Mozaic Finance glossary Non-registered accounts

Margin account: borrowing to invest, explained

A margin account lets you invest with borrowed money: it can amplify gains, but it amplifies losses too, and you pay interest on what you borrow.

A margin account is a type of non-registered brokerage account that lets you borrow against the value of your investments. It is the higher-risk counterpart to a cash account, and it is not a tax-advantaged, registered account.

How a margin account works

  • You can borrow from your broker against eligible securities to buy more than your own cash would allow. This is called leverage.
  • You pay interest on the borrowed amount for as long as the loan is outstanding.
  • If your holdings fall in value, the broker can issue a margin call, requiring you to add funds or sell.
  • It is a non-registered account, so gains, dividends, and interest are taxed the same way as any taxable account.
  • Leverage amplifies both gains and losses, which makes a margin account riskier than a cash account.

How Mozaic tracks your margin account

In Mozaic, MARGIN is a first-class account type. Connect it through SnapTrade or Plaid, or add it by hand, and its holdings and net balance roll into your net worth.

Mozaic shows the account's value and holdings. It does not manage your margin, monitor your loan, or warn about margin calls; those live with your broker.

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Frequently asked

In a cash account you invest only your own money. In a margin account you can borrow against your securities to invest more, paying interest on the loan. Margin adds leverage, which amplifies both gains and losses.
Yes. A margin account is a non-registered account, so capital gains, dividends, and interest are taxed the same way as in any taxable account. It has none of the tax shelter of a TFSA or RRSP.
Yes. MARGIN is a first-class account type in Mozaic: connect it or add it by hand, and its holdings and net balance roll into your net worth. Mozaic does not monitor your loan or margin calls, which stay with your broker.