Online Banks and the highest rates: HISA, TFSA, GIC? | General comparisons | Discussion forum

Thank you so much for the detailed responses, I appreciate it.

I will also lay out a detailed response. Sorry, if it is too long, but I like being thorough and detailed.

Regarding the $5000 CDN, I don't really need it, it is mostly savings (and it just sits there in my TD account).

I have some cash on me that I don't keep in the bank (and that is my spending money). I live at home, don't spend a lot and am extremely frugal and minimalist.

So I am open to HISA, TFSA, and GIC. With the GIC, I am interested in the index (or market-linked GIC) so I can have a more variable rate of return. I like how the principal is guaranteed, so no matter how badly the market does, I can at least get my initial investment back, and maybe an open-ended return.

SCU offers Index-linked GIC, I think.

I also like the idea of GIC's within TFSA, so the return isn't taxed.

But to start, perhaps I should just stick with the HISA???

Maybe I can put $1000 into a Index-linked GIC or TFSA Term Deposit with a rate of 2.8% or better for a period of 1 year.

The only reason I consider the TFSA is because I didn't want to pay taxes, but you are right, I don't pay taxes, since I have had zero income for quite a while now.

I thought the TFSA protects your investment profit from being taxed. Maybe TFSA is just for people who actually pay income taxes? That is not me, since I have been unemployed for over a year. Please clarify if I should get a TFSA or not?

And yes, I consider the TFSA for the rate as well (2nd reason), it is higher than HISA, except for the Motive Financial Savvy Savings @ 2.8%, that is one example of a non-promo HISA that matches many TFSA rates. So maybe forget TFSA's and just stick with Motive's Savvy Savings? What do you think?
https://www.motivefinancial.com/Accounts/SavvySavingsAccount/

There is a chance I may start working again soon, but it is not for sure.

Regarding TD, I don't want to close everything down, although it is tempting, but if I switch to an online bank that has ATM/debit cards, can't I just dump TD altogether?

And I may switch online banks over and over again to take advantage of the bonus rates/offers that change from time to time. Perhaps I should keep TD for this reason alone, but I don't want to pay their minimum balance fees. TD fees are one reason I want to do away with them once for all. I have been with TD since the early 90's (when I was a kid) and I mostly remember them for fees.

And I should also make it clear I don't really use banking for daily use. I have petty cash for that (and the credit card) which isn't directly paid by me.

Since I spend so little on a daily basis, my bank accounts are pretty much not used. This is why I want to do HISA, so I can continue not doing much with the money but at the highest rate.

Then later, I will earn more about stocks, EFT's, robo, etc..) and begin investing.

I suppose the HISA is the first step, and then move onto investing later, etc..

I never invested before, although I do have some mutual funds with TD.

I bought 3 $100 funds, and now altogether they are worth $455 (after 3-4 years).

I don't know how much TD will ding me if I choose to liquidate them.

But in the future, I am interested in investing with the least amount of dings when It's time to liquidate. I don't mind high risk, aggressive growth, etc.. in fact I seek that, but when it is time to cash in, I'd like to avoid/reduce the fees, etc..

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As for the $18,000 USD, I don't really have any connection with the US, and never go there, and buy online in CDN$, so I am thinking to just convert most of it to CDN$ although the rate isn't the best now, it was better several months ago (and I missed out). I will lose about $300 if I convert all the money to CDN, and this is at the Chinese currency places in Vancouver.

The other option is to switch over to a Tangerine US account, because of their 6 month promo rate @ 2.75% and then down to 0.45% afterwards.

This seems smarter than converting it because instead of losing $300 in currency fees, I can instead make about the same in high interest.

And those interest earnings will not be taxed, right? Since I am not making an income, is that right? Just so I understand how taxes work in HISA's???

I am not sure what Hubert offers that is better than Tangerine for a USD HISA?

I checked Hubert's page, it looks good, but they don't post their USD HISA rate?

And what I want to ultimately do with this money is nothing to start, so I can see the HISA taking effect, and then depending on the growth I see, I will then be inspired to take more chances and get into stocks, EFT's, since that may be the only real way to beat inflation.

I want to really stay ahead of inflation. That is the whole point here.

I will only spend time in Vancouver, Canada. My traveling days are over.

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Regarding the Credit Card: I have the TD Visa (that says Rewards on it), and I think I will just leave it there, since my plate is getting full with so many financial options & jargon. I don't want to overwhelm myself, since I am a novice. I expect to really get into it, but step by step. And take it slow.

And the credit card is in my name, but I don't pay for it, it is more like a family emergency credit card for everyone in the family, and I have been using it for online shopping, with promo codes, etc.. I never use the card in a store, etc..

I am not a student, more like early retirement/unemployed by choice.

Although I am open to working part-time in the near future.

I mostly spend my time exercising, and research/studying.

I only have a laptop (no smartphone).

If I do one day switch credit cards, how is the Tangerine CC? I would probably like to not pay an annual fee, and maybe get back some rewards, preferably cash back, rather than air miles, store credit, etc..

I will remove Ducca and Outlook Financial from the list.

Oaken, Hubert and People Trust are on my mind.

Although I do live near Vancouver (I never really go to downtown).

Motive's Savvy Savings is the best HISA according to Reg Flag Deals.

Would you agree this by far the best choice for HISA?

Regarding TFSA, I only considered TFSA because I thought the gov't would tax my potential future investment revenue? It is true I have no taxable income (and no income, period). So maybe I jumped the gun with the TFSA.

LOONIE

Losing a lot of money converting USD to CDN simply means the bad exchange rate offered at currency exchange places, so if i want to convert 18K USD to CDN, I will lose a few hundred dollars since the market rate is always a litter better than the rate offered at exchange places. Even the best little place in Vancouver that I know that changes money still isn't a great rate, it is just as great as it is gets in Vancouver, so that is what I meant. Sorry, but I thought that was clear.

It is the conversion fee that I was trying to avoid, but you are right I may just take the hit and convert all the USD and be done with it.

So today it is 1USD = 1.32915 CAD

And at my favourite exchange place, unless you know of a better spot, it is:

1 USD = 1.32 CAD - https://happycurrency.com/rates

So for the amount I have: 18,000USD = 23,925.92 CAD

But at the exchange place I know, it would be 18,000 USD x 1.32 = 23, 760 CAD

So I would lose $165 in conversion fees, which was the original concern.

But you are right, if I will make this back, I suppose it is worth the initial loss.

The only reason I didn't convert ALL the USD right away, is because I thought I could benefit somehow with a USD Savings Account, but perhaps not.

I will convert it ASAP. And close down my USD accounts.

And thanks for clarifying about TFSA's as well, it is apparent they do not apply to me. I was merely concerned about paying taxes on my earned interest and future investments (in general).

And the stock market is a bit more advanced, so I will leave it for now.

And thanks for clarifying that WealthSimple, Couch Potato is related to the stock market. Does that go for EFT's as well? Index funds? VRGO/XRGO? Vanguard? Blackrock? Are these all related to the Stock Market?

So I will convert ALL the USD to CAD ASAP, and find the HIGHEST HISA Rate out there, which is Motive HISA @ 2.8% (application is processing). Or there is B2B Bank at 3.30% and I think Meridian Good to Go savings account which is 3.3% as well, but it that offer is expiring soon, If I'm not mistaken.

I will close the TFSA accounts I opened, including Motus, with the $100, and I also have another Tangerine TFSA, with $100, I will close that as well. And I have a Tangerine US account, with nothing in it. I will close that as well.

About GIC, I suppose they are for people who want to wait a longer time to see a return on their investment, and the rates for GIC don't seem to exceed 3% anyways? So I don't see the benefit of putting the money in a GIC at 2-3% with 1-5 year terms vs. HISA accounts at 2-3%.

Eventually I'd like to get into rate of returns of 6%, but like you said, later.

What is the difference stock market vs estock market?

And to answer your question, I am NOT the primary account holder of my TD Visa, my mother is, she has two cards, one for herself, and one for me, both payments go to her, although the card I use has my name on it, I don't get the bill, and it is also not on my account page on TD. She has to login to her account page to see the transactions. It is a family card, so anyone in the family can use it, and the bill goes to her. That way she can see all the transactions. Sometimes, I give her cash to pay her back, but she usually doesn't ask for that.

And I am not opposed to working/paying taxes, it is just that my personality doesn't really match the mainstream/corporate culture.

I don't fit in. And I have always been the black sheep (and quite happily too).

TO JON:

I am interested in capturing the maximum amount by opening these many accounts, you are right. I will close down TFSA accounts, USD accounts, and HISA accounts with a low interest rate (like EQ) and focus on HISA's only from now on. For example, Motive, B2B, Meridian, etc..

I never convert or change money at a bank, I usually go to the Chinese currency places, so I am thinking to take 18,000K and just converting all of it.

One question I have is do I have to do this physically by withdrawing all the physical cash from TD, and then driving down to the exchange place, converting it, and take the CDN cash back to TD and deposit it. Is that what you recommend?

TD does offer me the option to electronically exchange my USD to CDN (between my TD accounts) but of course, at a much worse rate than 1USD = 1.32CAD, which seems like the best I'm going to get right now.

And yes I am thinking about getting rid of TD altogether, and go for one of these
free/ pay per use chequeing account at a local CU, for example listed here:

https://www.highinterestsavings.ca/free-canadian-chequing-accounts/

Eventually I will have close to 30,000CDN to place in a HISA, and then after that try my hand at a bit of investing.

How small is the small capital gain tax?

And the mutual funds are in a TFSA, why do I have to file tax for 2019? I don't have a problem doing so, just wondering what it is called tax-free if I have to file taxes?

And back filing all my tax means for all the previous years I didn't file? It has been a really long time since I paid income tax, a really long time. So are you saying if I file for taxes this year, I am eligible for all those GST/HST returns? When I was much younger, I remember receiving $70/year after filing taxes.

Back then, I paid income taxes.

Is there any other tax credit I am eligible for in my situation other than the GST/HST?

And you are right, I am willing to take a higher risk tolerance if the return is higher, it is just that I don't want to wait 5-10 years to see the return. I'd like it to pay off much sooner than that.

I like the idea of the 3 month GIC, but the rate is similar to many HISA's, so why bother with the GIC at all, it is not like the GIC outperforms the HISA???

So having said that, what investment types are suitable to me?

I don't have any experience in the stock market, but I do learn very quickly.

I am not disabled, and receive no assistance from the government.

Even though I don't work, I am still very industrious. I have a background in Research, and can really dig deep into a topic, and learn all there is about it in a short period of time.

I'm very organized, meticulous, and work best on my own.

I like studying. I'm very detailed, diligent and alert. Discerning, resourceful, conscientious. Perceptive, direct and adaptive. Quick, thorough and investigative.

I'm also very well traveled and speak multiple different languages.

I also agree tax is necessary but I find it is not really democratic how it is collected and spent. Rather bureaucratic and oligarchical, and not transparent.

I don't appreciate or support the government behaving like a massive corporation that makes decisions on our behalf. I prefer more of a direct democracy with numerous referendums rather than the British inspired representational system we have today. I also don't agree with the US system.

This way of thinking is one of the reasons why I don't fit in.

And I stand by my principals and beliefs.

I hope you guys still want to help me 🙂 I appreciate all that you have said.

Hi Loonie,

I will convert the USD to CDN ASAP.

I already applied to Meridian, I just need to go to the post office to confirm my identity, and I am doing that on Sunday afternoon. I hope I can still get the promo rate, let's see.

Motive is taking its sweet time to approve me.

B2B didn't allow me to complete the application because of Equifax not recognizing me, etc...They asked me questions like what is your middle name, and gave me a lot of strange multiple choice options, and I clicked none of the above, and the same (none of the above) for their other questions, and then it rejected me, and said to contact Equifax. I couldn't find an email for Equifax, so I just emailed B2B.

What is the difference stock market vs bond market?

And what are equities?

I like the idea of investing when the principal is guaranteed and the investment income comes from the earned interest, for example it could be a high interest rate, or not so high, and that is the investment (in a nutshell).

I am looking for investments that are even shorter than 1 year.

Not because I am impatient, rather just so I can see how investments work (from start to finish).

A 3 month investment would be ideal.

And a 20-50% loss of the principal is NOT OK.

I am not really eager to get into stocks, I just used that word
"stocks" because I didn't know what other names these investments I'm attracted to are called???

My intention is to research investment types, pros vs cons, etc..

To be honest with you, I am not really a fan of gambling.

If one day a 3 month GIC promo comes up that is higher than 3%, I will of course take it. Other than that, I don't really know what kind of investments to make.

So for now, I will just focus on HISA.

Regarding not filing a tax return, will it make them angry that I didn't file the previous years? I mean don't they already know I haven't filed it? If they needed me to file, wouldn't they contacted me by now?

Will I get back all the tax credits from the previous years? That could add up to thousands of dollars. Will they pay out?

How many years of not filing is considered too many?

Regarding the Credit card, I don't really use it on a regular basis. It is just for the occasional online shopping so I can avoid retail stores. And if necessary, in the future, I can get a credit card that doesn't have an income requirement. I think there are a few like that. Will that solve it? I can then pay off the credit card bill with my life savings. Also, I will have lots of money coming in from inheritance by then (and I mean lots). It is then, when I will do the real investing, I hope.

Don't forget I have paid into taxes before, it is not like I have never paid. I am not paying now. And I may pay again in the future. I am not against paying. It is the nature of the system to be non-democratic, that is what I don't like. Pretending to be a democracy (when clearly not).

So I consider myself a person who has also paid for those roads to be built. And not only don't I think it is a perfect system, I also don't think it is a good system. And in many ways, it is a downright despicable system. And I will adjust my personality to expose our system rather than become just another patron of it. I am not interested in conformity, especially when I disagree with the very nature of the system. And see it as problem, rather than a solution. Also, what you say sounds a bit proud to me. As if we are all here to play to the same tune. And I am not interested in the propaganda of the masses regarding earning money/contributing to the society. That is the same bull they teach in universities to get the corporate slaves ready for another injection into the workforce. No thanks!

And I have already tried the living the forest in the cabin by myself which again sounds like just another unhelpful remark. And it is not a solution because as I said I prefer to expose our system rather than run away from it.

And I am not depending on my fellow citizens. That is an imposing political opinion that I don't appreciate or agree with. This is why I don't fit in with this society because of remarks like that. And I also why I avoid working with people who talk like that to me (in the workplace).

And you are right, your advice is not solicited (regarding the political issues) however you are free to express them (as I did). I have had this conversation before and it always goes the same way as it is based on pride.

And here is some more advice. Life is not about working. That is a deception sold to you since childhood by the state so you can serve the state for the rest of your life. And the majority of "citizens" do just that. What they are told and expected to do. The true definition of an economic servant.

But in general thank you for the previous advice you gave on the financial matters. The political stuff wasn't helpful. I hope others will answer the questions I asked you (since you claim not to be helping me anymore).

Thank you Norman, I hadn't realized that 🙂