Cash accounts are brokerage accounts that require the client to render full payment for a transaction by the agreed upon settlement date. The nature of a cash account means that the customer is not granted the privilege of buying on margin, or utilizing borrowed money secured through the broker in order to purchase securities. Sometimes referred to as a special cash account, these cash only investment accounts are often utilized for both retirement nest eggs and trusts for minor children.

The guidelines for the structure and administration of a cash account are set by what is known as Regulation T. Essentially, Regulation T is mainly concerned with setting the percentages of deposits that must be present in a margin account in order for the investor to buy on margin or for the broker to solicit loans for funds to be placed in a brokerage account. Regulation T does not allow either of these functions for a cash account.

A cash account is an excellent option when the goal is to establish a secure nest egg for retirement. Perhaps the best example of a cash account for this purpose is the Individual Retirement Account. An IRA is completely funded with cash deposits that are then invested on the part of the broker. Generally, the investments that are undertaken with the funds in an IRA are low risk in nature, guaranteeing a modest but consistent pattern of growth.

Trust accounts for minor children and other dependents are also common applications of the cash account. Parents who wish to provide future financial stability for their children in the event that one of both parents pass away often includes the ability of an administrator or legal guardian to access and use the funds until the children are of legal age. The structure of the cash account normally sets restrictions on how the funds may be used, and how much of the principal balance of the account can be withdrawn during a given calendar year.