Where can one invest a LIRA in GIC's? | GIC discussions | Discussion forum

According to their registered accounts application form, Scotia iTRADE offers LRSP, LIRA, RLSP, LIF, LRIF, PRRIF, and RLIF accounts.

I would imagine most discount brokerages do. I am also aware RBC DI and BMO IL do in addition to Scotia iTrade.

Added: To respond to post #4, most of the brokerages will have same/similar rates for GIC offerings. After all, it is the issuer of the GIC, e.g. Equitable Bank, that sets the rates, not the brokerages.

Added2: I don't think rates (yield) should be priority when positioning a registered account like a LIRA. The priority should be flexibility of offerings that a discount brokerage provides. If you go with FI A right now because of decent GIC rates, what are you going to do when that FI is no longer competitive? Stay the course because you are trapped? Or have the flexibility to be able to buy just about anything you want from a discount brokerage? Personally, I would never have a registered account like a RRIF or a LIRA/LIF with any of the FIs on the list in this forum. Your neck is in that noose.

I was not necessarily suggesting the OP get more adventuresome (take more risk) with security types. Only that, in my opinion, flexibility in offerings far outweighs the hangman's noose' of a single FI.

The OP already knows from his/her CIBC IE trading account what GIC offerings exist there. The rates are not bad at all. Perhaps 20bp less than a few of the ones on the GIC chart here but that is a small price to pay to avoid the risks/penalties of 'reaching for yield'. I wouldn't restrict myself a single FI for a nanosecond.

Loonie said
It depends too on the size of your account. Ultimately LIFs and RIFs wind down, with mandatory withdrawals, to a point where investment accounts charge an annual maintenance fee, and you are powerless to add any funds to offset this. At that point, you must either cash out (increasing your income significantly that year), pay the fee annually, or transfer out. So it is not a permanent solution.

It may be alarmist to think of alternatives as a hangman's noose. As far as I know, nobody on this forum has ever ost a penny in an insured GIC in Canada. Investment account holders often speak glowingly about long term returns, so I think it's fair to look at GICs in same light. And 100 bps per 100K over 20 year retirement is likely to be a substantial amount.  

The opportunities for a range of 15-20 GIC issuers at a discount brokerage provides flexibility that being stuck with a single FI does not provide short of transferring out. That has real value, but of course, it depends on what one's priorities are of course. For me, confined to one FI with a registered account that becomes non-competitive would be a hangman's noose.

I agree one will have to watch for account minimums as the LIF/RIF balances get low. Most brokerages though allow one to aggregate household balances across all accounts. Chances are if one has a RIF in a brokerage account, they also have other brokerage accounts (non-registered, TFSA, etc).

That all said, the OP already has a CIBC IE brokerage account and is looking elsewhere for GICs with a higher yield. S/he has already made that decision to look outside his/her brokerage.

I do have 2 residual GICs which are yet to mature (spouse has more) but you are right. I will soon be out of them. BTW, the spread between brokerage GIC rates and the rates on the GIC chart here are not 100bp at the brokerages I deal with. Right now at Scotia iTrade, best rates are:

1 yr - 4.88%
2 yr - 4.75%
3 yr - 4.65%
4 yr - 4.4%
5 yr - 4.42%

The spreads have been 35-50bp over the last 10 years or so.

From BMO InvestorLine:

It looks like CIBC Investor's Edge is not the best for people interested in GIC's.

NCC1701Z said
Reserving about 3 years in fixed income in the LIF should alleviate most volatility issues.

The annuity is tempting but I can't seem to get past the lack of an estate value and I don't think we'll be living into our 90's to get a decent return. The LIF is only a portion of our funds and with the low withdrawal restrictions it's a good candidate to annuitize.

Plus 1/2 the LIF will likely go to taxes so that's another compelling reason  

I think you have correctly understood the trade-off with annuities. They provide insurance against something you don't think is going to happen, but you know you could be wrong. Maybe ask your doctor for an educated guess, given lifestyle and genetic factors. My mum has been thinking she wouldn't last much longer since she was about 85 or so. She'll be 102 in a few weeks and could easily last another few or several years. Her parents were about 80.

It's like any kind of insurance. You don't think you'll die young, but you buy life insurance to protect your family in case you do; you don't think your house will be burglarized or destroyed, but you buy property insurance in case it does, etc etc.

Yes, if you die as soon as you seem to imagine, the tax on remaining LIF will be substantial. Same for any RIF funds.

LIFs are worse than RIFs as there is so little flexibility. And RIFs are bad enough!; indeed, you might as well buy an LIF annuity, and I think that is actually what they want you to effectively do by boxing you in. I hate being put in a strait jacket like that.

The rates quoted above don't look too bad if indeed they are available for LIFs. Personally, I am skeptical they will remain competitive as they have not been when I've looked in the past and even the differences cited by AltaRed can add up.. You might ask a deposit broker if they sell LIF GICs. I doubt they do, but it will help you cover your bases to ask. If they do, it could be your best bet.