Minimum account balance and deposit at RBC Direct Investing
This article discusses what the minimum account balance (if required) and the minimum deposit (if required) at RBC Direct Investing stand for. Find out in which cases you must have a minimum balance at RBC Direct Investing.
Have you ever accidentally mixed up the minimum account balance with the minimum deposit? Rest assured, you’re not the only one. To prevent any confusion, we'll tell you what they are and how they differ from each other.
RBC Direct Investing offers margin and derivative trading: You can trade stocks/ETFs on margin, meaning you can borrow money from the broker to increase your trading position. The following derivative products are also accessible:
| RBC Direct Investing | Qtrade Direct Investing | Questrade | |
|---|---|---|---|
| Futures | No | No | No |
| Options | Yes | Yes | Yes |
| Forex | No | No | Yes |
| CFDs | No | No | Yes |
Note that most brokers offer several account types. If you open a cash account, you don't have to worry about margin requirements because you can only invest the funds that you deposited in the account. Some brokers don’t even require a minimum deposit for cash accounts. In turn, a margin account allows you to borrow money from your broker so you will have to comply with margin rules.
The minimum account balance is the amount that you're required to maintain on your account when you use leverage/margin in trading. Having this amount available is necessary to avoid negative consequences such as a margin call or the liquidation of your assets. If the amount of funds in your account falls below the minimum account balance requirement, you will have to deposit additional funds.
Bear in mind that it is your responsibility to ensure your account is properly funded. You should monitor your account at least on a daily basis to make sure you always meet your broker's margin requirements. It is not a good idea to wait until you get a margin call, because if you miss it, your broker may liquidate some of your assets and you could end up with considerable losses.
The minimum deposit is the minimum amount required for opening an online brokerage account. While some brokers do not require a minimum deposit, others do. The minimum deposit requirement means that you will need to transfer this amount to your brokerage account from your bank account in order to start trading. You can check the minimum deposit at RBC Direct Investing here.
The term margin is used widely in the financial world. Note that margin requirements for different asset classes, such as stocks and options, may be different.
There are general margin requirements for all stocks when you trade stocks/ETFs on margin at a US-regulated broker. On the other hand, if you trade derivative assets such as futures or options, the minimum account balance depends on the specific asset you trade as well as the broker's requirements. In both cases, you have to comply with margin requirements and maintain the minimum account balance at all times.
Minimum account balance at RBC Direct Investing
Minimum account balance for stock/ETF margin trading
When trading stocks and ETFs on margin, the broker itself determines the minimum account balance you must always maintain in your RBC Direct Investing margin account.
Minimum account balance at RBC Direct Investing
Minimum account balance for derivative products
RBC Direct Investing offers derivative products to its clients:
- Options
Options minimum account balance
RBC Direct Investing provides options on 2 exchanges.
Options trading strategies involve different degrees of risk and complexity. Some riskier trade types, like selling call options on stocks you don't own or writing an uncovered put option, can only be executed if you have a margin account. However, less risky strategies, such as buying a call option, are permitted with cash accounts, too.
Remember that when you trade options, the minimum size is 1 contract, which represents 100 shares of the underlying asset.
Minimum account balance at RBC Direct Investing
Minimum amount to open an account at RBC Direct Investing
Good news: the minimum deposit to open a RBC Direct Investing account is $0. There are brokers that require as much as a couple of thousand dollars. You can check in the table below what is the minimum deposit at the competitors of RBC Direct Investing.
| RBC Direct Investing | Qtrade Direct Investing | Questrade | |
|---|---|---|---|
| Minimum deposit | $0 | $0 | $1,000 |
No minimum deposit
Minimum account balance at RBC Direct Investing
Bottom line
Now you know what the minimum deposit and the minimum balance are at RBC Direct Investing and you understand the difference between the two. If you want to dig deeper, read our article on margin calls and short selling.
The minimum deposit is the minimum amount required to open a new online broker account.
In turn, the minimum account balance is the amount on your margin account or on your account for trading leveraged products that you're required to maintain to avoid fees.
Don't forget that your maintenance margin requirement may change constantly and it is your responsibility to keep an eye on it. You should place additional deposits or close some other positions on your account if it is getting too close to the maintenance margin level. You definitely want to avoid getting that dreaded margin call or wait until your broker liquidates some of your assets and positions.
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