Brokerage investment savings accounts | Page 38 | General comparisons | Discussion forum

I surmise that all? (most?) of the discount brokerages waive commissions for the buy/sell of money market mutual funds but each should confirm that before buying. Those few that would charge commissions would certainly be non-competitive with those that do not.

Also unlike ISAs in which discount brokerages could limit one to purchasing ISAs to A class with a trailer fee of circa 0.25% (because they are not mutual funds), discount brokerages cannot sell true money market mutual funds (MMFs) with a trailer fee per regulatory rules.

This often (or sometimes) makes a MMF yield higher than that of a Class A ISA (with trailer fee). Further, an ISA yield is rather opaque in that it is a deposit account with an interest rate set by the bank just like a savings account. You can be assured the banks are pocketing some spread in that area of business.

A MMF is transparent in that it must flow through all income net of expenses such as MER each month.

As a for example for myself: In my Scotia iTrade account, I buy the DYN6004 (Class F) ISA with a current rate of 4.25% rather than DYN6000 (Class A) version at 4%. On the other hand, over at BMO Investorline, they won't let me buy their Class F version of their ISA so I would have to buy their Class A BMT104 at 4% that has an implied trailer fee of 0.25%. So I say, nuts to that and I buy their BMO95142 Class F MMF with an MER of 0.13% and current yield of 4.5%..... but floating downward as holdings mature and new ones are bought at lower yield.

All of this is pretty much 'playing at the margin' though and there is minimal benefit of chasing rabbits for 25bp here or there.