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Email this6:20 am
June 25, 2018
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For parking in a non-registered account, $1 million, what is the best option after taxes? Goal is to buy a condo in one year. I can’t find the answer in the forum, so please post link if this has been answered previously. Thanks
edit: for example CASH etf. Etc
6:33 am
April 27, 2017
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Gic wealth management pays 5.75% for a 1-year GIC. https://www.highinterestsavings.ca/gic-rates/
You get 57.5K in interest. But you will be above the insurance threshold - something to be aware of.
7:06 am
June 25, 2018
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So I should just look for the highest GIC rate and not consider an ETF that may or not be taxed at the capital gains rate? Sorry I am kind of slow after my brain injury.
8:07 am
April 2, 2018
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fxsti said
So I should just look for the highest GIC rate and not consider an ETF that may or not be taxed at the capital gains rate?
You have to ask yourself: do you want to know Exactly how much you are going to get after a year or you want to gamble for higher return?
8:17 am
October 27, 2013
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fxsti said
So I should just look for the highest GIC rate and not consider an ETF that may or not be taxed at the capital gains rate? Sorry I am kind of slow after my brain injury.
I agree with post #4 that you should not put it into anything with capital risk for such a short period of one year. The best you can do is probably a one year GIC for a fixed return, or gamble on interest rates by buying a cash ETF or a brokerage ISA like DYN6004 @ 5% or a money market mutual fund that may pay about the same.
The only cash ETF I know of that uses derivatives to capitalize the interest (and thus incur cap gains) is HSAV and because it is closed to new funds, it only trades on the secondary market and is subject to having market prices above/below NAV. I don't know how much of a market price gamble that might turn out to be in a year's time. As of today, https://horizonsetfs.com/ETF/hsav/ HSAV is trading at $107.36 which is above NAV of $106.6402.
8:19 am
April 6, 2013
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$1 million for a condo in a year. I wouldn't go for an ETF unless the ETF has a contractual obligation to redeem your units for $1 million plus the interest.
For some portion of the return as capital gains, I would look at Government of Canada bonds that mature in a year and were issued a few years ago with low coupons, like ½%. Such low coupon bonds are now sold at a discount to face value as a result.
Keep in mind that you won't be the first to notice such bonds. Bond investors have bid up the prices a bit and the after-tax return may not be that much different than from a fully taxable GIC. One needs to calculate the after-tax return using one's own tax rate to see if a given bond is worthwhile.
11:56 am
October 21, 2013
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The priorities need to be security of deposit, competitive rate, and insurance. Taxes are not a major priority here.
In addition, if you have brain fog etc., you need something that is easy to carry out and uncomplicated.
My suggestions:
1. Consult a deposit broker, preferably in person, and ask them what they could get for your million with all funds insured. You would end up with money at several financial institutions, but it might pay best and would be easy to carry out.
2. You might also consider putting it all in a GIC at Simplii, currently offering 5.0%, since Simplii is insured as part of CIBC. You could also consider Tangerine, currently offering 5.25% for one year. Tangerine is owned by Scotia but insured on its own merits only but many people on this forum feel it is very secure. The idea would be to put all your money in one place.
3. Put it all in a one year GIC at a Manitoba online credit union. Manitoba system insures total amount. Achieva is offering 5.1%.
You could also divide your money among 2 or more of these alternatives.
I have made these selections because they are relatively easy to pursue and will meet the necessary criteria. Otherwise, you may become confused, especially if confronted with aggressive sales tactics or too many choices , or you may end up taking inappropriate risks.
6:31 pm
April 2, 2018
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I doubt housing prices will go down in a year (or ever).
What cost 1mil today might cost 1.1 or 1.2 mil next year. Zillion immigrants are coming; they need space to live. Some of them are very loaded and will buy anything decent at any price.
If you have 1mil Today buy condo NOW. Next year you might sell it or trade it for better/nicer one.
7:11 pm
April 6, 2013
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For $1 million, RBC Royal Bank will pay Prime minus 2.0% = 5.2% on their variable rate one-year Prime-Linked Cashable GIC:
| Principal Amount | Rate | Prime = 7.20% |
| $5,000.00 - $249,999.99 | Prime minus 2.45% | 4.75% |
| $250,000.00 - $999,999.99 | Prime minus 2.25% | 4.95% |
| $1,000,000.00 or more | Prime minus 2.00% | 5.20% |
Fully or partially cashable after 30 days with interest accrued to date.
8:11 pm
April 27, 2017
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pooreva said
I doubt housing prices will go down in a year (or ever).
What cost 1mil today might cost 1.1 or 1.2 mil next year. Zillion immigrants are coming; they need space to live. Some of them are very loaded and will buy anything decent at any price.
If you have 1mil Today buy condo NOW. Next year you might sell it or trade it for better/nicer one.
You don’t know the future any more than I do. There are different scenarios, depending on unemployment, inflation, interest rates, housing starts and a whole lot of other parameters.
6:23 am
March 30, 2017
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pooreva said
Zillion immigrants are coming; they need space to live. Some of them are very loaded and will buy anything decent at any price.
They need space to live, for sure.
Some are very loaded, depends on where they come from, very loaded is the minority.
2022 ranking
Most expensive cities to build a home per m2
Hong Kong
London
Tokyo
New York
Singapore
San Francisco
Seattle
Toronto
Vancouver
Dublin
and I believe Toronto moves up the list yet again for 2023.
12:13 pm
October 21, 2013
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We have no info on why OP is postponing for a year, so no need to comment.
Re: Norman1's post, i: Is that a guaranteed rate at RBC or does it move during the year according to prime? I am leery of sending someone to RBC because of the high risk they will try to push him into a mutual fund, eTF, or if he refuses those, a market-linked GIC. That seems to be standard practice at the big banks. If he decides to invest there, he will need to read all the paper work carefully and may need to bring along a magnifying glass. I say this because I have found their staff willing to lie in order to make a sale and make their quota. Thus, I would not recommend them to someone with a brain injury.
1:00 pm
April 6, 2013
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For $1 million in the RBC Prime-Linked one-year Cashable GIC, the rate is Prime minus 2%. So, the rate for each day of the year will move with any changes in the Royal Bank prime.
If one already has online banking with RBC, then no branch visit is needed. I opened my RBC GIC account through online banking and started purchasing GIC's.
TD tried to upsell me one time. I cut the conversation short by informing the agent that I was there for a GIC and I would not be providing any information for a suitability determination. No suitability determination is required for a GIC….
Keep in mind, a client visiting a bank branch with $1 million is entitled to meet with a rep who is licensed for more than just mutual fund sales. People with $1 million to invest can demand to meet with a licensed investment counselor or portfolio manager.
5:42 pm
October 21, 2013
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Thanks for the clarification on the prime link, Norman. That's what I thought; rate not guaranteed. Just thought OP should know that.
I've managed to avoid the upsell too, but, sadly, my mother, then 98, was not up to the challenge in dealing with aggressive sales at RBC. We need to bear in mind that not everyone is able to deal successfully with these people, for various reasons. Even in online purchases, you can make a mistake and get the wrong product. for that matter.
Honestly, for a one year investment, even with a million, I think OP would be better off avoiding the managerial and advisory class at a FI.
6:28 pm
April 6, 2013
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There is a tradeoff with the prime tracking rate and cashability.
Rate drops to 4.0% for an RBC one-year cashable GIC if one wishes to have a fixed rate instead of a variable rate.
Rate drops only a bit to 5.15% for an RBC one-year non-cashable GIC if one wishes to have a guaranteed rate and doesn't mind being locked in for the full year.
6:40 pm
November 18, 2017
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I'm not big on real estate, but I'd agree that buying now is strongly favoured as we're just coming out of a housing slump. If you can pay cash, it's almost a no-brainer, but if you expect to have to carry a morgtage it gets complicated.
Have you considered buying a place that allows you to rent part out to a tenant? Evan a little capitalism can turn an expense into something more profitable. What you live in is personal consumption; what you run as a business has many advantages that can flip things into a) a higher escalating equity, b) deductable expenses (despite taxable capital gains) and other stuff I'm no expert in.
Finding and getting money out of tenants can be tough but you'll most likely have to get only one good one. Avoid kids and dogs!
RetirEd
RetirEd
7:17 pm
October 21, 2013
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Norman1 said
There is a tradeoff with the prime tracking rate and cashability.Rate drops to 4.0% for an RBC one-year cashable GIC if one wishes to have a fixed rate instead of a variable rate.
Rate drops only a bit to 5.15% for an RBC one-year non-cashable GIC if one wishes to have a guaranteed rate and doesn't mind being locked in for the full year.
However, by the time he buys this thing, waits a bit, decides it would be better to cash it in, etc, he's in for another full year, making the total longer than desired.
Please write your comments in the forum.