Many Etrade users are confused: Why do they have a negative cash balance if they’ve deposited money? What does it signify? Does it mean my account has blown off? Or something else.
Negative cash balance on margin account and Sweep Deposit Account means different. Let’s see the detail of Etrade Negative Cash Balance in this post
On Etrade, in a margin account, a negative cash balance signifies you are now transferred to borrowed money for your trading as your deposit has ended. For Sweep Account Deposit, negative value signifies unsettled debt that is not yet covered by the available balance of the Sweep account.
In writing this article, we have to struggle a lot as there was no official information on the Etrade website about the negative cash balance issue. We picked all this Infos from different discussion forums. However, we still need official reasons from Etrade FAQs on this issue. Hope in the future they post some detailed queries regarding this trouble to platform users.
Why Do I Have Negative Cash Balance On Etrade: 4 Reasons
There are several reasons for having a negative cash balance on Etrade. The most common reason is that your transaction history is different from pre-existing transactions, you need to fix it. Another reason is that your account is on margin and it requires either a deposit or borrowing money.
Let’s discuss how to fix the negative cash balance issue on Etrade.
If Debit Card Transactions are Pending
Most of the time the cash balance history shows a negative balance. One reason for this issue can be the deposit of money through a Debit card. This type of deposit goes in pending transactions and takes 1 to 2 weeks to upgrade.
Though this situation is rare it can happen if you are depositing cash in an Etrade account through Debit cards. To fix this issue you need to deposit money through e transfer facilities of banks.
If Transaction History Does Not Match
In Quicken Etrade the issue of Negative cash balance is very common. The reason for this is the difference between downloaded transaction history and pre-existing transactions. If you are downloading 100 days transactions and your existing transactions are still pending, it will show you a negative balance. You need to fix this issue.
How To Fix It
It is easy to fix this issue. Let’s readout 2 ways to fix this issue:
- Delete pre-existing manual transactions prior to 100 days
- For each security create a single balance entry
If Trade Debt Is Unsettled In Sweep Deposit Account
It happens most of the time with sweep deposit Accounts when Debit is unsettled and it is still uncovered by an available deposit in the Sweep account. This Sweep Account has a feature to take your cash and invest it in money on your behalf.
Sweep is an Automated function. It is because of this sweep automated features brokerage turns out to be profitable. They earn money through sweep accounts in the form of interest.
If you turn off sweep your access to Debit card and bank transfer will be denied. You need to have more balance in your sweep account as you would be unable to access your Debit cards.
If Margin Account Balance Is Nil & Need Debit Or Deposit
If you are owning a margin account for future trading, your balance may get negative. It signifies that your account has now blown up and you are now investing borrowed money.
Here you are likely to receive a cash call. It is up to either to deposit money in your account or borrow money from the same broker to trade in a margin account. Negative cash signifies your borrowed money after getting a cash call.
How Do I Have Negative Cash On Etrade
You can have Negative cash on Etrade if the balance in your margin trading account has been wiped off and you are now trading on borrowed money. You can also have a negative cash balance if your transaction history does not match your downloaded history. If your debits are unsettled in a Sweep Deposit Account, you are likely to face the issue of a negative cash balance.
I don’t know why Etrade FAQs on the website are silent about negative cash issues. But there are many unanswered queries in google and other discussion platforms where Etrade platform users are found confused. I hope in the future they will address this issue on the official level in the webpage.
Frequently Asked Questions
Why do I have a negative cash call Etrade?
Negative Cash Call is alert to notify the minimum limit of balance in the trading account. It is an alert for traders to either deposit money or borrows money. It is set by the brokerage to give timely news to traders that he or they will soon shift to borrowing money. This happens when the account is about to wipe off.
Why is my brokerage cash negative?
Brokerage negative cash signifies that the account is on borrowed money. Some brokers offer you an amount to borrow in case your deposit wipes off. This borrowed amount is then deducted from your profit per trade.
How long does it take for cash to settle Etrade?
In business days it may take 2 days. But in the case of holidays, it can take more days. The cash deposited from the debit card may take 1 week or 2 to settle Etrade. However, banking holidays are not included as official holidays.
Can a brokerage account go negative?
Yes, it can go negative, if it’s a margin account and shifted to borrowed money. It can also go negative in case of unsettled cash and transaction history issues. Moreover pending transactions can also turn brokerage accounts negative.
After reading this post you need not be scared of a negative cash balance in your Etrade. First, try to fix this issue if it’s from your side due to the wrong transaction history. If it’s not resolved, contact the customer’s service of Etrade, they will surely respond immediately.
In the case of a margin account, deposit some amount to turn the value positive.