Am I missing something????
Currently Interactive Brokers are charging 4.21% interest on margin balances between AUD 100K and AUD 1m (under AUD 100K it is 4.71%).
RaboDirect at call high interest savings account is paying 5.46% interest for the first 4 months for new accounts.
So borrowing from IB and depositing in Rabo should give a 1.25% net benefit over the first 4 months on deposits over AUD 100K and 0.75 on deposits up to AUD 100. This is approx AUD 62.50 per month in interest for the first AUD 100K and approx AUD 100 in interest per AUD 100K for amounts above AUD 100K borrowed/deposited for the first 4 months at what seems little risk to me. (It obviously assumes that you have enough shares with IB to borrow that amount on margin).
Both rates are subject to changes in RBA rates, but since the deposit is at call, one should be able to pay back the margin loan in at most a couple of days (as you would need to transmit though an intermediate bank) if rates go against you. However, it is more likely that the net difference would remain the same if RBA rates change.
Am I missing something? I can't see tax being an issue as the margin loan is borrowed for investment purposes, so you effectively are only taxed on the profit made.