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Cash Trading Account
A cash account is a gateway to self-directed trading. It can be used to pursue most investment goals regardless of whether you’re a new or seasoned investor. You can open your account as an individual, joint with another account holder, for your business, etc. However, with a cash account, you can only use the cash available in your account to buy investments. However, unlike a margin account, you can’t borrow money in this account for trading. Here are some benefits of opening a cash account with TD Direct Investing or TD Easy TradeTM.
Through the TD Direct Investing Platforms, you can also take advantage of investment services, such as Dividend Reinvestment Plans (DRIPs) and Systematic Investment Plans (SIPs), to help build your portfolio.
Getting Started with Cash Accounts
A cash account is a basic account type to invest in stocks or ETFs if you invest using TD Easy TradeTM and can also include mutual funds, bonds, and more, when trading on TD Direct Investing platforms Learn how the timing of deposits and the settlement of a trade can impact the funds you have available to withdraw and trade.
How Cash account works?
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T+1 |
Most securities settle one business day after the transaction date. |
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No margin trading |
You can buy investments only with the funds available in your account. |
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Flexible fund management |
Deposit and withdraw funds anytime. |
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No withholding taxes |
There are no taxes withheld on withdrawals but you will still be liable to pay taxes on any investment income or capital gains earned within the account. |
Comparing Cash to Margin account at TD Direct Investing and TD Easy Trade™
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Cash Accounts |
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While using TD Easy Trade, am I eligible for this account?
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No
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yes
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What are the available investment types?
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For TD Direct Investing only: Stocks, mutual funds, ETFs, Options, and fixed income
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Stocks and ETFs for TD Direct Investing and TD Easy Trade. Mutual funds and fixed income for TD Direct Investing only
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Can I buy securities using leverage?
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Yes
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No
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Can I trade options?
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Yes
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No
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Is short selling permitted?
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Yes
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No
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Can I trade with TD Active Trader?
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Yes
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No
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Start investing on your own
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Got questions? We have answers.
Free riding usually happens when you buy and sell a security without the intention of paying for it. For example, you purchase a stock for more than the funds available in your cash account and immediately sell the same stock without showing any intention for paying for the initial purchase, this would be considered free riding. This could lead to restrictions placed on your account where you would be required to have all cash upfront before placing a trade.
While a trade date is the date on which securities are bought or sold, a settlement date is the date when traded securities are actually delivered, paid for and the change is entered into the company's books and records. Though settlement period can vary depending on the securities traded, it generally takes up to one business days.
Typically, there is no restriction on the number of day trades you can place within a cash account. However, you can only day trade with settled funds i.e., the funds that are available in your account. As cash accounts require at least one business day settlement time for proceeds from sales, you can buy and sell the same stock in a day, but you will not have immediate funds from that sale to buy again for one business day.
Cash accounts are usually considered ideal for long-term investors who buy and hold assets for a long time. Generally, margin accounts are more appropriate for day traders as it also allows short selling and buying on margin – two key features that are not available in cash account.
In a cash account, you can hold a variety of investments similar to those allowed in other registered accounts. These include:
In a cash account, you can hold the same investment types as allowed in other TD Easy Trade accounts. These include:
- Stocks
- Exchange-traded funds (ETFs)
If you are a temporary resident of Canada with a Canadian work or study permit, you may be able to open a TD Direct Investing non-registered cash account by completing an account application at a TD Canada Trust branch.
You must bring the following documents to the branch:
- Foreign Passport
- Canadian Temporary Social Insurance Number (SIN)
- Canadian work or study permit, with an expiry greater than 6 months from the date you apply
Note: The account application cannot be completed online for temporary residents. To apply for an account, book an appointment at your nearest TD Canada Trust branch. For more information, please visit this page.
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