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Email this7:09 pm
May 11, 2023
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@Bill. I love it...."order takers" a phrase from the past!
@AltaRed @Bill I agree with both of you and have begun to pursue joining up RBC to use the Dominion Securities GIC rates. I looked at BMO investor line rates and the quality just is not there. Those rates are really hard to find...BMO TD etc.
I have contacted 4 Dominion Securities agents.
First one wants a minimum of $500,000 wow eh. But did suggest after I pointed out that it may take me 5 years to move it all over....that they might be able to bring some over "in kind". But that still leaves me with the same problem. Also "first one" has a mandate of more money and less customers. My daughter works for one and every time he has a "party" he has an expectation of $x,xxx,xxx new business.
Second says the minimum is $250,000 and that confirms what I googled before hand. He is receptive to having less as it will take time to move matured funds over to him. I will ask about the "in kind" move.
Waiting to hear from #3 and #4.
After 5 emails to Oaken, they say I can move funds to HB from HT if it is a CDIC issue. I hope they see my issue and do it for me. But to be honest they are knuckle heads there!! .. like who knows (#&@&* They must just hire, based on the mirror test!! If I can do that my Oaken issues are handled. But will have to see what PT can do...likely not a lot as PB does not offer TFSA.
My wife would like to go back to Solguard (Manulife). The guy is good and trustworthy.....but I told her the rates are no good and we need to go for the rates!!
She now agrees.
Bill do you mind if I private message you??
7:20 pm
October 27, 2013
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I do not understand why you would want, or would need, a full service advisor to buy a GIC ladder. They will take 1-1.5% off the top (% of AUM) in fees. I would never go to the likes of Dominion Securities (or similar full service brokers) for that reason alone. If you can buy your own GIC at Hubert or Motive or Oaken, you can buy your own GICs at a DIY discount brokerage.
If you want to be with RBC, I would open a RBC Direct Investing account and buy whatever you want yourself. No advisor. No middleman. No human. No fees. The GIC yield advertised is what you receive. Account minimums are pretty small too, in the order of $15-25k or so.
Between my spouse and I, we have DIY accounts at Scotia iTrade, BMO Investorline and RBC Direct Investing. They all have comparable GIC offerings (beyond their in-house corporate offerings) with similar rates. Someone, perhaps Norman1, posted a screenshot recently of Scotia iTrade GIC rates.
7:51 pm
May 11, 2023
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AltaRed said
I do not understand why you would want, or would need, a full service advisor to buy a GIC ladder. They will take 1-1.5% off the top (% of AUM) in fees. I would never go to the likes of Dominion Securities (or similar full service brokers) for that reason alone. If you can buy your own GIC at Hubert or Motive or Oaken, you can buy your own GICs at a DIY discount brokerage.If you want to be with RBC, I would open a RBC Direct Investing account and buy whatever you want yourself. No advisor. No middleman. No human. No fees. The GIC yield advertised is what you receive. Account minimums are pretty small too, in the order of $15-25k or so.
Between my spouse and I, we have DIY accounts at Scotia iTrade, BMO Investorline and RBC Direct Investing. They all have comparable GIC offerings (beyond their in-house corporate offerings) with similar rates. Someone, perhaps Norman1, posted a screenshot recently of Scotia iTrade GIC rates.
Good point. I am listening!!!
I was with iTrade and customer service wise they were just as bad as Oaken. I was going through the paces. Our old Solguard adviser we paid zero and I paid zero for iTrade but only did TFSA at iTrade. Even though I am no longer there, I can still sign on to my account!!! Asking them to cancel was a useless as talking to a statue.
My thought was to either allow some in kind moves OR to start my own, like you suggest and then see if an RBC adviser could take it over. But if there are charges with an adviser for GIC's only....then no way!! And if the rates have extra point taken away as a commission...then no way!!
1. Can some one give me a URL to the direct buying?
2. Can I buy TFSA, RRIF, and Non Reg GIC's?
3. Any minimum amounts? (iTrade had $3000 and $5000 minimums). Or the usual minimum of $1000?
4. Does each account have an associated savings account?
5. Can I manipulate my RRIF GICs to be able to make more than the mandatory?
6. Can I set up TFSA and Non Reg GIC's to pay interest annually?
7. Do all GICS renew at maturity or can you have them go to the respective savings account?
8. Do they allow a master account so I can login and manage my account and my wife's (iTrade did).
9. Is there a minimum balance required that avoids any maintenance fees over both accounts?
10. Do they clearly pre identify what RRIF GIC or GIC's that they pick on for mandatory payment and do you know what the Principal and Interest amounts are that were taken?.
8:32 pm
April 6, 2013
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Pewter said
2. Can I buy TFSA, RRIF, and Non Reg GIC's?
5. Can I manipulate my RRIF GICs to be able to make more than the mandatory?
6. Can I set up TFSA and Non Reg GIC's to pay interest annually?
10. Do they clearly pre identify what RRIF GIC or GIC's that they pick on for mandatory payment and do you know what the Principal and Interest amounts are that were taken?
With full-services brokerage and discount brokerage accounts, there are no special TFSA, RRSP, or RRIF GIC's. The GIC's are all regular GIC's that are held in a TFSA, RRSP, or RRIF account. It is the holding account that is the TFSA, RRSP, or RRIF and not the GIC's themselves.
If one wishes to have the interest compounded, then one would order a compound interest GIC. If one wishes the have the interest paid into the cash balance of the account, then one would order a GIC that pays out interest annually.
Mandatory RRIF withdrawals in cash are taken from the cash balance of the RRIF account. One needs to manage the GIC maturities and GIC interest payments so that the cash balance of the account is enough for the withdrawals. There's no early removal of principal or accrued interest from unmatured GIC's held by the brokerage RRIF account.
8:41 pm
September 11, 2013
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Pewter, feel free to message me.
Similar to AltaRed I deal with the discount brokers at TD, RBC and CIBC as my main accounts. I've no experience with full-service brokers, always done it DIY with no advice, but AltaRed has already explained why that's not a good idea if you're just doing GICs. Not old enough to be at RRIF stage, not sure if I'll ever have one, so I've no idea of the mechanics of withdrawing minimum amounts, etc. but Norman1 has provided some comments on that.
8:57 pm
May 11, 2023
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Norman1 said
Pewter said
2. Can I buy TFSA, RRIF, and Non Reg GIC's?
5. Can I manipulate my RRIF GICs to be able to make more than the mandatory?
6. Can I set up TFSA and Non Reg GIC's to pay interest annually?
10. Do they clearly pre identify what RRIF GIC or GIC's that they pick on for mandatory payment and do you know what the Principal and Interest amounts are that were taken?With full-services brokerage and discount brokerage accounts, there are no special TFSA, RRSP, or RRIF GIC's. The GIC's are all regular GIC's that are held in a TFSA, RRSP, or RRIF account. It is the holding account that is the TFSA, RRSP, or RRIF and not the GIC's themselves.
If one wishes to have the interest compounded, then one would order a compound interest GIC. If one wishes the have the interest paid into the cash balance of the account, then one would order a GIC that pays out interest annually.
Mandatory RRIF withdrawals in cash are taken from the cash balance of the RRIF account. One needs to manage the GIC maturities and GIC interest payments so that the cash balance of the account is enough for the withdrawals. There's no early removal of principal or accrued interest from unmatured GIC's held by the brokerage RRIF account.
Yes I know all of that.
I deal with.
PT. And they have no RRIFs, and I have to call for annual interest payments and for GICs not to re invest at maturity.
So not all GICs in some of my experience are eligible for everything. Thus the questions that are still unanswered.
Hubert. I have to call for interest to be paid annually. Hubert has unique rules for RRIF withdrawals.
OAKEN, system wise, is best. But has their unique and changing rules for RRIF withdrawals. And I manipulate extra RRIF withdrawals by doing 1 and 2 thousand $ GICs. But they must be fully removed as they don’t have respective savings accounts.
Once again...sorry to say....no clear cut response to questions pertaining to Dominion Security GICs.
I am not new and uneducated with it all. Just trying to pre verify if this is the right way to go as it does make more sense than what I am doing. And I do have a daughter that is a senior admin for an advisor for the last 30 years that can help us if I/we age out on the interest of managing. 
4:16 am
September 11, 2013
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To give you an idea, I just checked TD DI GIC rate sheet and their 1-year GIC listing has 25 different CDIC covered issuers starting with 4 of them at 5.5% (TD family group, 3 offering monthly pay option at same rate), the next 4 (including Home Bank and EQ Bank) at 5.46%, and on down from there.
You can compare to rates at your FIs and decide if the convenience of a big bank brokerage is worth a closer look for you.
When a GIC matures it would just sit as cash in your registered account, you could buy into one of their ISAs, e.g. TDB8150, if you don't want to withdraw it right away and make some interest in the interim.
5:56 am
April 6, 2013
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That's comparable to the top two one-year rates from RBC Dominion Securities, Scotia iTRADE, and BMO InvestorLine:
| 1Y from RBC Dominon Securities | 1Y from Scotia iTRADE | ||
| 5.46% | Equitable Bank Home Trust Company |
5.46% | Concentra Bank Equitable Bank Home Trust Company |
| 5.45% | B2B Bank Laurentian Bank LBC Trust VersaBank |
5.45% | B2B Bank VersaBank |
| 1Y from BMO InvestorLine | |
| 5.46% | Bank of Montreal Bank of Montreal Mortgage Corp BMO Trust Concentra Bank Equitable Bank |
| 5.45% | Laurentian Bank |
7:03 am
October 27, 2013
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Norman1 said
That's comparable to the top two one-year rates from RBC Dominion Securities, Scotia iTRADE, and BMO InvestorLine:
For clarity for the OP, RBC Direct Investing is the discount brokerage entity and is the entity to be compared with Scotia iTrade and BMO Investorline. RBC Dominion Securities is the full service brokerage for which there will be advisory fees.
RBC Direct Investing will almost certainly have the same GICs being offered at Dominion Secuties at the same yields, with the differences being:
1) The investor buys the GICs directly in his/her accounts at RBC DI like at Oaken or EQ or Motive, whereas it is the advisor (middleman) that buys the GICs for the investor at RBC DS.
2) The middleman at RBC DS will charge a "% of AUM" fee to manage the RRIF and TFSA accounts, which reduces the return to the investor.
3) RBC DS accounts will have high minimums for an advisor to take on a client whereas RBC DI accounts have small minimums, e.g. $15-25k, to avoid account administration fees.
I would never advise anyone to involve a full service brokerage account just for buying/managing a RRIF or TFSA account of GICs and ISAs (Investment Savings Accounts). The management fees would be a brutal headwind on portfolio returns.
7:55 am
October 27, 2013
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Pewter said
Good point. I am listening!!!
I was with iTrade and customer service wise they were just as bad as Oaken. I was going through the paces. Our old Solguard adviser we paid zero and I paid zero for iTrade but only did TFSA at iTrade. Even though I am no longer there, I can still sign on to my account!!! Asking them to cancel was a useless as talking to a statue.
My thought was to either allow some in kind moves OR to start my own, like you suggest and then see if an RBC adviser could take it over. But if there are charges with an adviser for GIC's only....then no way!! And if the rates have extra point taken away as a commission...then no way!!
1. Can some one give me a URL to the direct buying?
2. Can I buy TFSA, RRIF, and Non Reg GIC's?
3. Any minimum amounts? (iTrade had $3000 and $5000 minimums). Or the usual minimum of $1000?
4. Does each account have an associated savings account?
5. Can I manipulate my RRIF GICs to be able to make more than the mandatory?
6. Can I set up TFSA and Non Reg GIC's to pay interest annually?
7. Do all GICS renew at maturity or can you have them go to the respective savings account?
8. Do they allow a master account so I can login and manage my account and my wife's (iTrade did).
9. Is there a minimum balance required that avoids any maintenance fees over both accounts?
10. Do they clearly pre identify what RRIF GIC or GIC's that they pick on for mandatory payment and do you know what the Principal and Interest amounts are that were taken?.
You have already been given a number of answers to your questions and I will try to avoid repeating completely, but will do so to some degree for completeness:
1. It is easy enough to google links to the bank discount brokerages. This is the link to RBC Direct Investing https://www.rbcdirectinvesting.com/ Ignore all the hype about investing, commissions, stock buying, etc, etc. as you have no interest in that. All you want is, for example, RRIF and/or TFSA and/or non-registered Cash accounts in which you will buy your GICs and ISAs (savings accounts).
2. As already mentioned, you do not buy RRIF, TFSA and non-reg GICs. You have RRIF, TFSA and Cash (non-registered) accounts in which you can buy any GIC or ISA that you wish from their list of offerings. The GIC list on offer is applicable to any of the 3 types of accounts.
3. The GIC minimums will generally be in the order of $1000, $3000, $3500, or $5000 because the broker is simply the agent for the issuer, e.g. Equitable Bank or Home Trust, GICs. The minimum amount of purchase depends on the brokerage and/or the issuer of the GIC. I know that RBC Direct Investing imposes a $3500 minimum for GICs in RRIF accounts (maybe TFSA as well) because my spouse has had to work with these minimums in her RRIF at RBC Direct Investing. My view of this is that there is no value in an investor opening accounts with a DIY discount brokerage if the investor is wishing to deal in small values of holdings. Stick with your retail banks and CUs.
4. As already said, you can purchase ISAs (Investment Savings Accounts) inside each of your RRIF, TFSA, and non-reg Cash accounts. Most of these have $1000 minimums to purchase as the initial amount with $100 minimum additional purchases thereafter. They are bought and sold as mutual funds but are actually not mutual funds, i.e. they are deposit savings accounts insured by CDIC. If you do not have enough cash in the account to buy ISAs, then the cash just sits in your RRIF, TFSA or non-reg accounts getting zero interest. The default ISAs for each of Scotia iTrade, BMO Investorline, TD Direct Investing and RBC Direct Investing are DYN6004, BMT104, TDB8150 and RBF2010 respectively as per https://mrthrifty.ca/investment-savings-accounts-maximize-interest-in-your-brokerage-account/
5. As already mentioned, you have to plan and invest your GIC ladder in the face values and maturities required to meet your RRIF minimum annual withdrawals, and/or to take more if desired each year. You cannot break a GIC. It matures when it matures at its face value plus interest. That is simply because the discount brokerage is not the issuer of these GICs. They are simply the agents for the actual issuers like Equitable Bank or B2B Bank. Don't go this route with a discount brokerage if you do not want to manage your GIC ladder with the discipline required to do so. Most of us would use a combination of GICs and ISAs to manage a RRIF withdrawal plan.
6. As already said, when you purchase a GIC in a discount brokerage, it is you that decides whether the GIC you buy pays annual interest, or is compounded to maturity. It is part of the buying process.
7. GICs do not renew at maturity. The proceeds sit as cash in your RRIF, TFSA or non-reg account as appropriate. If you want to proceeds to earn interest, you would buy the appropriate ISA in that account to earn interest on that cash. For example, at RBC Direct Investing, you have a GIC that matures with proceeds of $10123.45. You purchase 1012 full units of RBF2010 @ $10 to get interest on $10120. The remaining $3.45 sits in your account gaining no interest. Scotia iTrade and BMO Investorline are a bit different in that their ISA units are priced at $1, so you could buy 10123 units @ $1 there. I believe you can buy only whole units, not fractional units but I am not certain. I've never tried to purchase fractional units.
8. As already explained, each of RRIF, TFSA and Cash non-registered accounts are the master accounts in which you purchase holdings of GICs, ISAs, etc. All of these accounts will show on the home page of one login credential. In my case at Scotia, each of my bank accounts, each of my credit card accounts, each of my loan accounts (if I had any) and each of my Scotia iTrade brokerage accounts show on my home page. You will not be able to see your wife's accounts unless she has completed Trading Authority forms to allow you to 'trade' in her accounts.
9. Each account type will have minimums to avoid account administration fees. They vary by discount brokerage and account type. You will have to check yourself for the brokerage you have interest in. I am guessing they will be in the $15-25k minimum each... OR combined $15-25k minimum across all brokerage accounts per family (normally the latter). This is a question you would have to ask a person at the brokerage of interest.
10. As already mentioned, the brokerage manages nothing for your RRIF minimum withdrawals. It is up to you to have the cash available for withdrawal, either from a maturing GIC or in combination with cash in your ISA. Remember that DIY discount brokerages are simply 'order takers'. They do not manage your accounts other than ensuring you take your RRIF minimum annual withdrawals. They will warn you about your responsibility to do that if you do not act and I have heard that they will arbitrarily sell something at their own decision to meet the withdrawal if you do not do so on your own. You do not want to let it come to that.
10A. You made another comment about transferring in GICs, e.g. RRIF GICs, from another institution into RRIF accounts at a discount brokerage. That may, or may not be possible. You will need to check with the actual discount brokerage which GICs they will accept as a staight-in transfer and which ones you will have to leave to mature in your original institution before transferring the cash over. The reason is that not all brokerages have relationships with all GIC issuers and will not accept the transfer. It is pretty certain that no discount brokerage will accept transfer-ins of GICs from non-CDIC insured institutions, such as CUs.
in summary, if you move to a discount brokerage, you are on your own for making and managing your investments and your accounts. There is no hand holding and there are purchase minimums for GICs and ISAs, all of which are CDIC insured to CDIC $100k limits. The whole point of a DIY discount brokerage is to Do-It-Yourself without interaction with humans....though there are humans available to answer questions.
Discount brokerages are not for everyone, especially those who are not prepared to take full responsibility for managing their portfolios. They are designed to be 'no fee' (or minimum fee) alternatives to full service advisory firms who charge "% of AUM" fees to manage accounts, or who charge commissions to buy/sell products.
9:01 am
May 11, 2023
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Thanks, everyone for your input.
9:07 am
November 21, 2015
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AltaRed, thank you for you detailed answer to Pewter.
9:48 am
April 6, 2013
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AltaRed said
7. … For example, at RBC Direct Investing, you have a GIC that matures with proceeds of $10123.45. You purchase 1012 full units of RBF2010 @ $10 to get interest on $10120. The remaining $3.45 sits in your account gaining no interest. Scotia iTrade and BMO Investorline are a bit different in that their ISA units are priced at $1, so you could buy 10123 units @ $1 there. I believe you can buy only whole units, not fractional units but I am not certain. I've never tried to purchase fractional units.
Scotia iTRADE and BMO InvestorLine do support fractional units indirectly by accepting the buy orders by dollar amount (like $123.45) as well as by number of units.
10:01 am
October 27, 2013
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Norman1 said
Scotia iTRADE and BMO InvestorLine do support fractional units indirectly by accepting the buy orders by dollar amount (like $123.45) as well as by number of units.
Thank you. Good to know though I've never been inclined to work with decimal points. RBC DI and TD DI might be the same with their $10 units since one can buy in either units or in $$.
1:42 pm
February 1, 2016
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AltaRed August 9, 2023 9:39 pm
At the risk of bringing this discussion up yet again, another option (to unlimited deposit insurance coverage in some provinces with CU offerings) is to hold the RRIFs et al at one of the major big bank discount brokerages which are the agents (brokers) for perhaps 15-25 separate GIC issuers, each of which is CDIC insured.
True one would not get the best return from all of the GIC issuers on a brokerage's list but perhaps at least half of them have competitive rates, PLUS when a GIC matures, one then has some flexibility to look down that list for the best competitive offering that doesn't put one over CDIC limits. If 15 out of 25 offerings provide competitive rates, that is up to $1.5M of coverage spread across 15 issuers. What becomes more important? Ease of management or slightly less interest return?
Additionally, one is only having to deal with one entity for a single POA document and a single Successor Annuitant document. I think people keep overlooking the simplicity and ease of use of discount brokerages from say one of the big 6 (or at least Scotia iTrade, BMO Investorline, TD Direct Investing and RBC Direct Investing that I am most familiar with).
Pewter August 10, 2023 10:57 am
……. Good idea, get a broker and put my registered investments there. I need to re look at that. Any suggestions of actual use of one?
Pewter August 11, 2023 10:51 pm
Good point. I am listening!!! …….
1. Can someone give me a URL to the direct buying?
2. Can I buy TFSA, RRIF, and Non-Reg GIC's?
3. Any minimum amounts? (iTrade had $3000 and $5000 minimums). Or the usual minimum of $1000?
4. Does each account have an associated savings account?
5. Can I manipulate my RRIF GICs to be able to make take more than the mandatory?
6. Can I set up TFSA and Non-Reg GIC's to pay interest annually?
7. Do all GICS renew at maturity or can you have them go to the respective savings account?
8. Do they allow a master account so I can login and manage my account and my wife's (iTrade did).
9. Is there a minimum balance required that avoids any maintenance fees over both accounts?
10. Do they clearly pre identify what RRIF GIC or GIC's that they pick on for mandatory payment and do you know what the Principal and Interest amounts are that were taken?
You have received excellent responses to your questions. I will add a couple of comments to AltaRed’s detailed response:
AltaRed August 12, 2023 10:55 am
…
1. It is easy enough to google links to the bank discount brokerages. This is the link to RBC Direct Investing https://www.rbcdirectinvesting.com/.
Added info:
Here is the link to BMO Investorline GIC rates:
https://www.bmoinvestorline.com/ILClientWeb/marketing/marketingGICRates.htm
7. …. I believe you can buy only whole units, not fractional units but I am not certain. I've never tried to purchase fractional units.
Added info:
I am buying fractional shares in BMOIL ISA accounts BMT104 and BMT109. IL makes an internal transaction of one share ($1) and breaks it into thousandths to provide the fractional component of the purchase. This way I can totally deplete my trading account (zero interest) and place all available cash in ISA (currently 4.85%). It works well.
I will repeat AltaRed’s, and other warnings that you do not want to utilize a full-service broker for what you are trying to achieve. There are several DIY brokers available that can fulfill your needs.
I have been going through the process of transferring our RIF accounts over to BMO Investorline from Achieva Financial. It has not gone as smoothly as I would like but we are making progress. I hope you all will permit me to tell my story that is intended to provide information on the difficulties of dealing with RIF funds:
About this time last year (2022) I made the decision to embark on a different way of laddering GIC investments. I call it our 'Horizontal Ladder Project'. We are too old to be investing 5-years into the future so I undertook to buy a 1-year and 2-year GIC each month for a year beginning last September. We were willing to forgo the higher interest rates of the 3, 4, and 5 year investments. Who knew at that time that an inversion of these rate schedules was about to happen that would make the 1- and 2-year rates the highest rates? We benefited from that but it was pure luck.
In July, we were two months away from completing the Project. We were left to utilize RIF money for the July and August GIC purchases. Our RIFs mostly resided at Achieva Financial over the years. We had occasional forays into Oaken Financial but suffered the same problem as others have documented – no HISA accounts for registered money. I have a soft spot for Achieva Financial – our first foray into online banking. They have been excellent to deal with, no problems at all. At one time they were among the top quartile of interest rates being offered. Unfortunately, they have not kept up with increases from other FIs and are now in the bottom quartile of FIs I track. Reluctantly, I made the decision to move our RIFs to BMO Investorline, where, thanks to very useful information from contributors like Norman1 and AltaRed, I was previously enlightened to the ISA benefits available from an Investorline account we already had.
In early July I began the process of setting up RIF accounts for me and my spouse. This required the exchange of paperwork with signatures. This was handled by secure messaging within our IL account. One of the requirements to get my spouse’s account to be included onto our joint trading account was to set me up as a trading agent for her account. That got done and all forms were delivered to IL on July 19. The IL CSR I was working with (I have reason to believe was working from home) prompted me to complete transfer forms to begin the process of transferring in the RIFs. I advised I wanted to wait until accrued interest for July had been paid out at the end of the month. The CSR advised that the form provided for a designated date for the transfer to take place. In fact, the form says “This transfer takes place: (yyyy/mm/dd)”. I liked the idea of getting a start on the transfer process so I submitted the requests using August 1, 2023 as the transfer date. These requests were available to IL July 20, 2023. I sat back and waited for the transfers to begin. The RIF accounts showed up along with our joint IL trading account with no cash since the transfers were still outstanding.
Come August 2nd and our accounts showed no transaction in the RIF accounts. I made an inquiry to the customer service line at IL and was advised that IL interpreted the transfer date I provided as the date they would 'start' the transfer process. Further, it was advised it could take 21 days to complete the transfers. I was told the transfer requests had gone out to Achieva on July 31. On August 4 I checked my Achieva account and found that my RIF account had just completely disappeared. No record of any transfer or any other data. I called Achieva and was advised that since we moved the whole account to IL they mailed a cheque to IL and removed the account. I was advised my statement at the end of August would detail the transfer data. Further I was advised that my spouse’s account was still showing since they received no request to transfer those funds.
Now I had to endure a 3-day holiday weekend waiting to find out the status of the transfers. On August 8, I contacted IL again and was now told it would take 16 days to complete the transfers. I enquired as to the status of the transfer of my spouse’s account. It appears they did not process the original request. That transfer was put into action and by Aug10 my spouse’s RIF account disappeared from the Achieva RIF account. This is the only indication we have that action has been taken.
In the early morning hours of August 10, I was relieved to find that the full value of my RIF account now resided in my IL RIF trading account. In addition, some interest had been added to the balance indicating that the funds did not get transferred on August 1. I immediately set about to buy a 1-yr GIC and a 2-yr GIC. Adding insult to injury, the rates for these GICs dropped from 5.49% and 5.45% respectively to 5.46% and 5.42% while I waited for the money to arrive. I moved the remaining cash in the trading account to BMT104 (4.85%). All investments are dated August 10. We were late with our July GIC purchases but they are now active.
But still no RIF money for my spouse has arrived at IL while we sit through another weekend. When it does arrive, I will do much the same thing as with my account. Buy 2 GICs – 1-year and 2-year to complete our Horizontal Ladder Project.
Many days have passed with no interest earned – which was not supposed to happen. C’est la vie. We are now back to the vagaries of big banks. We got so used to the nimbleness of online FI’s where we could move money in one day, two at the most. RIF money is an exception and I wish we could eliminate these accounts sooner. We are working on it.
Once the foul taste of this bungled transaction passes, I still think we will be better off consolidating our funds in this manner. I have similar plans to move our TFSA accounts to IL in December.
This won’t help the original poster but I have taken no consideration to work within CDIC limits for these accounts. I can’t believe any of the big 5 banks are in any danger of defaulting. Your comfort level will, no doubt, vary from this practice.
AltaRed has outlined procedures to spread the investments around to maintain account limits to be covered by CDIC.
Sorry for the long post. I hope it has been of some use to learn more about broker accounts.
2:38 pm
October 27, 2013
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Well articulated story. Transfers to (and between) brokerage accounts always take awhile. It is the nature of the beast and one simply needs to accept there is 'dead money' in the interim. One month for registered accounts in particular is not unusual.
8:07 pm
October 21, 2013
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Posts 50 through 56 illustrate better than I could why it is so much easier to just put the funds in a fully insured CU ladder.
I understand the attraction of the big bank brokerages. One suspects or believes one will do better in terms of returns over time and believes the hassles will be worth it; and one is confident that one's mental capacity will continue until there is a clean line between being fully competent and not, so that a reliable POA, if there is one, can step in. I can say from experience that it doesn't always work out this way, no matter how carefully you set things up today, but you are certainly entitled to your own interpretations.
As AltaRed said, there is always a delay in transferring an RIF account, and these are often longer when dealing with a brokerage. I think rodeworthy's was actually timely compared to some. In my experience, the longest delays are with transferring a registered account OUT of a brokerage. Spouse's took several months and many phone calls, with funds coming from TDDI. It was so bad that they eventually agreed not to charge us their $150 transfer fee, but of course the several months of interest were lost.
I don't get the feeling my advice is wanted at this stage, but I'll say it anyway for anyone who is listening in:
Don't assume that the GIC rates and ISA rates available through brokerages in comparison to other FIs are here to stay. This development is relatively recent and in my view will not likely last when rates generally go down again. Spouse has had money in TD8150 for several years but only for convenience as we could have done better elsewhere, outside of the account, for most of that time.
Do remember that when you transfer RIF funds from one FI to another, the originating FI will first remove that year's mandatory withdrawal, no matter what the usual date is set for; this is required by law.
It is not necessary to set up a non-registered trading account to receive mandatory withdrawals. You can set up a regular bank account at the same bank and have it sent there, assuming you have an account that has no fees. Many of us still have free accounts but these are becoming harder to get at the big banks.
I believe OP intends to continue to take out lump sums from RIF, beyond mandatory withdrawal. Anyone who is thinking of doing this should check with the brokerage before they start, to see if there will be a withdrawal fee for this. There will not be a withdrawal fee for the mandatory amount but discretionary amounts may incur a fee. A withdrawal fee from brokerage account is usually about $150 incl tax and is likely to increase. I have never asked this particular question, but it's worth asking.
7:13 am
October 27, 2013
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Loonie said
I believe OP intends to continue to take out lump sums from RIF, beyond mandatory withdrawal. Anyone who is thinking of doing this should check with the brokerage before they start, to see if there will be a withdrawal fee for this. There will not be a withdrawal fee for the mandatory amount but discretionary amounts may incur a fee. A withdrawal fee from brokerage account is usually about $150 incl tax and is likely to increase. I have never asked this particular question, but it's worth asking.
The $150 you speak of is a 'transfer out' of the account in whole or in part to, for example, another brokerage, not cash withdrawals from an account to a bank account of some kind, or in-kind transfers between accounts. The commission and fee schedule that is published for anyone to see is generally highly transparent on what fees are charged.
It goes without saying that anyone who is contemplating a brokerage account, or any investment account with any entity, should be examining the 'commission and fee' schedule before they commit in any event AND verify with the brokerage any specific concern they may have. Surely no one makes a commitment to any financial institution without a thorough examination of its fee schedule first.
I do agree with Loonie that yields of ISAs have not always been attractive. They are very much tied to central bank interest rates and that of commercial paper et al, similar to the performance of money market mutual funds. They have been used historically to hold extraneous amounts of cash, ready for re-investment, or in the special case of a RRIF, as a hold before annual withdrawals, not as an investment per se. By definition, an ISA is an Investment Savings Account. It is simply a place to hold cash pending a decision to use the cash for something else. As an example, I normally have no amounts of an ISA in my RRIF but I do at the moment because a GIC matured last month and I am holding the portion of what I need to fund this year's RRIF withdrawal in that ISA until I withdraw it to a bank account. That holding will disappear in its entirety once the annual withdrawal is made.
In the case of a non-registered account, one would only hold funds in an ISA if one was simply holding it for re-investment, or in the case of the past year in particular, for the better returns the ISA provides over any HISA in the digital bank and CU market. Two years ago when BoC interest rates were low, all my non-reg cash was in a few digital banks listed on the HISA chart of this website. For the past year, it has all been in a non-reg brokerage account making 4.85-5%.
Added later: ISA yields will track back down as and when BoC reduces its interest rates. The effect up (and down) of ISA rates tracks moves by BoC fairly quickly (like they do for 'flow through' trusts of money market mutual funds and Cash ETFs).
8:58 am
September 11, 2013
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True about ISAs but brokerage GIC rates are different, they're always competitive.
With brokerage accounts I don't worry about account transfer, etc hassles, I'm using the same accounts for decades because I have access to whatever I want to hold in them, no need to ever close them out. Way easier than all the stories on here about hassles with moving accounts between digital banks & CUs.
9:22 am
October 27, 2013
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Bill said
With brokerage accounts I don't worry about account transfer, etc hassles, I'm using the same accounts for decades because I have access to whatever I want to hold in them, no need to ever close them out. Way easier than all the stories on here about hassles with moving accounts between digital banks & CUs.
Our views are because we have enjoyed the advantage of such 'singular' accounts over long periods of time and are familiar with the operation of such accounts. Brokerage accounts are almost a mirror image of the complications and hoops people on this site go through with FI hopping, or how banks and CUs bastardize and complicate 'accounts' on their platforms (a separate account for every holding such as a GIC it seems).
Execution and operating processes between the two vehicles are very different and take some effort to learn. Neither is necessarily wrong for any particular individual but they sure are different.
Please write your comments in the forum.