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Account types

Each account has its own characteristics, and it is important to properly assess the way you will be using your brokerage account in order to select the product that is right for you.

Non-registered accounts

National Bank Direct Brokerage offers a variety of non-registered accounts in which you can include an array of securities traded on an exchange such as the TSX, the Montréal exchange, NYSE or NASDAQ, or on a Canadian or U.S. OTC market.

Investment products held in non-registered accounts are subject to tax regulations each year.

Cash account

With a cash account, available in Canadian or American currency, you can start managing your investments. When you purchase securities, you are required to pay for them, at the latest, on their settlement date, except for the first transaction where you are required to have sufficient funds to cover the entire trade cost.

If you wish to trade in this account, you must carry a positive balance. You must ensure that it contains sufficient funds on the settlement date, as shown in the table below:

 

 Product  Settlement
 Money market instruments (Treasury bills)
 Same day
 Canadian and US options
1 business day
 Bonds issued and guaranteed by the Government of Canada and maturing in 3 years or more
 2 business days
 Strip coupons maturing within 18 months
 2 business days
 Strip coupons maturing in 18 months or more
3 business days
 Other securities  Contact us for all the details

Margin account

A margin account allows you to borrow some of the market value of the securities held in your account to purchase other investments. The maximum loan varies with the investment type and market value of the securities.

You first have to pay a certain amount of money, called the margin deposit, in partial settlement of the transaction. The sum of the margin deposit and the broker's advance equals the total cost of the trade.

Note that the use of borrowed money to finance the purchases of securities involves greater risk than purchases using your own funds. When borrowing money to purchase securities, you are required to repay the loan, including its cumulating interests, in accordance with its terms, even if the value of the securities purchased declines.

Security class Maximum NBDB loan* (financing
(as % of the market value)
Stocks ($5+) ** 70%
Stocks ($2+) 50%
Stocks under $2 Not permitted
Canadian mutual funds, in CAD or USD 50% (excluding money market)
Exception: Money market (Canadian mutual funds) 95%
Exception: NBC100 (Altamira High-Interest CashPerformer account in CAD) and NBC101 (Altamira High-Interest CashPerformer account in USD)
100%
Exception: BTB 100 Fund 0%
Government of Canada bonds 96%
Provincial and municipal bonds 95%
Canadian corporate bonds
50%
Strip coupons 90%
Placements Québec 0%
Canadian premium bonds and Canadian savings bonds 0%
Canadian commercial paper 90% 
Canadian or US Treasury bills 96%
GICs of major Canadian financial institutions
(ticker symbols: NA, RY, CIBC, TD, BMO, BNS, LB, MFC, IAG, SLF)
1 year or less = 95%

Between 1 year and 3 years = 90%

More than 3 years = 85%
Reduced margin GICs of Canadian financial institutions
(e.g.: CWB, CTB, PCB)
50%
Linked notes 50%

* National Bank Direct Brokerage may require, in certain circumstances, higher margins than those indicated in the table. If the price of the purchased securities drops, the broker’s advance is reduced and you will be required to pay additional margin.
**Securities that may be eligible for reduced margin only. High liquidity and low volatility are some of the criteria used to determine eligibility for reduced margins

Read more about buying on margin │ Open a margin account now


Margin account with short selling

The margin account with short selling, available in Canadian or American currency, allows you to sell, through us, securities you do not yet hold in order to buy them back at a lower price and thus realize a capital gain.

This type of account is intended for seasoned investors who have the financial means to maintain the margin required for such trades.

National Bank Direct Brokerage offers very competitive margin interest rates. Visit our Interest Rates page to view the applicable fees on CAD or USD accounts.

* Note that the use of borrowed money to finance short selling of securities involves greater risk. When borrowing money to sell securities short, you are required to repay the loan, including its cumulating interests, in accordance with its terms, even if the value of the securities changes. Fees may be charged for securities loans in short sales. These fees vary based on the markets and without prior notice. Contact one of our representatives for more information on these fees.

Margin deposit

 Minimum credit balances required by exchanges and IIROC  
 Security class  Minimum margin required (as a % of the market value)*
 Securities of $5 or more that can be eligible for a reduced margin  130%
 Securities trading at $2 or more  150%
 Securities trading between $0.25 and $1.99  200%
 Securities trading under $0.25  100% plus $0.25 per share
 Bonds  100% + (1 - NBCD maximum advance)

*In certain circumstances, National Bank Direct Brokerage may deem it necessary to require a higher margin, and reserves the right to close short positions if borrowing such securities is no longer possible. Exchanges determine the minimum margins required.

To learn more about short selling, visit our Short selling: How does it work?

Stock Savings Plan II (SSP II)
Stock Savings Plan II (SSP II) entitles Quebec investors to deduct their investments in common shares and investment fund securities issued on the primary market from their taxable income.

Any individual residing in Quebec on December 31 of the tax year can claim a deduction with respect to a stock savings plan. This tax benefit applies only at the provincial level, and deductions are limited to 10% of total income. Furthermore, securities must be held in the plan for two complete calendar years following the year in which they were purchased (i.e., through December 31 over three consecutive years). If you sell the shares before the end of those three years, you must substitute them with other qualifying securities in order to maintain the tax deduction.

A list of qualifying securities is published in a weekly bulletin available on L’Autorité des marchés financiers (AMF)’s website, under Section 6.11, Annexe 4 (French only).
Income account
Thanks to the income account, you have the opportunity to transfer the investment interest and dividends generated in your non-registered account to a bank account that you hold with the National Bank of Canada or any other Canadian financial institution.

It is possible to have an income account in Canadian or U.S. currency. Transfers to your Canadian income account occur daily, while transfers to a U.S. account occur on a weekly basis.

For the transfer to take place, the payment must be a minimum of C$10 (or US$10 in the case of a USD account).
COD account
With a COD account, payment transactions are settled by another financial institution or broker holding the securities in custody.

When a purchase is made, the other institution or broker sends a cheque and receives the certificate(s) for the securities. When a sale is made, the other institution or broker sends us the certificate(s), and we forward the cheque upon delivery.


Account available in Canadian or American currency.

Registered accounts

Whether you are planning for retirement or your children’s education, National Bank Direct Brokerage offers numerous registered accounts that allow you to accumulate investment income tax free.

Registered accounts provide greater tax efficiency since the investments you hold in them are not subject to tax regulations.

Tax-Free Savings Account (TFSA)

The TFSA is a savings instrument in which your money grows sheltered from taxes. You can now deposit up to CDN $10,000 per year per person, regardless of your income level, all the while having the right to contribute unused amounts from previous years, since 2009. Note that from 2009 to 2012, the maximum annual contribution was CDN $5,000 and for 2013 and 2014, the maximum annual contribution was CDN $5,500.


While your contributions are not tax-deductible under the Personal Income Tax Law, the income generated from your investment (interest, dividends and other) and capital gains are not taxable, even when withdrawn.

As its name indicates, the tax-free savings account is a savings tool. Depending on your needs, it can be used for your retirement, for short and long-term projects, such as buying a car, renovating a home or taking a sabbatical, or simply as an emergency fund.


This account available in Canadian or American currency.

To learn more about the TFSA, visit our TFSA: How does it work?

Registered Retirement Savings Plan (RRSP)
An RRSP allows you to save funds sheltered from taxes, in preparation for your retirement, all the while reducing your personal income tax levels.

Contributions to an RRSP can be deducted from your annual income for the year during which the contributions were made. Deposited amounts are subject to the tax rate in effect at the time of the withdrawal, i.e., at retirement.

In fact, you will have to convert your RRSP account in a registered Retirement Saving Plan (RRIF) before December 31st of your 71st birthday.

You can contribute regularly by taking advantage of our periodic investment strategy or by transferring funds via our website.

However note that for a purchase order to be accepted, funds must be available in cash. Also, the federal government does not allow securities traded on a U.S. OTC market (Pink Sheet) in RRSPs.

This account available in Canadian or American currency.

To learn more about RRSP accounts, visit our RRSP: How does it work?

Locked-in retirement account (LIRA)
The LIRA is a retirement savings instrument in which you can transfer the value of your lock-in rights accumulated in a registered pension plan (RPP) or life income fund (LIF) of provincial jurisdiction.

The funds deposited to a LIRA must come from the transfer of assets accumulated in a provincial retirement plan.

Anyone who leaves a place of employment after two years of participation in a pension plan can transfer his/her contributions to a LIRA.

You can open a LIRA up to December 31 of the year in which you turn 71. The LIRA must then be converted into a provincial LIF or life annuity.

Note that this account is available in Canadian or American currency and that it is not possible to withdraw from a LIRA.

Locked-in RRSP account
The locked-in RRSP account is a retirement savings instrument in which you can transfer funds accumulated in a pension plan or federal LIF.

Anyone who leaves their place of employment after two years of participation in a pension plan can transfer his/her contributions to a locked-in RRSP account.

You can open a locked-in RRSP account up to December 31 of the year in which you turn 71. It must then be converted into a federally chartered life annuity or LIF no later than December 31 of the year you turn 71.

Note that this account is available in Canadian or American currency and that it is not possible to withdraw from a locked-in RRSP account.


Registered education savings plan (RESP)

Rising education costs make it increasingly imperative to save for your children’s post-secondary studies.

If you wish to invest in your children’s future, it is in your interest to sign up for a registered education savings plan (RESP). These accounts are designed to help you finance their postsecondary education by giving you the opportunity to grow your savings sheltered from taxes.

The self-managed RESP also allows you to take advantage, granted you meet the eligibility criteria, of the Canada Education Savings Grant (CESG), grants given by some provincial governments, the Canada Learning Bond (CLB) and other advantageous tax benefits.

To learn more about the RESP, visit our RESP: How does it work?
Retirement income accounts (RIA)

Like every other investor, you will need to convert your registered accounts (RRSP, LIRA and locked-in retirement RRSP) at the latest during the year you turn 71.

A variety of investments can be held in a RIA. The main characteristic of this account is that you are required to withdraw a minimum amount each year. This minimum is determined as per government rules and calculated by your financial institution depending on the market value of your account at the market closing on December 31. The following table shows how minimum amounts are calculated each year:

Minimum withdrawal     
 Age