year. So now for my question, what is the difference for an end user between a US bank account, and a US brokerage account that only stores the money in "cash"? All of the things I listed above can be done with my brokerage account. It looks like the money is insured like with a normal bank account . I tried calling support to see if they knew the answer, but the representative was confused by my question and just said that while it would offer all of the services that I asked about, it wasn't a bank account. What is the difference?

External answer — Personal Finance Stack Exchange Author: unknownprotocol Original post: https://money.stackexchange.com/a/158815 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I have a Schwab brokerage account and their Schwab Bank Investor Checking account (which is just a regular checking account with a APY). The brokerage account has no interest IIRC, and is not federally insured. It's just an account that you put cash in to invest, or to withdraw from investments. It's not really designed to be a checking account, and it likely lacks the liability protections (like say for fraud) that normal checking accounts would have. There's no debit/ATM card for the brokerage account, like there is for the checking account. You can transfer money between the brokerage and the investor checking, but normally you don't really use the brokerage account unless you're putting money into it to invest, or getting money from investments out.

External answer — Personal Finance Stack Exchange Author: littleadv Original post: https://money.stackexchange.com/a/158818 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. So now for my question, what is the difference for an end user between a US bank account, and a US brokerage account that only stores the money in "cash"? You'll need to read the account terms and conditions. I was "yelled at" by Fidelity reps for using their brokerage account as a bank account without making any investments for a while. Both Schwab and Fidelity do have a cash management account, which is not a brokerage account and is more akin to a traditional bank account. Generally you should be able to get checks and ATM access with these accounts, and IIRC they even refund ATM fees. The main difference is regulatory: brokerages are not banks and follow somewhat different rules. For example, bank accounts are insured by FDIC while brokerage accounts are insured by SIPC. This is probably not the most important difference.