What Are a Brokerage Account and a CMA
To start investing in stocks, you need a "brokerage account," not a bank passbook. But what is that CMA sitting next to it? Let's sort out the account types and the deposit (available cash) first.
Brokerage Account — the Vessel That Holds Stocks
A brokerage account (custody account) is an account you open at a securities firm to buy and sell financial products such as stocks, ETFs, and bonds.
If a bank deposit passbook is a place to "store money," a brokerage account is a place to "buy assets with money and store those assets." The cash sitting in the account before you buy stocks is called the "deposit (available cash)."
In other words, understand the deposit as standby funds waiting to trade, not yet converted into stocks.
Deposit and T+2 Settlement
For Korean stocks, money and shares don't change hands the same day you trade; settlement is completed 2 business days after the trade, including the trade date. This is called "T+2 settlement."
So even if you sell a stock, you can withdraw the proceeds only two days later (D+2). For example, if you sell on Monday, you can withdraw on Wednesday; if you sell on Friday, you skip the weekend and can withdraw the following Tuesday.
The reason the deposit screen separately shows "D+1 deposit" and "D+2 withdrawable amount" is also because of this settlement structure.
Domestic stocks settle on T+2 (2 business days including the trade date). Discussion of shortening to T+1 is ongoing. (Source: Financial Services Commission, "T+2 settlement system"; KB deposit guide)
CMA — an Account That Earns Interest Even for a One-Day Deposit
A CMA (cash management account) is a securities firm's demand-deposit account. When you deposit money, the securities firm invests it in short-term financial products, and it earns interest daily, even for just a one-day deposit.
Unlike bank deposits, which usually pay interest on a monthly or quarterly basis, it's convenient for parking money that is resting for a moment, so it's often used like a "parking account."
CMAs also come in types: RP type (repurchase-agreement bonds), issued-note type (a securities firm's own notes), and merchant-bank type, and the return structure and safeguards differ by type.
A CMA is a securities firm's demand-deposit account that earns interest daily. (Source: Namuwiki "CMA," Toss Bank CMA guide)
Don't Misunderstand Deposit Insurance
The most common misunderstanding is thinking "money in a brokerage account is all protected like at a bank." In reality, it differs by product.
Bank deposits and a securities firm's investor deposits (available cash) are protected by deposit insurance up to 50 million KRW on a principal-and-interest basis, but stocks themselves are investment assets whose prices fluctuate, so if they incur a loss they are not covered.
CMAs also require caution. RP-type and issued-note-type CMAs are not covered by deposit insurance, so if the securities firm fails, the principal can be at risk. Don't look only at the convenience; also check the risk by type.
RP-type and issued-note-type CMAs are not covered by deposit insurance. (Source: Namuwiki "CMA," Yuri Jigap "CMA guide by type")
Frequently Asked Questions
Q. Can I use a CMA together with a single brokerage account?
Depending on the securities firm, you may open a brokerage account and a CMA together, or link them so that leftover deposit is moved to a CMA to earn interest. However, the account structure and names differ by firm, so when opening one, be sure to check which type it is (RP type, issued-note type, etc.) and whether it is covered by deposit insurance.
Q. Is a CMA safer or riskier than a bank deposit?
It's hard to say uniformly. A CMA has the advantage of earning interest daily, but the RP type and issued-note type are not covered by deposit insurance. Under the principle that "a slightly higher return comes with correspondingly higher risk," it is best to weigh safety and interest and choose the type that suits you.
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