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Methods to Deposit Funds into a Brokerage account

Listed below are 3 options in which you can deposit funds into a brokerage account. 

  1. Wire transfers- Funds are moved from one bank to another within one business day and the funds can even be available for use on the same day received.   Fees are paid to the bank to process the transfer, international transfers can cost more than a transfer within the US and can take extra day or two to be received.  

 

  1. ACH Transactions- Banks and clearing houses process transactions in batches and typically take two to three business days to be completed.  ACH transactions  may incur a small fee to complete the transaction.

 

  1. Money Transfer Services-  Money Transfer Services are not wire transfers, but do provide you with an electronic way to send funds.  Money Transfer Services transfers funds to an associated bank which in return transfers the funds to the beneficiary.  It can take anywhere from two to seven days to completed the transaction.  Some common money transfer services are:  TransferWise.com, CurrencyCloud.com and Revolut.com.

 

 Here’s how the three options stack up:

  Wire Transfers ACH Transfers Money Transfer Services
    
 Speed Same day 1-2 business days 2-7 business days
    
 Availability

Most banks and credit unions,

but sometimes only for business accounts

 Most banks and credit unions Over 1,400 banks and credit unions
 International TransfersYes Yes Yes

 

 

Marcy B.

SMA (Special Memorandum Account)

An easy way to think about SMA is, it represents a line of credit. It's an investment account where excess margin that's generated from a client's margin account is deposited; this has the effect of increasing the Buying Power for a client. Let's say that a stock in a client's margin account appreciates in value and creates excess margin. If the excess is held in the account and that position creates a capital loss later on, the client could lose their gain entirely. The SMA balance will increase with cash deposits, hold interest and dividend payments from long positions and the proceeds from closing out securities positions. You can also use funds in your SMA to purchase more securities.

Bill W.

What is a Range Order?

A "Range Order" lets the trader enter two orders at once. If long a stock, the range order would entail a Sell Stop order below the market (end the pain) and a Sell order (enjoy the gain) above the market. If short a stock, the range order would entail a Buy Stop order above the market (end the pain) and a Buy order (enjoy the gain) below the market.

Moe S.

What is Reg - T?

In a nutshell, the Federal Reserve Board created this rule to protect investors against amplified loss. Its goal was to regulate Cash accounts and the amount of credit brokerages can lend to investors for the purchase of securities. Currently, investors may borrow up to 50% of the purchase price of securities held overnight while the remainder must be paid for with cash.

Bill W.