Should you open a cash account? When it makes sense

The Margin Editorial Staff
Mon, 13 Apr 2026 12:52:03 +0000
Cash-account, Otc-trading, Non-registered-account, Capital-gains-tax, Capital-gains

A cash account is a non-registered account with no contribution limits, making it a useful option once you've filled up your registered accounts. Because it's non-registered, it doesn't offer tax benefits of accounts like a TFSA or RRSP, such as tax-free growth or tax deferral.

It also doesn't come with the same restrictions. Cash accounts can hold investments that are typically not eligible for registered accounts, including stocks and ETFs that trade over-the-counter (OTC).

​Tax implications of a cash account

Holding investments in a cash account comes with additional tax considerations to account for each year. The most common are taxes on income generated in the account (in the form of dividends or interest) and taxes on capital gains. For capital gains, only positions closed during the year need to be claimed on your tax return. This is typically why cash accounts are only opened once registered accounts' contribution room has been fully used.

Most brokers provide the necessary tax documents you'll need at year end, though these slips can sometimes be inaccurate for a variety of reasons. It's always a good idea to keep your own records of all transactions and to consult a tax specialist to make sure you're filing correctly.

​Summary

A cash account is worth considering for investors who have maxed out their registered accounts. It has no contribution limit, but any income and capital gains earned in the account are subject to tax each year.