Investing

What to do with cash in a margin account

  • Last Updated:
  • Jun 4th, 2018 5:42 pm
[OP]
Newbie
Jun 9, 2017
66 posts
36 upvotes

What to do with cash in a margin account

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.
4 replies
Deal Addict
Jul 3, 2006
2507 posts
1344 upvotes
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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Deal Fanatic
User avatar
Jun 19, 2009
6133 posts
1980 upvotes
Scarborough
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.
Member
Jan 18, 2007
338 posts
26 upvotes
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/
Deal Addict
Feb 20, 2006
1185 posts
47 upvotes
Vancouver
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%.

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