# Do You Keep Cash in Your Brokerage Account?



## peterk (May 16, 2010)

Just curious how people make quick buys at their brokers. I generally haven't kept any cash there. But sometimes I feel I'm missing opportunities having to wait two days to transfer from ING to BMO, then 2 more days from BMO to Questrade.

I'm on the fence because I consider the lag-time a good period to reflect and make sure I'm not jumping into something on a whim, but when I see a stock plunge on a particular day I feel a lot of "I should be buying that right now!" emotions...

What do you folks do?


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## james4beach (Nov 15, 2012)

Myself, no I don't keep cash in the broker account and I'm never in such a hurry that I need to act within a day.

However if you have a margin account I believe you can just go ahead and make your purchase now, and then make sure the cash is in the account before T+3 settlement and you won't owe any interest (I think - maybe someone can verify)


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## Spudd (Oct 11, 2011)

I only invest within TFSA & RRSP at the moment (I figure any cash I have is better served in the mortgage than the stock market). So, if I have cash I obviously leave it in there since withdrawing from registered accounts is a hassle. I put it into the HISA mutual fund that pays 1.25% (TDB8150 I believe it is). 

If I was investing in cash as well, I would probably just do the same thing - put any cash I have earmarked for investing but not at the moment into an HISA fund. That way it also becomes CDIC insured.


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## 6811 (Jan 1, 2013)

Yes I currently keep cash in High Interest Savings Accounts (DYN1300) in my various brokerage accounts. It's convenient. I use them to accumulate enough to make the brokerage fees inconsequential when buying shares, and to park shorter term deposits that eventually will go to my RRSP or TFSA. 
Before I retired I used to use a CSB payroll savings plan at work which was useful for the automatic payroll deductions, but CSBs (and Bank savings accounts) interest rates are dismal, even compared to the 1.2% HISA rate, so I started moving it out when I'd accumulated a worthwhile bit.


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## Jon_Snow (May 20, 2009)

Got 30k in TD brokerage account ready for any opportunities that are kind enough to present themselves. 

I've always kept a good chunk of cash here and has served me well quite often.


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## Synergy (Mar 18, 2013)

james4beach said:


> However if you have a margin account I believe you can just go ahead and make your purchase now, and then make sure the cash is in the account before T+3 settlement and you won't owe any interest (I think - maybe someone can verify)


I believe you can do the same with TDB8150 - at least I've been doing this at TDW. Purchase a stock or ETF and sell enough TDB8150 to cover the purchase.

Currently I've got quite a bit of cash sitting in TDB8150


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## brad (May 22, 2009)

peterk said:


> Just curious how people make quick buys at their brokers. I generally haven't kept any cash there. But sometimes I feel I'm missing opportunities having to wait two days to transfer from ING to BMO, then 2 more days from BMO to Questrade.


Do you have a Thrive chequing account at ING? If so, you might be able to transfer directly to Questrade (if Questrade is listed in their payee database) as a "payment," which is just a one-step process. That's how I do it with TD Waterhouse, anyway: I can transfer money directly from ING to TD as a "bill payment." It usually takes just a day or two for it to show up in my TD brokerage account.


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## liquidfinance (Jan 28, 2011)

james4beach said:


> Myself, no I don't keep cash in the broker account and I'm never in such a hurry that I need to act within a day.
> 
> However if you have a margin account I believe you can just go ahead and make your purchase now, and then make sure the cash is in the account before T+3 settlement and you won't owe any interest (I think - maybe someone can verify)



That is the case with Questrade.


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## daddybigbucks (Jan 30, 2011)

I think after watching Jon on here, i caught on to the opportunity-watching as well. I keep a healthy cash balance in all my accounts to grab those quick deals.


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## liquidfinance (Jan 28, 2011)

brad said:


> Do you have a Thrive chequing account at ING? If so, you might be able to transfer directly to Questrade (if Questrade is listed in their payee database) as a "payment," which is just a one-step process. That's how I do it with TD Waterhouse, anyway: I can transfer money directly from ING to TD as a "bill payment." It usually takes just a day or two for it to show up in my TD brokerage account.


Yes they are which is what I do.


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## brad (May 22, 2009)

liquidfinance said:


> Yes they are which is what I do.


In that case, peterk, you should switch to this approach unless your only account at ING is an investment savings account. It would actually be worth opening up a Thrive chequing account just to have the convenience and time savings of eliminating the need to transfer from ING to BMO.


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## AltaRed (Jun 8, 2009)

Most major brokers have their in-house HISA accounts. That is where I keep cash @ 1.25% give or take. HISA sales are T+1 allowing plenty of time to make the sale to pay for equities that settle at T+3. Doesn't work for bonds or GICs though. The cash must be there to execute the purchase of those (immediate settlement).


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## Ag Driver (Dec 13, 2012)

When transferring cash from my credit union to my Qtrade account, at first I had thought that I must wait for the cash to show up at Qtrade. This is not the case -- So long as they see the transfer coming, they will approve the purchase. Check with your broker and see.

I have very little cash sitting in my trading account. What ever is there is due to dividends piling up towards my next purchase.


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## My Own Advisor (Sep 24, 2012)

I try and keep about $1000 in cash. Everything else is invested.


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## PatInTheHat (May 7, 2012)

I keep about 5% of my portfolio in cash to play with. For example today I bought POT at 30.08 and sold for 31.08. Sometimes I invest this money for longer periods but mostly I use it for quick returns whenever I think there are irrational corrections.


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## Sampson (Apr 3, 2009)

lots.

I'm with RBC DI. Transfer of cah from the brokerage to the bank is instantaneous and i used to move all cash from non-registered accounts, USD and CAD, into the high interest savings accounts at the bank. I don't bother so much anymore and accumulate non-DRIPable divies, and the surplus from DRIP in the acconnts themselves.

For registered accounts, I allow cash to accumulate since I don't want to tie up the cash in a HISA fund, which takes several days to mobilize.

Opportunity cost of lost interest is negligible in my eyes.


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## 6811 (Jan 1, 2013)

[


> QUOTE=Sampson;203711]lots.
> 
> For registered accounts, I allow cash to accumulate since I don't want to tie up the cash in a HISA fund, which takes several days to mobilize.


Cash from my HISA fund is available same day in my registered accounts at I*Trade. I did make the mistake once of selling some shares in a stock and immediately transferring the funds to a HISA, which resulted in an interest fee at the end of the month. The stock transaction takes three days to complete, the HISA 24 hours.


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## Captain Cook (Sep 12, 2013)

The only accounts I deliberately keep cash in is within both my wife & mine TFSA accounts ... it severs two purposes, main reason is to be ready to nab over sold stocks or sudden dips, and the other is an emergency fund.


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## mike06 (Aug 4, 2011)

6811 said:


> [
> 
> Cash from my HISA fund is available same day in my registered accounts at I*Trade. I did make the mistake once of selling some shares in a stock and immediately transferring the funds to a HISA, which resulted in an interest fee at the end of the month. The stock transaction takes three days to complete, the HISA 24 hours.


crap i actually just did this the other day. what kind of fee can i expect


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## 6811 (Jan 1, 2013)

mike06 said:


> crap i actually just did this the other day. what kind of fee can i expect


8% - better than credit card debt I suppose


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## pwm (Jan 19, 2012)

When I look at TDB8150 in WebBroker the "yield" field is blank. So are all the other fields for that matter. Do you know for a fact that the current yield is 1.25% ?


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## pwm (Jan 19, 2012)

Just answered my own question: I just tried a "Quick Quote" on TDB8150 and it shows 1.25% there.


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## mike06 (Aug 4, 2011)

6811 said:


> 8% - better than credit card debt I suppose


wow. 8% of the interest earned? or amount transferred?


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## 6811 (Jan 1, 2013)

No, it's bank interest. I hope no one had a heart attack!!!  
The DYN1300 buy was for $8,900 (a small part of that $8,900 may not have been outstanding, I.E. I may have had some cash in the account already).
The actual interest fee was $3.59.


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## mike06 (Aug 4, 2011)

Oh thats not too bad, I had a feeling it couldnt possibly be 8% of the total


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## pwm (Jan 19, 2012)

I just put in an order at TDW for TDB8150 to clear out my cash balance. I used to use TDB164 to temporarily park my cash, but gave up on that years ago. I have an HISA at a credit union at 1.8% but TDB8150 will be more convenient.


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## Retired Peasant (Apr 22, 2013)

pwm said:


> Just answered my own question: I just tried a "Quick Quote" on TDB8150 and it shows 1.25% there.


You can always get it at https://www.tdassetmanagement.com/solutions/additional-solutions/td-investment-savings-account/index.jsp?ComponentId=127316&SourcePageId=130268


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## fraser (May 15, 2010)

A little, but not much. Move it over to a 1.9 daily interest account electronically.


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## AltaRed (Jun 8, 2009)

fraser said:


> A little, but not much. Move it over to a 1.9 daily interest account electronically.


If you move HISA money outside your brokerage institution corporate family, it will take more than a day, perhaps 2 days, to actually move HISA money back to the brokerage to pay for a T+3 equity purchase. That is simply too inconvenient and pushes timing limits for most people. I always keep enough money in my brokerage HISA, or within the same corporate family, to pay for a single opportunity purchase, e.g. $20-30k.


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## Eder (Feb 16, 2011)

By keeping cash in the brokerage account it is often easy to make 5% in a couple of days rather than 1.8%/yr. ie: Interpipeline crashes below $20 for no real reason a few months ago...I know lots of us posters used cash to jump on it.


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## mrPPincer (Nov 21, 2011)

AltaRed said:


> If you move HISA money outside your brokerage institution corporate family, it will take more than a day, perhaps 2 days, to actually move HISA money back to the brokerage to pay for a T+3 equity purchase. That is simply too inconvenient and pushes timing limits for most people. I always keep enough money in my brokerage HISA, or within the same corporate family, to pay for a single opportunity purchase, e.g. $20-30k.


FWIW some of the HISAs that are currently paying 1.9% come with chequebooks, so you can simply go to the local TD branch and write a cheque within the T+3 time period for those single opportunity purchases, and still collect interest until the cheque does clear.


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## MrMatt (Dec 21, 2011)

Anyone know the "best" USD HISA/fund for a TD brokerage account?


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## AltaRed (Jun 8, 2009)

MrMatt said:


> Anyone know the "best" USD HISA/fund for a TD brokerage account?


The in-house one most likely to avoid potential administrative fees for early redemptions. Many, if not most, brokers (certainly RBC DI and Scotia iTrade) have these constraints on external HISAs. Given USD HISAs only pay in the order of 0.25-0.35%, it doesn't make much difference.


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## Guban (Jul 5, 2011)

6811 said:


> No, it's bank interest. I hope no one had a heart attack!!!
> The DYN1300 buy was for $8,900 (a small part of that $8,900 may not have been outstanding, I.E. I may have had some cash in the account already).
> The actual interest fee was $3.59.



Don't forget to claim it as an investment cost on your income tax return if it is in a taxable account! This should soften the blow a bit more.


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## wendi1 (Oct 2, 2013)

Yes, I leave cash in my brokerage account - when it gets to 3-4K I start to look around for something to put it into. I suppose I could move all the dividends and interest payments and contributions into a savings account, but it seems like an awful amount of work for the piddly little amount of interest I would get.


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## marina628 (Dec 14, 2010)

wendi1 said:


> Yes, I leave cash in my brokerage account - when it gets to 3-4K I start to look around for something to put it into. I suppose I could move all the dividends and interest payments and contributions into a savings account, but it seems like an awful amount of work for the piddly little amount of interest I would get.


+1 I regularly trade in my TFSA so I usually do have $2000 -$5000 cash there.My non registered account I generally have around $10,000 cash there .


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