Money Market funds or in an ISA? | Page 2 | General financial discussion | Discussion forum

Which then begs the question, are they getting the full gross 1.35% yield or the 1.10% net yield -- I could have been given incorrect information, but it's my understanding that the customer can only get 1.10% effectively on their money no matter what the advisor arrangements are

I'd love to find out that I've been misinformed, because If I can get the full 1.35% instead of 1.10% simply by making a phone call then you can bet your Aunt Fanny that I'll be making that phone call

The last time we discussed it, my friend was getting .85% on TDB8151 and TDB8155 if I remember correctly, but that was a couple of months ago or so. If I get a chance, I will find out what the current rate is.

I just checked the previous thread, where Bill gave me the advice. Looks like it was 8150 and 8155 that my friend invested in at TDDI. Sorry for the confusion; my eyes aren't what they once were, and it looks like I mis-read a digit, but I was right about 8155.

Still, this kind of investment can be done.
See, starting at #53, https://www.highinterestsavings.ca/forum/gic/should-you-consider-an-all-gic-portfolio/page-3/#p24355

Current rate, according to TD (page previously posted by Norman1) is 1.10% as of Jan 22/18.
https://www.tdassetmanagement.com/solutions/additional-solutions/td-investment-savings-account/index.jsp
If you click on the "brochure" on the right side of the page, you will be able to see all the ISAs listed and it will tell you which ones are F-series and which are not. The F-series ones pay 1.35, but those folks are also paying an advisor, one way or another.

TD is careful to point out in the footnotes that these are not mutual funds, even though listed under that umbrella, but savings accounts with variable rate. Probably the same at Scotia. No excuse for charging $65!

Let me try to sum up, at least as it pertains to the TD products, although the practice is probably industry-wide or nearly industry-wide

If you want to invest in the TD ISA products and you're doing your own thing without a registered financial advisor, you will only be allowed by TD to purchase their products currently yielding 1.10% (e.g. symbol TDB8150)

If OTOH you do have a financial advisor, that person can get you into the TD F-series fund (e.g. TDB8151) that currently has a gross yield of 1.35%, from which (as Norman correctly pointed out) you mentally need to subtract whatever fee the advisor is going to extract out of you for that service -- and if that fee is a typical 1/4 point i.e. 0.25% of your return, then you're still only going to net 1.10%, so it doesn't make any difference to your ultimate return

Having said that, Norman is correct that your mileage may vary, but only if you have an advisor, because they can get you into the higher yielding 1.35% product yet you might be able to get them to take less than the 0.25% fee example quoted above (especially on passive products like an ISA where the advisor doesn't really have to do diddly-squat) -- if which case any fee they charge that is smaller than the assumed 0.25% example will improve your net yield

And BTW, I would not have known any of this without all the great input from the people contributing to this thread

I can't help but wonder if anyone has ever met an advisor who recommended any kind of ISA.
The one we had some years back was reluctant to even sell us any long govt bonds in RSP when they were paying over 12% - but we twisted his arm and he agreed - finally! It was the best investment we made with his "advice".

It strikes me that the .25 is a kind of compensation for the fact that he is not going to make any money from selling you another product rather than a fee for advice per se.

I suppose you could say (charitably) that it's a fee for knowing what it took us about 30 posts and several minds to clarify! - provided they actually know and are willing to tell us without having to beg for the info.

Londonguy said
If you want to invest in the TD ISA products and you're doing your own thing without a registered financial advisor, you will only be allowed by TD to purchase their products currently yielding 1.10% (e.g. symbol TDB8150)
…

TD Bank and TD Asset Management are quite agnostic about it. They pay either (a) 1.35% to investor plus zero to dealer or (b) 1.10% to investor plus ¼% to dealer. I think they will fill orders for the F series from any dealer that is willing to accept orders for it.

I used the term dealer because there isn't necessarily any advice or any useful advice given by the investment dealer or mutual fund dealer.

It is the dealers, like TD Direct Investing, who refuse to accept orders for the F series.

Dealers will negotiate the fee for large investments. But, it may be a hassle for smaller dealers to sell the F series and then deduct the reduced trailer from the accounts themselves.

Scotiabank's Advisor Deposit Services seems to facilitate this for their ISA's by offering a third series, an E series:

Scotia iTRADE recognizes and refuses online buy orders for their F series. But, it looks like Scotia iTRADE will accept online buy orders for their E series, like DYN1325, should one have $100,000+ for it.

Full details, including the FundSERV codes and current rates, about the Scotiabank ISA's are at Scotiabank Advisor Deposit Services: Product Descriptions.

For some reason, Scotia iTRADE only accepts buy orders for two of the five issuers (Bank of Nova Scotia and ADS Canadian Bank).

Also, check TD Direct Investing's mutual fund fee schedule, especially for early redemption fees. Scotia iTRADE will only waive its 1% early redemption fee for Scotiabank group ISA's and mutual funds:

³ Scotia iTRADE will charge an early redemption fee of 1% (minimum of $38.88) to your Scotia iTRADE account on the redemption or switch of all mutual funds, any other fund products and Investment Savings Accounts (other than Scotia Money Market Funds, Dynamic Funds and Scotia Mutual Funds) held for less than 90 days. Early redemption fees may also be charged by some mutual fund companies. Please refer to the prospectus of each fund for details. …

Earlier discussion "High Interest" rates at discount brokers has link to a Canadian Capitalist page listing the HISA's available for discount brokerage accounts.

Bill said
Wayno's point is why would you leave loose cash with the discount brokers who can't match the rates offered by most of the institutions highlighted on this site? Just transfer any money you want to park temporarily from your broker to one of the online banks offering more, why bother fiddling with the broker's MM funds or ISA's when their rates are always inferior to those featured here?  

What if the loose cash in between trading is in registered accounts at the broker? It's impractical to move to an online bank offering more so other than MM funds or ISA's is there anything better to park the money temporarily? The discount brokers know they don't have to offer much with registered accounts since our hands are tied so to speak as we cannot move the money easily.