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Email this10:30 am
November 25, 2019
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I'm wondering what are the best rates currently offered by Canadian banks or brokers on USD GICs?
Is there any website like this one that maintains current USD GIC rates in Canada?
10:34 am
October 27, 2013
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I am not aware of a comprehensive site but https://www.ratehub.ca/gic-rates-arent-high-enough/gic-rates/usd/1-year lists some rates at the major banks. Their brokerage arms would also have a few USD GIC options
3:40 pm
November 8, 2021
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Considering we're talking about USD, Tang has some very competitive rates right now.
7:39 am
April 6, 2013
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Better US$ GIC rates are available through Scotia iTRADE and BMO InvestorLine:
| US$ GIC Issuer | 1 yr | 2 yr | 3 yr | 4 yr | 5 yr |
| Tangerine Bank (via Tangerine.ca) |
4.00% | 3.85% | 4.75% | 4.15% | 4.30% |
| Bank of Nova Scotia (via Scotia iTRADE) |
4.80% | 4.90% | 4.95% | 5.00% | 5.00% |
| Bank of Montreal (via BMO InvestorLine) |
4.85% | 4.95% | 5.00% | 5.05% | 5.10% |
Unlike for Canadian Dollar GIC's, Scotia iTRADE and BMO InvestorLine only offer US$ GIC's from one issuer, from their parent bank.
8:22 am
August 10, 2018
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Brokerage investment savings accounts have as much as 3.65% for $US without locking in.
12:18 pm
November 25, 2019
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Thanks all for your replies.
I've never invested in a GIC through a brokerage. I do bank with Tangerine. However, given that the rates of Scotia iTRADE and BMO InvestorLine are much higher, at least for the longer term (4 or 5 year) USD GIC, I'm interested in investing in one of them, or maybe both of them. But I've the following questions and would appreciate if people experienced in buying such GICs can advise suitably:
I'm hoping that to invest in these USD GICs, I just need to open an account with the brokerage, fund the account, and then place the order to purchase the USD GIC, of course at the then prevailing interest rate. I hope I don't have to trade stocks or buy any other fixed income securities through them during the entire term of my GIC. (I already have brokerage accounts at IBKR and Questrade for trading).
1) Do I have to pay any commission / fees for buying USD GICs? And if so, how much?
2) Do I have to pay any monthly / quarterly / annual account maintenance fees? (As mentioned earlier, I don't plan to make any stock or bond trade through them. I just want to fund my account and then invest the ENTIRE amount in USD GICs. I don't want to keep any minimum cash balance in their cash or margin account to avoid monthly fees.)
3) I already have funds in USD and don't plan to convert them in CAD. So, do these brokerages allow me to fund my account in USD? Or do they force me to bring funds in CAD and then convert in USD at their rates? (FWIW, IBKR does this for funding registered accounts (new contribution) but not when the existing stock and cash positions are transferred from another broker.)
4) Any other points I need to be aware of
12:24 pm
November 25, 2019
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Just to add to my previous post, when I called Questrade to find out about GIC investment, I was told that:
1) They don't charge ANY commission or fees for buying GICs.
2) The CDIC insurance of the bank will be applicable (and not brokerage's IIROC etc).
3) There won't be any a grace period with non-redeemable GICs when buying a GIC through them (This is in contrast to many / most banks offer a 30-day grace period in which they allow investors to withdraw the funds or give the higher interest rate in case of rate increases. But such a grace period doesn't apply for buying GICs through Questrade.) If I buy a non-redeemable GIC, I'm locked in for the term of the GIC at the given rate. No changes can be done even on the next day.
4) They offer only CAD GICs, and not USD GICs.
12:59 pm
October 27, 2013
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To respond...
1) I know of no brokerage that charges commissions to buy/sell GICs. The commission is paid by the issuer of the GIC to the brokerage to carry them.
2) Each brokerage will have account minimums (may be $15k-$25k) to avoid account minimum fees. I know of no restrictions on the type of trades you need to do, i.e. no need to trade stocks and bonds if all you want are GICs and ISAs. However, you will need to specifically ask the brokerages you are interested in.
3) The major brokerages should allow you to fund the account in USD, most likely be a cheque drawn on a USD bank account. In the case of BMO IL, if you have a linked USD bank account (AccountLink), you can deposit USD into that account at a BMO bank branch teller (not ATM). I have funded both of my Scotia iTrade USD and BMO IL brokerage accounts with cheques or teller deposits. However, if what you have is CAD, do a CAD deposit and then using an interlisted stock, do a NG (Norbert's Gambit) to get USD. Ask the brokerages you are interested in how to fund in USD.
4) Major brokerages usually only carry GICs which are from CDIC insured institutions so CDIC insurance would insure against the issuer (not the brokerage) going insolvent. The GICs would also be covered via CIPF insurance insuring against insolvency/bankruptcy/malfeasance of a failing brokerage.
The major bank brokerages will offer corporate family USD GICs, i.e. Scotia iTrade will offer Scotia (only) USD GICs. Same with BMO Investorline with Bank of Montreal USD GICs. Likely the same for the other major bank brokerages but I cannot comment on that.
The discount brokerages are order execution only. They will sell you, as agent, what is offered. There are no grace periods, no changing maturity instructions, no changing terms, etc. They cannot do that since they don't issue (control) the GICs. They are in nominee name, not direct client name.
6:29 pm
April 6, 2013
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Any GIC commission is usually embedded in the quoted yield at investment dealers. That is the case with Scotia iTRADE and BMO InvestorLine.
HermanH found an oddball brokerage that charged $15 per GIC!
If one signs up with Scotia iTRADE, be sure to use their promo offer code for their winter promotion:
$50 for $1,000 new money.
$100 for $5,000 new money.
$150 for $25,000 new money.
…
$2,000 for $1 million new money!
New money needs to remain with them until June 30, 2023. Not an issue if one is buying five year GIC's.
BMO InvestorLine is running a similar promotion:
$150 for $15,000 new money
$250 for $50,000
$500 for $100,000
…
$2,000 for $1 million
2:12 am
November 25, 2019
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Thanks AltaRed for a detailed reply addressing each of my points and Norman1 for the promotions. I'll call both of them on Tuesday and if things work out will open an account.
A follow-up question: To the best of my knowledge no Canadian bank offers a USD GIC in a registered account (RRSP & TFSA). However, brokerages do allow USD stocks in the registered accounts (maybe bonds too -- but since I don't invest in bonds I'm not sure of this).
So, can I open registered accounts at Scotia iTRADE and / or BMO InvestorLine, fund the accounts by transferring the USD cash in my RRSP & TFSA at IBKR (through ATON), and then use these funds to buy the 5-year USD GICs?
7:00 am
October 27, 2013
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I know of no restrictions holding USD denominated securities of any kind in a bank brokerage registered account, including USD GICs. However, one would have to ask the brokerages themselves.
I imagine one can transfer USD cash or USD denominated securities from one brokerage such as IBKR to a bank brokerage. I would expect IBKR to charge a transfer fee, perhaps in the order of $125-150, and you would have to see whether the bank brokerage would cover that transfer fee for you. Whether they do or not may depend on how much you would be transferring over, i.e. are you a good enough prospective customer for them to compensate you for outgoing transfer fees from IBKR.
FWIW, I've never known of anyone who would open a discount brokerage account just to invest in GICs, never mind USD GICs, but I also am not aware of any restrictions in doing so. Brokerages are interested in AUM from which they expect the customer to then start trading (in some form) for the brokerage to make money from the customer via commissions of some sort, e.g. stocks, bonds, GICs.
8:00 am
November 25, 2019
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Thanks again Altared for your reply, helps a lot.
FWIW, IBKR does NOT charge any transfer out fees for any (margin or registered) accounts. They don't pay the other institution's transfer out fees either. (And their commissions are among the lowest. I was fed up paying a commission of $9.99 + $1 per contract for options at Questrade. In addition, Questrade charges $25 assignment or exercise fee -- so much for the often referred to as the lowest commission brokerage in Canada. On the other hand, IBKR commission is less than a dollar and they don't charge any assignment or exercise fees. My commission on stock trades is also typically less than a dollar. It's slightly higher for CAD stocks. Depending upon the number of trades, one saves a lot on commission unless they want to trade a huge lot of shares which is typically the case with penny stocks.)
Yes, the plan is to open a brokerage account only for USD GICs, use the GIC investment towards any account minimum to avoid monthly maintenance fee, and then close (transfer out) the account on GIC maturity if interest rates are far lower and I want to move the funds to stock market. I'm aware that the GIC maturity I'd have to pay the transfer out charges of Scotia or BMO unless I get it reimbursed by the other brokerage, which as I mentioned above IBKR won't entertain but Questrade will. Or else I'll think that the $250 - $300 I received for the account opening promotions are taken away by the brokerage at the time of transfer out.
10:38 am
April 6, 2013
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dickyran333 said
… To the best of my knowledge no Canadian bank offers a USD GIC in a registered account (RRSP & TFSA). However, brokerages do allow USD stocks in the registered accounts (maybe bonds too -- but since I don't invest in bonds I'm not sure of this).So, can I open registered accounts at Scotia iTRADE and / or BMO InvestorLine, fund the accounts by transferring the USD cash in my RRSP & TFSA at IBKR (through ATON), and then use these funds to buy the 5-year USD GICs?
You'll have to ask Scotia iTRADE and BMO InvestorLine if those can be handled by them administratively.
There used to be issues having a US$ side to registered accounts. Not all the brokerages supported having a US$ side to a TFSA or RRSP, for example. So, any US$ dividends/distributions would be converted to C$ if it wasn't spent the same day on a purchase.
Some brokers that did support a US$ side to registered accounts charged extra for that feature.
I've also read that some brokers don't support account transfers in US$! Not an issue with stocks as stocks are denominated as shares and not as US$ or C$. 100 shares of Microsoft, for example, from the US$ side of a sending brokerage account will still end up being 100 shares after transferred into the C$ side of the receiving brokerage account. But, US$30,000 won't end up as US$30,000 of US$ GIC's if it needs to be exchanged for C$ to transfer and exchanged again to US$ to buy the US$ GIC's.
9:13 pm
November 25, 2019
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I don’t know about ScotiaTrade and InvestorLine, but I’m sure than both IBKR and Questrade do support both CAD and USD in registered accounts. Both of them hold CAD stocks, USD stocks, CAD cash, and USD cash in each of my margin, TFSA, and RRSP accounts. The transfer of assets (both USD stocks and USD cash) also work just fine. I’ve transferred my USD cash, CAD cash, USD stocks, and CAD stocks from Questrade to IBKR through ATON (Automatic Transfer Online Notification) and my USD cash and USD stocks from Questrade appeared just fine in IBKR.
However, I must point out that both of them differ when it comes to handling new contribution and withdrawal. IBKR does NOT allow new contributions and withdrawals in USD. New contributions must be made in CAD. Similarly, withdrawals must be in CAD only. However, Questrade is just fine with new contributions and withdrawals in USD. They use the USDCAD exchange rate of that day to determine the CAD amount for the CRA reporting. I now forgot whether they use their own exchange rate or the BoC exchange rate.
But I agree that some brokerages may not support even the transfer of assets in USD (as against the restriction on only new contributions and withdrawals like IBKR above). And now that you mentioned this I’m suspecting that those brokerages are most likely the ones associated with banks as they can charge about 2.5% margin each way. Let's see what happens.
8:48 pm
November 25, 2019
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Just an update, both Scotia iTrade and BMO IL told me that they accept funds and stocks in both USD and CAD in the registered accounts. I can transfer USD cash from another institution or make a new contribution in USD. They use the USDCAD rate for CRA reporting and thus don’t force CAD to USD conversion on investors. They also confirmed the current promotion as well as transfer out fees of $150. there won't be any maintenance fees as long as my USD GIC meets their account minimum (CAD 25K).
The only issue is that the RRSP transfer would take 4 weeks, even for ATON. To me that’s quite long. My transfers between Questrade and IBKR didn’t take more than 5 business days. The IL CSR appeared to be quite new and so when I highlighted my ATON experience at other institutions, he spoke to his supervisor and then told me that earliest they can do is 3 weeks. So I’m going to consider at least 4 weeks from the time I open the account. The iTrade CSR was quite a pro and was well aware of ATON. But he still told me that it takes 4 weeks at iTrade. I don’t know what they do with these funds for 3 extra weeks.
Anyway, do you guys think that the USD GICs would still be available after 5 – 6 weeks? Or Scotia & BMO may get enough USD and withdraw their GIC offers?
While IBKR doesn’t charge transfer out fees, both iTrade and IL will charge $150 each should I have to move funds out because they withdrew their 5% USD GICs and they don't have any USD GIC offer worth considering.
5:46 am
November 23, 2017
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SBI Canada Bank now showing 1 yr. USD GIC at 5.6%.
6:12 am
February 8, 2022
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Wow. That’s impressive. Are these people legit? Very impressive on 1 -3 year
7:18 am
March 30, 2017
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bigzim said
Wow. That’s impressive. Are these people legit? Very impressive on 1 -3 year
their web site looks rookie. a hard pass for me. Also no chance I will put in over CDIC limit, which is basically like ~$70k US. Not worth the effort at all.
7:53 am
February 8, 2022
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I think you may want to do more homework on this multinational before jumping to conclusions. Besides. CDiC covered. The invested capital worldwide dwarfs the Canadian institutions. Up to you.
State Bank of India (SBI) a Fortune 500 company, is an Indian Multinational, Public Sector Banking and Financial services statutory body headquartered in Mumbai. The rich heritage and legacy of over 200 years, accredits SBI as the most trusted Bank by Indians through generations.
SBI, the largest Indian Bank with 1/4th market share, serves over 45 crore customers through its vast network of over 22,000 branches, 62617 ATMs/ADWMs, 71,968 BC outlets, with an undeterred focus on innovation, and customer centricity, which stems from the core values of the Bank - Service, Transparency, Ethics, Politeness and Sustainability.
The Bank has successfully diversified businesses through its various subsidiaries i.e SBI General Insurance, SBI Life Insurance, SBI Mutual Fund, SBI Card, etc. It has spread its presence globally and operates across time zones through 229 offices in 31 foreign countries.
7:59 am
April 27, 2017
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bigzim said
I think you may want to do more homework on this multinational before jumping to conclusions. Besides. CDiC covered. The invested capital worldwide dwarfs the Canadian institutions. Up to you.
Right now its a bit difficult to do the homework as their website may have crashed. Looks like they also need to do the homework.
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