Investing

Interest free investing?

  • Last Updated:
  • Jan 6th, 2020 12:46 pm
[OP]
Deal Addict
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Aug 11, 2003
1618 posts
170 upvotes
C-53

Interest free investing?

RFD,

Is there such a thing as interest free investing? If so, what kind of investment would that be? Ex: CDs, Stocks, Bonds, ETFs etc?
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3 replies
Deal Addict
Jun 28, 2018
1017 posts
753 upvotes
Toronto
Hmmmm...

Not sure if I misunderstood, but I think you are talking about investing using cash? That's 0% interest.

However, using derivatives like options and shorting requires a margin account, which implies potentially using leverage which when used and results in a debit balance would have an interest charge.
The Distracted Investor

Dividends through quality companies 😃 Though I usually lose money with trades :facepalm:
Deal Addict
Nov 9, 2013
4544 posts
4828 upvotes
Edmonton, AB
doomhammer wrote: RFD,

Is there such a thing as interest free investing? If so, what kind of investment would that be? Ex: CDs, Stocks, Bonds, ETFs etc?
I also don't understand - what do you mean by "interest free"? Do you mean that what you are paid is something else, that is not classified as interest (for tax purposes)?

If so, capital gains and dividends would be considered "interest free".
Keep calm and go long
Newbie
Nov 21, 2009
18 posts
1 upvote
North York, ON
johnnychi wrote: Hmmmm...

Not sure if I misunderstood, but I think you are talking about investing using cash? That's 0% interest.

However, using derivatives like options and shorting requires a margin account, which implies potentially using leverage which when used and results in a debit balance would have an interest charge.
just to clarify buying option does not require using margin although it may depends on brokerage. On questrade you can buy options in any of the MARGIN/TFSA/RRSP account. there is still leverage in term of gain/loss % derive from underlying price but you not going to lose more than what you pay for buying options.
Selling options does require margin though

also strictly speaking I think all financial products are affected by interest rate(central bank rate) changes so there is really nothing interest free unless you mean the Halal(islamic) investment

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