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Email this8:59 pm
March 27, 2022
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Hi there,
First time posting, although I've been to the site off and on for many years.
I have over 1 million that I will use to buy a townhouse ultimately so I am looking for a place to park that money short term where it will make some income, and be safe. Suggestions would be appreciated.
Do these credit unions that have unlimited deposit insurance, also allow large deposits of that kind?
Thanks in advance!
5:23 am
March 30, 2017
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Newbie said
Hi there,First time posting, although I've been to the site off and on for many years.
I have over 1 million that I will use to buy a townhouse ultimately so I am looking for a place to park that money short term where it will make some income, and be safe. Suggestions would be appreciated.
Do these credit unions that have unlimited deposit insurance, also allow large deposits of that kind?
Thanks in advance!
For $1mm, if its me, I wont put it all into 1 CU, regardless of the said unlimited deposit insurance. Even if it is "indeed" full insured, the hassle and timing of getting it back if the unforeseen happens will be stressful and not worth the whatever extras you will earn over say a Big5. I will prob divide it up into 4 tranches, with a mix of big 5 (including Tang and Simplii if u can get the new acct promos) and CUs.
Some FIs have deposit limits when it comes to HISA, you have to do your own homework.
6:53 am
September 30, 2017
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1m cash in pocket for realty 
... only in my dreams ... now I connect why people asking about the deposit limit imposed by a FI
Just wondering what are your options at hand, if nothing else comes up here ?
8:24 am
January 13, 2022
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I have been in the same position. My first advice...that townhome you're considering? Forget about it. For at least one year. Two might be better. Real estate has to unwind from dizzying heights as a result of the imperative to raise interest rates/cool inflation. You're in a great cash position with little to no need to finance; don't be too hasty. I don't have a crystal ball, but when so many astute people (RBC's recent housing report, for example) are saying the same thing, I listen. Second, I think it might be good to diversify into as many as five chunks at different institutions. I know that leaves you over the CDIC limit for federal institutions, but really...if your money disappears there, I doubt the CDIC would even be solvent. I like and have used Tangerine (BNS), Laurentian Digital, EQ and even Oaken. I also have no fears of major credit unions like Meridian and Steinbach in Manitoba, although their rates aren't as good as they once were. I am currently in a multitude of short term positions, GIC or otherwise, at Tangerine, EQ, etc., as I wait for higher rates to lock in for longer durations. Best I can offer.
8:26 am
October 21, 2013
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Which province do you live in?
9:04 am
December 20, 2019
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Newbie said
Hi there,First time posting, although I've been to the site off and on for many years.
I have over 1 million that I will use to buy a townhouse ultimately so I am looking for a place to park that money short term where it will make some income, and be safe. Suggestions would be appreciated.
Do these credit unions that have unlimited deposit insurance, also allow large deposits of that kind?
Thanks in advance!
I have moved funds to Hubert because the entire amount is insured and the customer service is pretty incredible.
I have funds sitting in many institutions but I like the security provided by Manitoba credit unions. A 100% deposit guarantee is pretty awesome.
10:53 am
March 27, 2022
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Loonie said
Which province do you live in?
Thanks for the quick comments everyone!
Loonie, I live in BC, in Vancouver particularly.
So the comments on the real estate market are particularly relevant here and are exactly why I'm not sure if I'll need to park money for 2 months or a year or even longer but I'd like to keep the flexibility to buy when I decide the time is right. I'm also not keen on buying in such an overheated market with the implications that carries. Will be doing some research ... I don't actually have the money quite yet.
11:00 am
March 27, 2022
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Also, I already have an account at Accelerate Financial and I hear it is merging again with Hubert, so hopefully that is a good sign KamWest. Still the idea of splitting it into a few institutions makes sense.
Since I won't be leaving the money in these institutions for too long, I'll be looking at both rate and ease of setup to pick others.
11:27 am
April 6, 2013
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It is a good idea to divide the money across multiple financial institutions.
Deposit insurance will ensure one will eventually receive one's deposits. But, it won't ensure one will receive the money when needed.
Should the deposit insurer find tampering with the failed financial institution's records, it may take a while for the insurer to determine what everyone's correct balances are before issuing the cheques.
11:50 am
January 12, 2019
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Norman1 said
It is a good idea to divide the money across multiple financial institutions.
Deposit insurance will ensure one will eventually receive one's deposits. But, it won't ensure one will receive the money when needed.
Should the deposit insurer find tampering with the failed financial institution's records, it may take a while for the insurer to determine what everyone's correct balances are before issuing the cheques.
- This ⬆
The money could be locked-up for a Year, or More ❗
'Never' put all your eggs in one basket.
Spread the risk.
- Dean
P.S.
This is the 'Worst' time to be a Buyer in the
BC real estate market, especially in the
BC Lower Mainland (Vancouver, etc.) ❗
" Live Long, Healthy ... And Prosper! "
12:12 pm
September 11, 2013
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I'd be very careful about any real estate prognostications you get from anyone, especially amateurs. And even the experts, i.e. show me where the expert consensus back in 2018 or so predicted accurately where prices would be today. (Of course it's hard to even find and get a property, even if you do want to pull the trigger, and that may or may not be the new normal going forward, no-one knows.)
12:54 pm
December 27, 2020
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I agree with Bill's comments. I know it is hard to believe that housing prices won't come down some. They probably will as interest rates are on the increase and folks simply can't afford the crazy prices we are seeing these days. That said, just look at the history of real estate. It just keeps going up and rarely goes down. It's a tough call but personally, I wouldn't wait too long before taking the plunge.
1:47 pm
March 27, 2022
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Bobbyjet11 said
I agree with Bill's comments. I know it is hard to believe that housing prices won't come down some. They probably will as interest rates are on the increase and folks simply can't afford the crazy prices we are seeing these days. That said, just look at the history of real estate. It just keeps going up and rarely goes down. It's a tough call but personally, I wouldn't wait too long before taking the plunge.
Yes I appreciate Bill's comments and yours. I have heard many times about an expected correction in the Vancouver markets that have never really come, or if they did, have been short lived. One thinks it can't continue forever, but it has up until now. At the end of the day, my timing may end up having more to do with when I find that place I really want.
1:48 pm
September 7, 2018
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Gut feeling might say that house prices are "too high" and bound to come down. In fact, there is such a shortage of inventory of houses for sale and apartments for rent in the major cities, (perhaps not Smiths Falls ON or Flin Flon Manitoba) I think the upward pressure will continue. A house is for the long term so even if one paid full market price today, in 10 or 15 years the market value will almost certainly be more than current value. Everyone needs a roof over their head, Canada has an increasing population and inflation will continue - I say buy a house as long as you are able to afford it taking into consideration mortgage monthly payments and other maintenance costs. For the vast majority, one's principal residence has likely been their best investment. I think both Vancouver and Toronto will continue to be pricy markets for both purchase and rental.
2:59 pm
October 21, 2013
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Given that you are in BC, your options are more limited.
If you have faith in CIBC, I would consider putting a good chunk of it in Simplii if you can get a promo savings rate as a new customer. Wait til May for that as the current one ends end of April. Perhaps Norman1 or someone can bring us up to speed on comparing credit rating of CIBC vs province of MB. I imagine they are pretty close.
You could keep the rest of it at Accelerate/Hubert if you have confidence in the Manitoba insurance system - not necessarily backed by govt. This could be a good time to buy the one-year Hubert GICs with quarterly cashability even though rate is not as good as earlier, because of the flexibility they give. Also, the rate might go up again. Quarterly cashability means you can cash out and reinvest if rate goes up enough. I did that a couple of times in the past. There is no guarantee that the merged version will offer this particular one year term, but the one you are already invested in will stand.
Other than that, it would be a collection of small banks such as Oaken, EQ, Motive, Peoples. Peoples has the advantage of being local to you, based in Vancouver but I think they are only online. You could put up to 100K in each (200K at Oaken and Peoples Group = 400). (Peoples includes Peoples Trust and Peoples Bank, each insured by CDIC.)
Personally, I don't trust ManuLife, Canadian Tire Bank or Laurentian. These are just personal assessments based on accumulated posts from others over time. I think they could be difficult to deal with. I also wouldn't bother with Wyth as it has been bought by EQ. Some people are wary of WealthOne due to its lack of profitability so far, but I am willing to use them myself - within CDIC limits
I don't imagine you will do well at BC credit unions, but I don't follow that market.
RBC is likely to come out with a promotional savings offer in about May as they usually do. Other big banks might also but you need to watch for the fine print. CIBC had a good one a couple of years ago. These typically only last 3 to 6 months but they may be as safe as it gets in Canada.
So, you might end up with something like this: 200k each in Simplii, Hubert, Oaken, Peoples; and 100K each in Motive and EQ. That would keep you diversified, but not too much so, and pretty well insured, minimizing the number of financial institutions as much as reasonably possible while still getting about as good a return as you're likely to get for short term. You could make your own adjustments to this formula if you prefer one FI more than another. You might want to put in a bit less than 100K to allow for interest as it would not be insured if total over 100K for CDIC. You could dump the excess in Simplii or Hubert.
I would say it's best to start the process of opening new accounts before you get the money, so that you are ready for it.
3:12 pm
November 18, 2017
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Peoples Trust/Bank is definitely not online-only. They have one single office in downtown Vancouver with no provided parking but walkable from SkyTrain, reachable from buses.
They have pretty good phone service but currently (last I checked) no automated phone service. They DO provide monthly statements!
RetirEd
RetirEd
3:34 pm
October 21, 2013
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I have been watching house prices in Vancouver since I lived there in the the 1970s, on and off. They did crash at least once in those years, but they did come back.
Real estate is a long term investment. It's reasonable to think it will appreciate over the long term, but not guaranteed Ask anyone from Lytton BC or Mariupol Ukraine.
My one piece of advice is to talk to your insurance agent before you put in offers. They know more about the risks of a given property than anyone, and their insurance is priced accordingly.
I'm at the "downsizing" stage of life. The one thing that is stopping me going to a rental is the lack of flexibility in making interior changes to the unit - lighting, kitchen, bathroom, storage in particular. Otherwise I'd rent for sure. I saw it differently when i was young.
3:52 pm
January 9, 2011
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Thinking priorities, from your two relative posts I'd say safety and fairly short term access to funds are the two. I can't really guess what you mean by not having X$%? of the money, yet?
Yield/quick gain are relatively unimportant to you because the short term focus is all about real estate purchasing, not investing. None of us have a crystal ball about the future BC real estate market, especially given its short term history.
As others have said, #1 is spread the risk. Carve out pieces to the extent of whatever backup insurance you feel is "real". Personally I'm more interested in CDIC than Manitoba. If you agree with all of this, then because HISA rates haven't caught up to speed with short GICs, then places like EQ for $ 100k 3 month 2.05% would be my starting point. There's $ 100k that you could start a short term GIC ladder down the line if you don't buy real estate immediately.
TFSA? Are you not yet into it, or already used up your availability? I ask because you can get a separate additional $ 100k CDIC insurance in that category if not used. So, for immediate access (ie; a 3 month GIC is like cash - which is a house closing estimated earliest timeline for free cash to be needed), then you could double the CDIC insured availability that way.
"Keep your stick on the ice. Remember, I'm pulling for you. We're all in this together." - Red Green
6:07 pm
March 15, 2019
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Back in the day you could buy treasury bills, Bankers Acceptances and/or commercial paper for short term investment. Not sure about now.
6:09 pm
October 21, 2013
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Someone mentioned Steinbach CU (MB) as a possibility. I wouldn't recommend them and will be closing my membership next month.
In addition to my previous complaints about them, I have a couple more recent ones. I attended their recent online AGM. I have 2 complaints from that.
First, I was not impressed with the attitude of the CEO and more particularly the Chair of the Board. Neither showed much interest in seriously answering people's questions and sounded very scripted. The Board Chair was in my mind, borderline insulting to the questioner. Her answer amounted to "we did it this way because we did it this way." I did not ask any questions.
Second, their patronage dividend rate seem to be decreasing significantly each year for past 3 years at least. They don't reveal what the rate will be in the meeting or anywhere else; you have to wait to look up and see what you got and figure it out. If I'd realized this was the situation, I might have asked a question. I think members deserve more transparency and explanations.
They were keen to brag, however, about increasing membership and assets.
Please write your comments in the forum.