I asked a very similar question in another thread but did not draw much attention. I hope you guys wouldn't mind if I ask it again here. After all it concerns how RBCDI treats cash alternatives.
I currently have a margin account with TD Waterhouse. As pointed out by iluvnascar on Feb 20, 2010 in viewtopic.php?f=35&t=111286
, deposits in money market fund equivalents such as Manulife Investment Savings Account (MIP510) or Renaissance High Interest Savings Account (ATL 5000) in a margin account are not "marginable" at TDW because they are priced at $1. If one has a typical margin account (not cash or registered accounts) with $50,000 in MIP510 and nothing else in the account, there is zero margin available and one would not be allowed to place any buy order online. The alternative would be to place the buy order through a live TDW Rep and hope that you would not be charged the full commission. Deposits in Dundee Investment Savings Account (DYN 500) priced at $10 are 95% marginable. If one has $50,000 in DYN500, there is $47,500 margin available and one can buy up to $47,500 worth of stocks (commission included) before redeeming whatever is needed one day before settlement in order not to pay any margin interest. At TDW, a person's buying power in a margin account is only the margin value of the holdings.
The word "margin", however, seems to be interpreted differently at RBCDI than at TDW. Recently I heard that at RBCDI, while MIP510 remains not marginable in a margin account, a person with $50,000 in MIP510 and nothing else is allowed to place buy orders online and buy up to $50,000 worth of stocks. On a fill, the person can redeem the required MIP510 one day before settlement. That means at RBCDI, a person's buying power is at least the actual "equity" value of the holdings in the margin account, $50,000 in this case. I would appreciate it very much if someone would kindly advise if my understanding of RBCDI's practice is correct.