Cash equivalent

[turar]

How is everyone holding their cash? I got into a problem last week of not having enough cash in my Interactive Brokers account. Transferring additional funds from my savings account took 4 business days, which were pretty volatile, and I had to mostly sit them out due to this purely logistical mistake.

 

The only reason I hold cash in a separate savings account is the measly interest rate I receive.

 

Now I'm trying to see if there's a better way to hold cash withing IB account and receive some interest on it. What would you recommend? An ETF like SHY? Anything else? I was even thinking of something like WMT, a pretty good valued stalwart which barely moves anywhere through thick and thin, and pays almost a 3% yield. But it's still equity though.

[JSArbitrage]

Is it really worth the risk climbing out on the limb for the extra yield?

 

My view is that cash is cash.  WMT isn't cash. BRK isn't cash. KO isn't cash.  Nor is commercial paper or money markets.  The financial crisis proved that only cash is cash.  Everything else tends to vaporize if everyone stampedes at once.

[Ravi]

Just a quick note: If you wire your money to IB it will only take one day. The cost is only $10 through my Credit Union

[scorpioncapital]

I wired funds to IB and it took exactly 2 hours to arrive at IB and that's from Canada to the US.

[given2invest]

Is it really worth the risk climbing out on the limb for the extra yield?

 

My view is that cash is cash.  WMT isn't cash. BRK isn't cash. KO isn't cash.  Nor is commercial paper or money markets.  The financial crisis proved that only cash is cash.  Everything else tends to vaporize if everyone stampedes at once.

 

I agree with this guy.  Don't try to squeeze an extra 50bp out of your cash.  Just let it be.

 

 

[sswan11]

That's the frustrating thing about holding cash at IB - no interest on cash balances.  The only exception I know of is to hold AUD$ or CAD$ funds for which IB will pay interest. 

[biaggio]

That's the frustrating thing about holding cash at IB - no interest on cash balances.  ... 

 

Is that not the case for most accounts-brokerage, checking , savings, or other?

[given2invest]

Yah, we at 0% fed funds.  There is no interest anywhere.  You could get 1% at ING direct but that's about it. 

[turar]

Thanks all, I'll try wiring next time. I was using EFT all this time -- this is from Canadian bank to IB Canada.

 

I was getting something like 0.6% on USD at my bank last time I checked, and about double that for CAD, but it could be lower now.