What is a Cash Account?
Our Cash Account is a bank account we open for you which will enable you to trade. You may view your Cash Account online at any time by clicking the ‘Portfolio Management’ tab on the website and then selecting your Cash Account under the ‘Cash Account Balances’ heading. You can review the Product Disclosure Statement and Terms & Conditions surrounding your Cash Account used for your trading at any time.
A Cash Account is an interest bearing account with BankWest, operated by CMC Markets Stockbroking under your instructions. Share purchases are debited from your account on the day of settlement and proceeds from share sales are credited to your account on the day of settlement. BankWest offers a competitive interest rate which is calculated on the daily balance of your account and credited monthly with monthly statements. There are no account and no government charges. Please note, funds on deposit with BankWest are not protected by the ASX National Guarantee Fund.
To trade with NAB OnLine Trading, you need to establish a Trading Account and nominate the Cash Account from which you fund your trades. The Cash Account is the account that funds are withdrawn from to pay for your share purchases and the account into which the proceeds of any sales are deposited. GST and our brokerage is deducted from the Cash Account.
A Brokerage account that does not allow for any extension of credit on securities is defined as a cash account, which includes retirement accounts and other non-retirement accounts that have not been approved for margin. All trades are accepted on the basis of receiving full payment in cash for purchases and good delivery of securities for sales by the trade settlement date. Transactions allowed in cash accounts are: purchases and sales of securities and, if approved for options trading, option purchases, cash covered puts and covered call writing. Short selling, uncovered option writing, option spreads and pattern day-trading strategies all require extension of credit under the terms of a margin account.
Cash accounts are brokerage accounts that require the client to render full payment for a transaction by the agreed upon settlement date. The nature of a cash account means that the customer is not granted the privilege of buying on margin, or utilizing borrowed money secured through the broker in order to purchase securities. Sometimes referred to as a special cash account, these cash only investment accounts are often utilized for both retirement nest eggs and trusts for minor children. The guidelines for the structure and administration of a cash account are set by what is known as Regulation T. Essentially, Regulation T is mainly concerned with setting the percentages of deposits that must be present in a margin account in order for the investor to buy on margin or for the broker to solicit loans for funds to be placed in a brokerage account. Regulation T does not allow either of these functions for a cash account. A cash account is an excellent option when the goal is to establish