What to do with cash in a margin account

fellowcurve2 wrote: ↑ I trade stocks using Questrade, I currently have a large amount of cash in the margin account. Due to recent market volatility, I plan to wait before going all in. Is there a way to earn interest for the spare cash in the margin account? I might need the cash to buy stocks in less than 2 days so transfer to a bank saving account is not the best option for me.

Interactive brokers pays you on cash amounts

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Trades settle in 2 days now anyway, so you can buy the stock today for example, and then fund the account in time for when it settles on Wednesday. Whenever I do a bill payment to fund my account, the funds always arrive the next business day.

High Interest Savings Account traded as mutual funds (e.g. ATL5000). They pay around 1.1% currently. Last I checked questrade will charge you 9.99$ for the trade, some other brokerages like big banks don't charge a fee for some of these kinds of trades. Depending on who much you're buying and how many months you're holding onto it, paying 10$ may still be worth it.

Some references:
http://www.finiki.org/wiki/High-interes ... gs_account
http://canadiancouchpotato.com/2010/10/ ... portfolio/

You could use a very short term bond ETF such as ZST. This has very low volatility (behaves more or less like cash) and pays out something about 1.5% with a MER of 0.17%. Past performance shows a very steady decrease in NAV of about 1.5%/year, and the payouts have been about 3.0%, for a net of about 1.5%.