Buying a HISA ETF | General financial discussion | Discussion forum

I don't see any point in any kind of ETF for your purpose. Why not just put it in a regular HISA?

For 2.15, I wouldn't even bother with research.

You could get 2.25 at Hubert, and there is no transfer out fee, so that whenever you decide what to do longer term, you could transfer it if you want with no penalty.

You may be right, although I don't understand why one would put this money in a brokerage account with no plan to make money from it. Most of them charge way too much to transfer out.

Surely it would have been better to have put it in a simple HISA and have the flexibility to do whatever you want later at no extra cost.

Oh, I see.
I don't think I can help you, then. I am not familiar with the investments you have mentioned and don't immediately have any ideas that will reliably match or exceed inflation without risk.

You already have this money in an RSP. Where do you have it now?

mapleleafman said
Sorry, should have added clarification on my circumstances.

I am a non-resident Canadian citizen, and a US citizen. Many banks do not allow me to own HISA because of my non-residency. Many HISA's are TFSA's only which I cannot own as a US citizen.

This is probably because of the limitations in online account opening processes. In-branch, many banks will open HISAs for non-residents, as long as you have a non-resident SIN (begins with '9'). TFSAs can be owned by US citizens; the problem is your non-residency for tax purposes. Where are you living right now, in Canada or the U.S.?

If the former, while you can't own a TFSA due to that status, you really should either consider (a) applying for permanent residency or (b) if not expected to be here long-term (at least a couple years), keeping your assets domiciled in the U.S. It's far too much hassle for you, I'd argue. If the latter, avoid dispersing your assets around the globe; it will be a nightmare for your future executors(trixes). You really have no good reason to hold assets in Canada; besides, compared to Charles Schwab, our brokerage firms offer zero added value.

All my non-registered funds are in HISA's such as with B2B earning a taxed 3.3%.

I maxed out my RRSP ($32k) this year as I had a very high income and tax bill. I simply want a safe investment similar to a HISA so my capital is not at risk and not eaten by inflation. (A profit over inflation would be preferred). I do not want to invest in equity at an ATH especially if I may need the capital in a few years.

If you are a non-resident for tax purposes, you cannot own an RRSP, so some clarification is needed here.

I have no idea what my near future needs or plans are. I may even liquidate the RRSP in the coming years for property purchases in the states and pay the 25% withholding tax.

Im looking at HISA ETF's such as PSA, Evolve ETF (https://evolveetfs.com/wp-content/uploads/2019/11/HISA-FactSheet-November-21-2019-2.pdf) or short term corporate bonds such as VSC.TO which would give me a slightly higher yield.  

Because of the above, I would personally recommend you stick with the HISA ETFs as your situation is, to put it mildly and diplomatically, uncertain, highly fluid, and in flux.

Cheers,
Doug

OP is correct that he can't have a TFSA, because he's a US citizen and the US doesn't recognize TFSAs for tax exemption.

Let's focus on the RSP.

He can't "apply" for Cdn residency because he is a Cdn citizen.

I'm not clear why he decided to take out the RSP as opposed to a 401k etc., but there must have been a reason. Perhaps they are less flexible about withdrawals. And it's done now, so he has to figure out what to do with the money.

It shouldn't matter the what and why the $32k is in the RRSP albeit more clarity in the original post could have provided for more focused responses so far. There are numerous reasons* for the $32k of cash currently in the OP's RRSP.

To the OP: I will respond here rather than to your equivalent post over at Financial Wisdom Forum. Firstly, use the link over at FWF to understand the discussion we have had on PSA and CSAV, and go to Morningstar and the ETF provider's websites to look at the history of these ETFs. You will see out-sized returns in 2019 and a huge growth in AUM. Why is that? Further, there is no assurance those current yields will hold for any length of time. They could easily fall to <2%, although it is hard to say they will fall below 1.6%, the threshold for brokerage in-house ISAs. Not enough is known given the short history and anything is speculative thought.

As to exchanges, don't worry about that. Your brokerage should have arrangements with all of the exchanges. The TSX is only one of a number in Canada. https://en.wikipedia.org/wiki/Category:Stock_exchanges_in_Canada If you place an order for PSA or CSAV, it will be routed accordingly to Neo or TSX or?

However, be aware not all online brokerages will sell you PSA or CSAV. In Rob Carrick's recent review of best online brokerages for 2020, BMO IL, TDDI and RBCDI are listed as NO, i.e. they will not sell these ETFs to you, so if you are with one of those, you might as well forget it and stick with the in-house ISAs @ 1.6% or so.

* One reason could be a scenario somewhat like this: The OP left Canada for the USA in tax year 2019 and had to crystallize a bunch of non-registered investments, or a business, and thus has considerable cap gains taxes to pay Canada for tax year 2019. The OP had $32k of contribution room in his existing RRSP which might already contain $500k of existing assets, so he has used the contribution room in the last 30-120 days to reduce his Canadian tax bill.