52 Ways of Making Money in Stock Market - Part 28/52 - Earn Interest in Trust Account

Earn Interest in Trust Account. 

Do you know that your money in your  your trading account can earn you interest? They called it Trust Account.

The interest rate that you earn is actually quite high, higher than most Bank Savings Account and Current Account. Slightly lower than FD. Therefore, better than put in most of your Bank current or savings account.

Don’t always take out your sales proceed, leave it there.

Once your cheque is in the trust account, most brokers will let you earn interest immediate and no need to wait till your cheque cleared.

Especially during long public holiday, you may put in a cheque at the end of the working day and start earning interest for the next few public holidays plus weekend. Because the money has not debited from your bank current account, you also continue to earn interest from your current account, so you are actually earning interest from two accounts.

Put in the trust account if:
If you plan to buy shares soon.

You plan to use it in less than a month, so, unable to place in FD.

You are not sure when you need the money. In trust account you can withdraw anytime without penalty. But in FD premature withdrawal will be hit by penalty (interest forfeited)

Withdraw from Trust account if:

You are not using the money for more than a month, so better place in FD.

RISKS, LIMITATIONS OR DIFFICULTIES:

Don’t put in Trust account if you may need it anytime and quite urgent. This is because brokers are closed on weekend (no cheque or ATM for trust account) and most broker need 24 hours to process.

The interest rate is lower than FD, so in longer period better put in FD.

OPINION:

Check your savings and current account interest rate, superb low. Please check with your remisier or dealer on the interest rate for trust account.

Plan your fund so that you benefited from the interest in Trust Account.

Although some brokers need 24 hours to process, they may process speedily for you if for urgent case and can also credit straight to your bank account (without issuing you cheque). Do check with your remisier or dealer.

But please be reminded that brokers are closed on weekend (no cheque or ATM for trust account) and most broker need 24 hours to process, therefore you can’t use it for emergency purposes.

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