Account Types Available through DisnatClassic & DisnatDirect

We offer a wide variety of account types for individuals and legal entities. The chart below provides a convenient summary of these. Please see the descriptions below for details. For downloadable applications and other forms, visit the following links for DisnatClassic and DisnatDirect.

	DisnatClassic	DisnatDirect
Regular Accounts:
Cash
Margin
Margin-Option
Short-Selling
Registered Accounts:
RRSP
LIRA
RIF
LIF
RESP
QGSP (replaces the QSSP)

Cash Account

A cash account is the simplest way to start investing. You can trade stocks, mutual funds as well as all fixed income securities. However, each trade must be settled (paid for) by the settlement date, and some transactions require immediate payment.

Settlement dates by security:

Margin Account

Margin accounts allow for increased flexibility when investing. They provide the investor with buying power to purchase shares without necessarily having all of the funds available at the start.

This "buying power", or loan value technically, is based on the value and quality of the investments in the account. The amount is calculated from the market value of the securities either already in the account or to be acquired. Thus, the loan value can fluctuate depending on the type of security as well as the market value of the security.

To learn more about using margin, please see the Disnat University tutorial on the subject.

Also see:

• List of margin and short loan values.
• Interest rates for DisnatClassic and DisnatDirect.
• The Margin Account Agreement for terms and conditions associated with margin accounts.

Margin-Options Account

This account allows you to perform all types of option strategies, such as:

• Buying call and put options
• Selling covered call options
• Selling uncovered calls and puts
• Long or short straddles (covered or uncovered)
• Covered and uncovered spreads
  

This account also allows you to perform any of the transactions possible in a conventional margin account.

To learn more about options, please see the Disnat University tutorial on the subject.

Short Selling Account

This type of account allows you to perform short-sells.

The premise behind this strategy is that you are anticipating a decrease in the price of the stock and want to profit from this by selling the stock short and then buying it back at a lower price. This type of account is not intended for novice investors.

This is a very speculative type account, which usually requires having 150% of the market value of the stock sold short in the account as margin. Also there is no interest paid on the credit balances in the account. If dividends are declared on the stock while it is sold short in the account, you are responsible for paying the dividend. There can be supplemental guarantees required before obtaining such an account.

To learn more about short selling, please see the Disnat University tutorial on the subject.

Also see:

• List of margin and short loan values.
• Interest rates for DisnatClassic and DisnatDirect.
• The Margin Account Agreement for terms and conditions associated with margin accounts.

Registered Accounts

If you wish to plan for a comfortable retirement or ensure post-secondary studies for your loved ones, while diversifying your investments in tax sheltered acounts, our registered savings plans are the solution.

You can invest in Treasury bills, fixed income instruments, mutual funds as well as Canadian and American equities and options.

RRSP (Registered Retirement Savings Plan) Account

This account allows you to invest in Canadian and international securities tax free until withdrawal or age 71. This permits you to make various investments in the market in order to build up enough capital for your retirement years.

Main characteristics:

• Tax deductible contributions
• Revenue generated is sheltered from taxes until it is withdrawn
• Annual administration fees may apply. For details, please see the fees and commissions schedules for DisnatClassic and DisnatDirect.
• Competitive monthly interest rate paid on the outstanding cash balance.
• Contributions can be made in cash or physical securities.
• Denominated in Canadian Dollars only. Foreign exchange rates will apply for US Dollar trades.
• Possibility for the spouse to make contributions (with a spousal RRSP)
• Eligible for the automatic monthly contribution program (minimum monthly contribution of $200)
• Option of convertying your account into a RIF or LIF

Canada Revenue Agency determines the list of eligible investments for these type of accounts.

Possible Variations

Secured RRSP: By designating a beneficiary, you can protect the contents of your RRSP from being seized. This is especially convenient for self-employed workers and business owners.

Option Trading: This type of RRSP account is required if you would like to trade options.

LIRA (Locked-In Retirement Account)

LIRA accounts give people who change employers throughout their career the possibility of transferring their pension funds or funds from a retirement plan with their former employer to this account. However, no additional contributions can be made to the account and the funds cannot be withdrawn until retirement.

RIF (Retirement Income Fund) Account

In accordance with the current tax law, you must convert your RRSP into a RIF by December 31 of the civil year you become 71 years old, at the latest.

Disnat calculates the amount of your minimal withdrawal according to the fiscal policies in effect.

Main characteristics:

• Ability to transfer form your existing RRSP account (shares, mutual funds, fixed income securities)
• Gains and revenues generated are sheltered from taxes
• Competitive interest paid on the outstanding cash balance
• Automatic periodic instalments can be paid to the financial institution of your choice, according to your needs
• Possibility of bequeathing the balance of your RIF to your heirs as part of their inheritance

LIF (Life Income Fund) Account

When you retire, you can convert your LIRA or your pension fund into a LIF account, according to the policies established by law. A LIF allows you to receive different installment amounts.

The principal characteristics of a LIF are identical to those of a RIF with the following exceptions:

• There is a limit on the amount withdrawn per year (as prescribed by law)
• A LIRA or pension fund must be converted into a LIF before the year you turn 80 (except in Québec). Other conditions apply.

RESP (Registered Education Savings Plan) Account

This account allows you to set aside funds for your children's education. Gains and revenues generated by the account grow tax free. Furthermore, the government subsides 20% of the amount you contribute, up to a maximum of $500 per year.

Main characteristics:

• The growth of this plan is accelerated by the Canadian education fund subsidy and tax exemption on investment gains and revenues
• It is not necessary to be related to the beneficiary
• The account must be opened before the 16th birthday of the beneficiary in order for a subsidy to be granted
• Contributions are not tax deductible
• The beneficiary can withdraw both the investment revenues and the subsidy starting the first year of post-secondary studies in an authorized educational establishment
• These sums will be added to the beneficiary's taxable income (the beneficiary's tax rate will likely be less than the subscriber's) when they are transferred to him/her in the form of educational assistance payments.

Click here for more information on RESPs from the Canada Revenue Agency website

QGSP (Quebec SME Growth Stock Plan)

The Quebec SME Growth Stock Plan replaces the Quebec Stock Savings Plan. Individuals residing in the province of Quebec can use this type of account to obtain a provincial income tax deduction if they acquire shares of certain companies issued in the course of a public offering.

Click here for more information on QGSPs .