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Scotia Itrade DYN6004
April 4, 2024
9:08 am
AltaRed
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kesa said

we are on the same page.

if it were unprofitable for the FI this surely would change.  

The brokerage does not actually have the cash in the account from the ISA sponsor until well into settlement day (exact time I do not know). The brokerage cannot let you withdraw cash they do not yet have. What are they going to do with cash for a period of 12 hours or so? What is hard to understand about that?

However, I will agree there should be a way to access the cash after COB on settlement day....and I think some brokerages allow that if it is an internal transfer to another account at same institution.

In most cases, folks with brokerage accounts are not the least bit interested in removing investment income as cash to move elsewhere, at least not in the near term, e.g. days or weeks. Most times, investors with brokerage accounts are re-investing within the brokerage account and that can be done the day before, or on, settlement day.

Brokerages are agents for the assets/products held in accounts. Go elsewhere rather than complain about processes and procedures that are well understood by those investing via brokerage accounts.

April 4, 2024
11:15 am
savemoresaveoften
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AltaRed said

The brokerage does not actually have the cash in the account from the ISA sponsor until well into settlement day (exact time I do not know). The brokerage cannot let you withdraw cash they do not yet have. What are they going to do with cash for a period of 12 hours or so? What is hard to understand about that?

However, I will agree there should be a way to access the cash after COB on settlement day....and I think some brokerages allow that if it is an internal transfer to another account at same institution.

In most cases, folks with brokerage accounts are not the least bit interested in removing investment income as cash to move elsewhere, at least not in the near term, e.g. days or weeks. Most times, investors with brokerage accounts are re-investing within the brokerage account and that can be done the day before, or on, settlement day.

Brokerages are agents for the assets/products held in accounts. Go elsewhere rather than complain about processes and procedures that are well understood by those investing via brokerage accounts.  

For CIBC IE, it may not get added to the cash balance until end of day, but can transfer it to bank account, or use it for new purchase, even for registered account. So yes its accessible even tho it does not appear to be.

April 4, 2024
11:43 am
AltaRed
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savemoresaveoften said

For CIBC IE, it may not get added to the cash balance until end of day, but can transfer it to bank account, or use it for new purchase, even for registered account. So yes its accessible even tho it does not appear to be.  

I assume you mean if staying within the CIBC family. Just as it would be for the Scotia family. I have used DYN ISA proceeds in a similar way within the Scotia system. The complaints appear to have been regarding cash withdrawals out of the Scotia system not being possible until the following business day, albeit 'cash withdrawals' was not defined precisely.

The accusation that Scotia iTrade was getting free use of cash interest for a day is simply not true. There might be a ~12 hour 'float' period but that would be about it. I don't know time of day (or night) the banking system transmits funds between each other.

April 4, 2024
1:36 pm
kesa
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AltaRed said

Go elsewhere rather than complain about processes and procedures that are well understood by those investing via brokerage accounts.  

time for the bank apologists to realize that oligopolistic processes and procedures from 30 years ago need to go. these money printer freebies help them not YOU. 🙂

for those that don’t know. they have committees looking for new ways to squeeze the dumb deposit base all the time!

April 4, 2024
6:18 pm
AltaRed
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This thread really isn't about the banking deposit base which I have little knowledge of.

It is about ISAs purchased by investors through the FundSERV system via brokerages as agents for the banks that own ISA products. Both ISAs and Money Market mutual funds are bought and sold through the FundSERV system while Cash ETFs bought and sold through stock exchanges. The processes and timing of posting of monthly investment income (interest) by the brokerages is similar, if not identical, for all? of these products.

You are welcome to take it up with CIRO (Canadian Investment Regulatory Organization) on your ideas on how payment processes and settlement can be handled more quickly, i.e. same day as the transaction rather than the next business day. I don't really know how it could be faster other than perhaps settlement funds being exchanged before Noon EST, allowing investors to make fund transfers by COB same day. That would be a true T+1.

FWIW, I think it is a benefit to investors that the banks, Manulife, etc per Norman1's chart in another thread, developed a product that is CDIC insured and more or less competes directly with money market mutual funds. Their yields may not be quite as good as MMFs because the banks are an intermediary making a profit on them but they are competitive when F class (no trailer fee) versions are available to the DIY investor. Who can argue with CAD DYN6004 (5%) and USD DYN6005 (5.15%)?

April 4, 2024
10:37 pm
Norman1
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AltaRed said

You are welcome to take it up with CIRO (Canadian Investment Regulatory Organization) on your ideas on how payment processes and settlement can be handled more quickly, i.e. same day as the transaction rather than the next business day. …

Don't bother. Those kinds of complaints come from unreasonable expectations as the result of ignorance.

The banks themselves settle the net balances they owe to one another from clearing cheques, bill payment remittances, direct deposits, and other items the next business day:

… Specific participant financial institutions, referred to as direct clearers, participate directly in the ACSS. These participants handle the clearing and settlement of payments for their own customers, as well as for customers that maintain accounts at the other financial institutions, known as indirect clearers. Direct clearers must maintain settlement accounts at the Bank of Canada. Settlement of the previous day’s net balances occurs during the morning of each business day, where settlement account balances are extinguished via payments to and from the Bank of Canada.

April 5, 2024
4:41 am
savemoresaveoften
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kesa said
for those that don’t know. they have committees looking for new ways to squeeze the dumb deposit base all the time!  

Nothing wrong with that, I am a bank shareholder 🙂

Banks and any corporate will always and should try to squeeze the max amount of profit, and thats what it should be.
If anything its the governement AND charity organization that most of the time does NOT try to get the best bang for the buck in general, just because its NOT their money. That is something that bothers me the most.

April 5, 2024
4:44 am
savemoresaveoften
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AltaRed said
I assume you mean if staying within the CIBC family. Just as it would be for the Scotia family. I have used DYN ISA proceeds in a similar way within the Scotia system. The complaints appear to have been regarding cash withdrawals out of the Scotia system not being possible until the following business day, albeit 'cash withdrawals' was not defined precisely.

Yes and No. The IE account is only linked to my bank account anyway, so the first transfer is always within the family. Transfer between IE and bank account are processed and updated a few times a day, so depends on the time of day, the $ may hit my bank account during the day. Once its in the bank account, I am free to move it outside of the family.

April 5, 2024
5:09 am
RetirEd
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savemoresaveoften: And banks give themselves awards for coming up with "creative" new fees and traps, too.

RetirEd

April 5, 2024
7:32 am
AltaRed
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Norman1 said
The banks themselves settle the net balances they owe to one another from clearing cheques, bill payment remittances, direct deposits, and other items the next business day:

… Specific participant financial institutions, referred to as direct clearers, participate directly in the ACSS. These participants handle the clearing and settlement of payments for their own customers, as well as for customers that maintain accounts at the other financial institutions, known as indirect clearers. Direct clearers must maintain settlement accounts at the Bank of Canada. Settlement of the previous day’s net balances occurs during the morning of each business day, where settlement account balances are extinguished via payments to and from the Bank of Canada.

  

So technically the cash from ISAs, MMFs, etc. should be available post-Noon on day of Settlement.... which confirms the experience of some being able to transfer cash to their in-house bank accounts that same day, e.g. post #68, or even buy a GIC in their brokerage account (which I have done in the past).

April 5, 2024
6:57 pm
Norman1
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The fufnds are not necessarily available on settlement day. But, the brokerage firm can front the money out of its own funds or line of credit knowing the customer is good for it by the end of the day.

Scotia iTRADE does something like that when one sells some Scotiabank ISA. Some minutes later, the account's buying power is increased by the amount redeemed to allow one to place a buy order for another investment.

April 5, 2024
8:42 pm
AltaRed
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Indeed and I have used 'buying power' many, many times at both iTrade and BMOIL. Some folk are either not understanding, or do not want to accept, that buying power is not the same as cash in account available for a cash withdrawal.

April 6, 2024
8:33 am
Bill
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I'm one of those. I usually take my time to let things settle a few days, don't stack trades up together, so I don't really care but I have never understood iTrade's nomenclature, I don't know how they come up with their amounts. So "Buying Power" means that amount is currently available to make a purchase even if cash available is less?

April 6, 2024
9:05 am
AltaRed
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Bill said
I'm one of those. I usually take my time to let things settle a few days, don't stack trades up together, so I don't really care but I have never understood iTrade's nomenclature, I don't know how they come up with their amounts. So "Buying Power" means that amount is currently available to make a purchase even if cash available is less?  

The question mark beside Buying power states

What is buying power?

Buying power represents the maximum dollar value of cash that can be withdrawn or securities that can be purchased without depositing additional funds into the account.

In a margin account, where the security purchase or cash withdrawal will result in a large negative cash position, you must first contact us to arrange a mutually agreeable debit limit based on a number of account related factors.

Buying power is calculated based on a number of different factors such as the type of account, the cash available in the account and the amount and type of securities held in the account. Buying power will fluctuate when any of these factors change, including the purchase or sale of securities and the market value of the holdings.

That is not really useful for the average investor. What is more important for those who wish to withdraw actual cash is 'Withdrawal limit' which is actual cash in account at the moment.

For those of us investing within the account, 'trade date' cash is what can be used to buy more investments based on cash in account PLUS cash from trades made but have not yet settled. I often have used this to buy something new minutes after I have sold something else of the same or longer settlement time, e.g. T+2 buy for a T+2 buy, or a T+2 buy for a T+1 sell.

Most will wait for Settlement Day cash to show before making a new buy and that is the safest way if one forgets the variations in settlement times.

Settlement date cash includes cash available at the opening bell plus intraday cash expected to arrive. This one is important for buying GICs because GICs are T+0 settlement.

April 6, 2024
9:13 am
kesa
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Bill said
I'm one of those. I usually take my time to let things settle a few days, don't stack trades up together, so I don't really care but I have never understood iTrade's nomenclature, I don't know how they come up with their amounts. So "Buying Power" means that amount is currently available to make a purchase even if cash available is less?  

I think most of us are in the stay-away from margin account group. but dyk that iTrade allows for some margin buying power in cash accounts automatically? years ago I had to make a specific request to remove that.

in other words, at iTrade anyway, a cash account has some margin buying power

April 6, 2024
9:44 am
AltaRed
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One has to apply for a margin account to make use of margin. I have never been interested in borrowing to invest.....whether I had a margin account or not. I've never borrowed to buy anything other than a mortgage for a house, and that was paid off circa 1990.

April 6, 2024
10:31 am
Bill
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I didn't know that, kesa, thanks. I never asked for a margin account so I assume it's not one, I have no interest in margin, but that likely explains why it looks confusing to me.

I appreciate the explanation re buying power, trade date cash, settlement day cash, I think I'll just continue waiting a few days until things have settled before I deploy cash because I'm sure to get mixed up (each broker has different nomenclature) and I'm never in a hurry anyway.

April 6, 2024
11:45 am
savemoresaveoften
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just because it's setup as a margin account does not mean one has to buy on margin.
Having the account as margin vs cash just make it so much easier to trade, cuz it is not restricted to having the cash IN the account before one can even place a limit order for example.
I never buy on margin yet having a margin account my entire life. It's just more convenient.
It's like having $1000 in the wallet does not mean u have to spend it all when you go out. It gives u the option, not the obligation 🙂

April 6, 2024
1:26 pm
zgic
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I thought the non-registered brokerage account is always called Margin account. It does not mean I use margin. I am using it for so many years and never bought on margin.
I don't think there is any other non-registered brokerage account.

April 6, 2024
1:38 pm
savemoresaveoften
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zgic said
I thought the non-registered brokerage account is always called Margin account. It does not mean I use margin. I am using it for so many years and never bought on margin.
I don't think there is any other non-registered brokerage account.  

The wealthsimple non-registered account for example is a cash account, not margin by default.
And that is a pain cuz one has to keep moving funds from cash account over to the trading account before one can put in a limit order.

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