If you want to trade on the stock exchange, you need to open a BS and / or IIS. Any of these options will allow you to earn additional income. By the way, you can open both accounts and use them in parallel. Today we will figure out how a client’s brokerage account differs from IIS and what is more profitable for an ordinary Russian.
To understand which option is better, you need to know what these concepts are. It is quite possible that many readers hear such expressions for the first time.
First, let’s deal with a brokerage account, consider its advantages and disadvantages, and then move on to the analysis of IIS.
What is a brokerage account
BS is a type of account that takes into account transactions and assets of the client. When it is opened, a service agreement is drawn up, and operations on the exchange occur on behalf of the client.
An ordinary citizen cannot go through direct registration on the exchange in order to start trading or investing. To do this, you need to have a license from the Central Bank of Russia. It is issued to a brokerage company that will act as an intermediary between the exchange and the physical. face.
By opening a BS, you, based on your interests, allow the intermediary to buy/sell securities, i.e., to make exchange transactions.
With the help of a brokerage account, you can invest in securities, buy and sell currencies, earn on the exchange rate difference, and receive dividend payments. The client’s annual income is subject to a 13% tax, and from 2021, if it exceeds 5 million rubles, the specified tax indicator is increased by 2 points.
Benefits of a brokerage account
- BS is more suitable for active trading. If you intend to conclude many transactions, regularly withdraw money without terminating the agreement and replenish large amounts without restrictions, such an account would be the best option.
- Transactions with bonds (OFZ-N) are allowed for individuals. individuals and on foreign exchanges.
- Transfers to the BS can be in different currencies: British pounds, US dollars, euros, yuans, etc.
- Withdrawal of client funds is not limited either in time or in amount.
- If the term of the securities exceeds 36 months, their owner will receive a tax deduction upon sale at a profit. 3 million rubles are needed. multiply by the number of years of ownership of valuable assets. The amount received is not subject to income tax.
- There is another similar perk. If you buy securities of domestic high-tech companies (there are 17 of them at the beginning of June 2022) on the Moscow Exchange, hold them for at least 12 months and sell them at a profit, you will be exempt from personal income tax.
Cons of a brokerage account
- BS is suitable for people who can invest amounts from 1 million rubles. Since active trading is assumed here, investments are usually short-term. Therefore, you cannot count on tax deductions.
- A little higher, in the “Pros” section, we mentioned benefits for BS. However, the securities must be purchased later than 01/01/2014 and their holder must be a tax resident of the Russian Federation.
To understand that it is better to open an IIS with a replenishment amount of up to 1 million / year or a brokerage account with an unlimited replenishment, you need to understand the IIS.
What is an individual investment account (IIA)
This is another, special, type of BS.
With the help of IIS, you can also buy/sell:
IIA has a preferential tax regime and is usually open for long-term investments. However, you will have to wait 36 months to withdraw money. Otherwise, the tax deductions received earlier will have to be returned, and the account will be closed.
For novice investors, IIS is an excellent tool for generating passive income. If you annually replenish the account from 400 thousand rubles. and pay personal income tax, you can receive a tax deduction of 13% of the invested amount every year, but the maximum amount is 52 thousand rubles.
The calculation of tax on profitable transactions occurs only when the IIS is closed. Those. until the account is closed, the money does not go to the tax office. This means that profits can be invested many times, receiving additional income!
Advantages of IIS
- When replenishing an account in the amount of 400 thousand per year, you can receive up to 52 thousand in the form of a tax deduction. It is allowed to withdraw coupons and dividends to a bank account.
- If you invest up to 10 thousand rubles a month. and keep funds on IIA for 36 months, you will be able to save 360 thousand, purchase bonds or other conservative instruments with a yield of up to 4-6%, and qualify for tax exemption!
Cons of IIS
- IIS is recommended to open for long-term investment. Hence its shortcomings.
- Three years is not allowed to withdraw funds. If you violate this condition, the account is automatically closed, you will have to return tax deductions, and penalties will be charged for late payment of tax! Only one IIS can be active. Account replenishment is limited.
- The annual limit is 1 million rubles. If you want to invest more money, you will have to open a brokerage account in parallel. It is allowed to buy foreign securities traded only on the stock exchanges of the Russian Federation. Tax residents of the Russian Federation are allowed to open IIS, and only domestic currency can be deposited into the account.
difference between accounts
What is better to open an IIS with investments in the long term or a brokerage account with unlimited deposits and withdrawals?
It is necessary to understand the main differences between BS and IIS.
They are the following:
- BC owners must pay tax on their income, but IIA holders do not
- BS is allowed to replenish with any currency, IIS – domestic
- It is allowed to invest money on BS for any period, and on IIS – from three years
- On the BS there are no limits on replenishment, withdrawal and physical. a person has the right to open many such accounts. The annual limit for replenishment is 1 million, withdrawal of funds is allowed after 3 years, and every individual has it. faces can be one.
Tips for choosing an investment account
There is no definitive advice here. It all depends on the purpose of the investor, the size of the amount, the duration of the investment period and activity on the stock exchange.
If your investment amount does not exceed 1 million per year, if you are not going to actively trade, but will only buy securities for a long time, we advise you to choose IIS. The value of securities of proven companies may rise and fall, but in the long run, their price always goes up. That is, you will receive a profit plus a tax deduction of up to 52 thousand / year.
If you are going to actively trade on the stock exchange, you are going to invest from 1 million rubles annually. want to withdraw funds without restrictions and at any time, a brokerage account is right for you
However, in any case, it is necessary to choose a reliable intermediary. Its staff must have highly qualified specialists, and the company must have a good safety rating.