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Overview
To withdraw on margin, you must have margin available to borrow against. You can think of it as similar to a line of credit that's secured by your investments. This feature allows you to access cash without selling your investments and triggering capital gains or losses.
Why use margin for withdrawals?
- Quick access to cash: Get cash without selling your investments, which helps you avoid potential capital gains taxes.
- Cost-effective alternative to loans: Margin interest rates are typically lower than those of personal loans or lines of credit.
Before you withdraw on margin
- Margin interest: You'll be charged interest on the borrowed funds.
- Margin calls: If the value of your collateral drops, you may be issued a margin call. You may be required to deposit more cash or securities to maintain your margin loan and avoid forced liquidation of your securities.
- Risk: You're borrowing against your investments which is the same type of leverage that could magnify your losses if the price of your investment falls. You'll still have to repay what you withdrew on margin and lose part of your initial investment.
- Tax implications: Margin interest is only tax-deductible if the margin cash is used to produce income. This is usually the case when you use margin to buy securities within your margin account. If you withdraw cash for another purpose, like paying a bill, the related margin interest may not be tax-deductible. Learn more about interest deductibility from the Canada Revenue Agency.
Note: Some transfers on margin will prompt a two-factor authentication step where we’ll ask you to verify your identity. This step helps protect clients from bad actors and cybercriminals. Learn why two-factor authentication is important.
How to withdraw on margin
You can withdraw funds up to your available limit. You can withdraw the funds to an external bank account or another Wealthsimple account.
Note: You'll see the amount available to withdraw on the screen. Enter an amount to withdraw here. This is your total available margin minus any pending transactions like unsettled deposits or buy/sell orders.
Follow these steps to withdraw on margin:
- Sign in to the Wealthsimple app on your mobile device
- Tap your Non-registered margin account
- Tap Move money
- Select the destination account
- Enter an amount to withdraw
- Tap Next
- Review the amount of cash you're withdrawing (Cash used) and any funds you're borrowing (Margin used)
- Tap Submit
- Log in to your Wealthsimple account
- Select your Non-registered margin account
- Select Move money
- Select the destination account
- Enter an amount to withdraw
- Select Next
- Review the amount of cash you're withdrawing (Cash used) and any funds you're borrowing (Margin used)
- Select Submit
Frequently asked questions
Why am I being asked to verify my identity?
To help keep your account secure, we may ask you to verify your identity if needed when you take certain sensitive actions in your account. If this happens, we'll instruct you to enter a 6-digit secure code that you receive by email or phone number.
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