Brokerage or online bank offering best GIC rates inside a RRIF or RRSP | GIC discussions | Discussion forum

As each discount brokerage has different GIC and HISA offerings that they make available, I can't say with any degree of certainty whether they'd be available or not. You could, I guess, open up multiple discount brokerage accounts, but be mindful of annual administration fees when your combined personal account or household account balances are under a set threshold (usually $15,000).

What I can do is share with you the GICs available at Scotia iTRADE, where I have my discount brokerage accounts. They are in three PDF files, one with 30-90 day cashable GICs, one with 6 month cashable GICs, and one with 1-5 year non-redeemable GICs.

Annual GICs - 1-5 years - https://drive.google.com/open?id=1MUgnAfYVGNzg8FOzK2ljcxDM--TJ7E0P
6 month GICs - https://drive.google.com/open?id=1iWJqeGmZrH1WDC7uMmx0kHEW99KPv6Kk
30-90 day cashable GICs - https://drive.google.com/open?id=1UeAZzZnvPT_JsjHcWUYcXpu7duKNdMEM

In terms of savings accounts, generally speaking, among the "Big 5" anyway, each makes available only the series A HISA funds. Through various issuers, Scotiabank's HISA savings accounts (series A) for personal customers in CAD funds pay 1.65%. TD's brokerage savings accounts (series A) pay 1.60%.

I do have a Virtual Brokers account I've never used, but have to work on some other things right now. I'll try and get their GIC availability on or before next weekend.

Cheers,
Doug

Lewis, most of my RRSPs are at Scotia MacLeod. As you mentioned, their GIC rates are not competitive. I did purchase my own OAKEN RRSP GIC last year.

Lewis100 said
Hi Doug,

Thank you for your rapid and precise answers.

1. The amounts that I am dealing with are such that neither transfer fees nor account minimums are a factor.

Oh, okay, that's good. I just wanted to make sure you'd be aware of that.

2. Looking at the rates offered by Scotia iTrade for 1 to 5 year GICs, I see that they are, by and large, the same as those offered by TD Direct Investing. There is a larger choice of issuing institutions than at TDDI, but only minor differences in the rate.

Oh, that's interesting that Scotia iTRADE's GIC offerings is actually greater than TD Direct Investing (I had thought Scotia iTRADE's was pretty slim).

3. My understanding is that I can open an RRSP account at Oaken and then buy a GIC issued by either Home Bank or Home Trust, both subsidiaries of Oaken, at the rates posted here: https://www.oaken.com/gic-rates/. As you can see, 3.40% compounded, for 5 years. A friend of mine did this last week for his RRIF. But one of your links directed me to a different site, https://www.hometrust.ca/deposits/deposit-rates/deposit-rates-home-trust/, where the posted rates are markedly lower, for example 2.83% for five years. That's in the range of rates offered by TDDI or iTrade, the rates that I'm trying to avoid.
-- What accounts for the difference between the two sets of posted rates for Oaken / Home Bank?

Please re-read what I wrote - I explained this difference, I thought, quite well in my original reply to you where I discussed deposit broker rates versus direct-to-consumer rates. To get those Oaken Financial and EQ Bank rates, you'd have to open separate accounts with each of Oaken Financial and EQ Bank and then transfer out (with the requisite partial RRSP/RRIF transfer out fee).

After you've re-read what I originally wrote, let me know if you're still confused, and I'll try and rephrase.

4. Diversification between the GIC issuers and simplicity of administration are major considerations, so I'd much rather hold the GICs in one -- or two -- accounts that give me a choice of issuers at the best possible rates.

Possible? Has anyone else out there found a way to resolve this dilemma?  

It's possible to use a deposit broker, if that interests you. I've never used them, but a former colleague of mine used MGI Financial (since acquired and rebranded as Desjardins Financial Security). She dealt with the Regina office and was very happy with them. They are located at: https://investdfsi.ca/

From there, click on "Top Rates," or here, and you can see the best rate available for given provinces is 3.50%.

Hope that helps,
Doug

Loonie said
Looks like our thoughts were overlapping, Doug! I had just amended mine to add info about GIC brokers when I saw what you had written. Didn't read your earlier post thoroughly.  

No problem...thanks for your reply as well, Loonie. I think Lewis should be pretty well covered now. I echo what you said...it comes down to convenience and simplicity. Assuming he also has stocks and/or ETFs at TD Direct Investing, what may make the most sense, to me, is to do a partial transfer out of his self-directed discount brokerage RRSP (the cash and GIC portions) to a deposit broker, such as the one you suggested or Desjardins Financial Security that I suggested. It would be better than opening a half dozen or more RRSPs at each respective bank or credit union, but that's always an option, too.

Cheers,
Doug

Loonie said
It would be good in theory to make a large lump transfer, but as I understand it they are not all maturing at the same time so might be difficult to do that, no?  

Depends who the GICs are with. My understanding is if both institutions deal with those GIC issuers, GICs can be transferred out in-kind, no?

At any rate, the GICs could be transferred out as they mature, as you suggest.

Cheers,
Doug

If you don't tell the receiving institution that you're just going to park the funds in a non-commission GIC (or GICs), most, if not all, online discount brokers offer fee rebates of between $125-150 CAD, per account, provided that each transfer of new money is between $15,000-25,000 (varies per institution).

I still think, if you don't mind visiting a deposit broker in-person, you'd be better off at least consolidating your GICs and HISAs within a single RRSP, RRIF, and/or TFSA and then maintaining discount brokerage accounts with a single discount broker for your equities, especially since you can get 3.4-3.7% on a 5-year GIC as the top rate (just as good or better than opening up individual bank accounts).

Consider your executor, too, please! The banks will require probate on non-registered account values over $50,000 (they can require it on amounts below that value, but that's the typical value that the Branch Manager can authorize waiving of probate; at HSBC Bank Canada, the DVP could authorize up to $100,000 or something like that) and likely will have estate administration fees on registered & non-registered accounts at each institution. As they try and squeeze additional non-interest revenue, they may start enforcing expensive $15-25 per transaction fees for each debit to your accounts, too.

(As a personal aside: If I was your executor and had to deal with more than 3-4 financial institutions, I'd definitely take advantage of the maximum permissible executor fee that I legally could take as it would require significant legwork and expense on my part to administer. Just sayin'! )

Cheers,
Doug

Thanks, Londonguy, for your reply.

In that scenario, you make a good case for not charging an executor fee except that, even if you have multiple heirs, you likely only have one (1) executor. Assuming each heir had an equal share of the estate (or that portion of the estate not donated to charities), that executor has extra legwork (possibly significant extra legwork) and an estate administration fee could be one way to compensate for those extra efforts whilst maintaining the equal shares to the estate.

I would, however, take exception to your characterization of estate settlements being tax-free to beneficiaries. While true, the estate itself still has to settle its final tax bill, including any capital gains from deemed or real dispositions of such assets or from the final withdrawal from tax-deferred registered plans. So, ultimately, while not directly taxed, beneficiaries are beneficially paying the taxes owing by your estate.

As for me, I have no children and am having difficulty with who to name as an executor or even as beneficiaries, for that matter. I do technically not even have a will, despite my net worth being ~$250,000. I justify this by the fact that (a) most of my assets are held in registered accounts, with either my parents or my sister designated as beneficiaries and (b) of my non-registered assets, the asset values are such that probate would still be required even if I'd had a will. Dying without a will would see those assets transfer first to my parents and then to my children, assuming I remain unmarried (which is the plan). So, essentially, I'm paying to have a will done up when the provincial legislation largely says the same thing. That being said, with no beneficiaries, I would like to set up a perpetual charitable giving fund via some community foundation.

Cheers,
Doug

Londonguy, the way you have it set up makes sense - that's how my parents have it set up, such that if my dad predeceases my mom, she inherits everything. I think that makes the most sense. Each serves as executor for each other, though they have my dad's brother set as the executor because my sister and I were minors when the original was made. I've suggested a change to the contingent executor(s) to either me or my sister & I, but I guess it's not a substantial enough change to change the will just to change the contingent executor(s).

If the surviving spouse wants to provide a gift to your children before she passes away, she is, of course, more than welcome to do that, but I agree that you wouldn't want her to give up potentially 2/3 of the investment assets that have been set aside to provide her with sustaining retirement income.

As to "The Doug Foundation," I probably wouldn't establish my own independent foundation because of the added legal, trustee, and administrative costs. I'd probably just establish a restricted endowment fund with the Central Okanagan Foundation or Vancouver Foundation and then specify that the net income from investments, after all administrative and investment management fees, are to be distributed to my designated causes. Preserving land is important to me, so I'd probably also leave a similar fund with either of the Central Okanagan Land Trust, Nature Trust of B.C., or Southern Interior Land Trust.

Cheers,
Doug

P.S. At 35, I am probably a fair bit younger than you, so I've got time on my side to get this arranged.