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From the perspective of an Ontarian, I would agree with Briguy's priority list.
I don't understand though, why he wants his RSP money to stay in Hubert if he thinks it's in the fourth category.

Doug said

Your deposit insurance strategy is reasonable, but small point of clarification: there's no difference in Motive Financial, part of Canadian Western Bank, from a Motus Bank or Alterna Bank from a deposit insurance perspective. There may from a dual probate perspective, but this is untested. A duly constituted and probated will in one province should be valid and accepted by other banks and credit unions. At HSBC, in one instance, we accepted the will probated in Ontario for an HSBC customer with the estate trustee being based in British Columbia (he had to be approved as the estate trustee by the Ontario court since the named executor had predeceased the client, or perhaps died shortly after the client died). Nevertheless, if you want to be extra cautious, I guess you could rank Motive Financial 2nd or 3rd, but not on the basis of deposit insurance.

At this point, I'm waiting to hear back from Motus Bank if they manually or automatically post direct deposits and pre-authorized debits. If manually posted, that would likely explain the 3-4 day delay in posting such transactions that 1-2 forum users/Motus customers have reported. It would also mean they could reject PADs on a savings account. If it turns out that's the case, then I would just say that's a #majorfail on the part of Motus and they would not be getting my business. I would be looking at Alterna Bank as a potential new primary bank to replace Coast Capital next year, if they don't get their act together and make Interac e-Transfers free & bring in bank-to-bank transfers, or possibly Motive Financial before I'd select Motus (despite Motus' nice Sweep feature).

Cheers,
Doug  

I gave less priority to Motive because it's outside Ontario.

I don't understand why you would reject Motus just because they don't allow preauthorized debits (PAD) from their HISA. They have that Sweep feature so you can keep all your money in your HISA besides a small amount in the chequing account to cover cheques , so you can continue to keep most of your money in HISA and write cheques and do PAD from the chequing account.

Briguy said

I don't think there any Ontario credit unions that have consistently good GIC or HISA rates if they don't have specials. And since I want to stick with one FI, and have over 100K in my RRSP, I don't want to use a small bank like Alterna Bank which only has CDIC coverage to 100K. Alterna has slightly lower interest rates as well.

So, credit union wise, I like Hubert the best of all the Manitoba credit unions for their extremely easy link up of accounts, excellent customer service, excellent interest rates. And of course they have unlimited guarantee by that Manitoba self funded by credit union corporation. Other members here have emailed them and they have said they will accept Ontario probate and mailed in certified death certificates and registered wills, and they will allow increased withdrawals of RRIFs more than originally arranged. They also have that quarterly cashable 1 yr GIC which I like, except in their RRIF. And, they gave me a little fob with fake coins to put into grocery carts ( just kidding about this last one ).  

Point of clarification: Motus Bank is an even smaller bank than Alterna Bank. They're a subsidiary of Meridian Credit Union, but that doesn't matter in terms of CDIC insurance. They have the same CDIC insurance as Motus Bank.

Also, Alterna Bank, on its own, is almost half the size (by assets) as Sunova Credit Union, and more than three times the size of Hubert Financial (estimated, since Sunova doesn't break out their deposits by branch) in terms of deposits.

I like Hubert, too, and my parents got those fake coins for grocery shopping carts. When I joined, I got a nice Hubert mousepad. 😉

Cheers,
Doug

Briguy said

I just tried pulling 0.32 from my Meridian savings account using my Hubert account since I had previously linked the accounts up, so if my Hubert account gets the 32 cents we'll know that PAD works on Meridian's savings account. I don't have a Motus account to test it on. ( You previously mentioned Meridian doesn't allow PAD on savings ).  

Oh, if I said that, that's not what I meant. What I meant was someone else on these forums said that PADs and direct deposits took 3-4 business days to post to/from a Meridian or Motus account (if it wasn't you that said that, sorry; can't remember who it was).

Nonetheless, it will be good to know how long it takes Meridian to post the debit to your savings account. I remember distinctly from when I first opened my Hubert accounts in 2011 that Hubert checks twice a day for inbound/outbound transfer requests - once at ~7:30 am Pacific time (~10:30 am Eastern time) and once at ~2:30 pm Pacific time (~5:30 pm Eastern time). You likely missed the 5:30 pm Eastern time, so that will go out out in Hubert's EFT debit batch at 7:30 am Monday morning. If Meridian takes till Thursday or Friday to post that to your Meridian account, we'll know they either have really antiquated back-office processes and/or are manually posting them. If Meridian posts the debit later Monday afternoon/evening or, worse case, by next day, we'll know they're in line with the industry.

Thanks, Briguy!

Cheers,
Doug

Briguy said

I don't think there any Ontario credit unions that have consistently good GIC or HISA rates if they don't have specials. And since I want to stick with one FI, and have over 100K in my RRSP, I don't want to use a small bank like Alterna Bank which only has CDIC coverage to 100K. Alterna has slightly lower interest rates as well.

So, credit union wise, I like Hubert the best of all the Manitoba credit unions for their extremely easy link up of accounts, excellent customer service, excellent interest rates. And of course they have unlimited guarantee by that Manitoba self funded by credit union corporation. Other members here have emailed them and they have said they will accept Ontario probate and mailed in certified death certificates and registered wills, and they will allow increased withdrawals of RRIFs more than originally arranged. They also have that quarterly cashable 1 yr GIC which I like, except in their RRIF. And, they gave me a little fob with fake coins to put into grocery carts ( just kidding about this last one ).  

The fobs are great, but, no chocolate, alas! (Oaken gives chocolate.)

I see what you're saying. That was basically my reasoning, initially, for consolidating at Hubert for RIFs. I was all set on it until a few months ago when it dawned on me that they wouldn't offer the one-year GICs. Can't get a consistently good rate in Ontario except maybe Oaken but no savings account there. With Oaken, though, you can get 200K coverage, if that helps.

We'll see how Motus pans out. I am cautiously hopeful that it may provide a consistently decent rate. It will do for the amounts I am currently needing to move. I've been aggressively whittling down my RSP/RIFs for tax purposes. One convenience about RIFs is that they do gradually get smaller, at least with the interest rates we've had for the last 10 years or so and the foreseeable future. so that you may need fewer FIs to put them in as time marches on.
Hubert makes reasonable sense, given the paucity of good alternatives, especially as you are still in RSPs. It's either that or break them down into smaller lumps and do some rate-hopping.

Doug said

Oh geez, it sounds like had Oaken offered a HISA in a RRIF, even one with a slightly lower rate than the RSP/TFSA/non-registered HISA, you'd have actually used Oaken for your RRIF. So between Hubert and Oaken, they both check all the boxes in terms of excellent customer service, great rates, good features and detail in online banking and e-Statements, but they each fall crucially short in different ways. In Hubert's case, they lack a 1-year GIC (even a quarterly GIC). In Oaken's, they've got that 1-year GIC, but lack a HISA for the RRIF.

Have you tried suggesting to Oaken to see if they'd be more responsive to opening a HISA in a RRIF, even a non-interest or low-interest bearing account whereby funds could sit temporarily awaiting your GIC reinvestment and/or withdrawal decisions?

Motus seems like a good choice, but I'd wait to see how long their bank-to-bank transfers take from Briguy's "test." I know you want to minimize the number of FIs you deal with. Do you have accounts with Alterna and/or Motive Financial? Either of those have top-tier savings account rates and GIC rates that beat, in many terms at least, Oaken and EQ Bank.

Cheers,
Doug  

One key reason to have RRSP and RRIF in one FI is to avoid confusion about mandated withdrawal rates. If you are going to be withdrawing from your RRIF at high rates then it's no big deal to have them at more than one FI. But then you are going to be paying a lot of tax.
Here's my strategy that I envision assuming I don't have a huge RRSP and I have a lot of non registered savings:
eg. I'm 75 years old, and have to withdraw 5.82% in 2019 from my 250,000 dollar RRIF, that is 14,550 dollars. If I consume 50,000 dollars in yearly living expenses and earn 7000 dollars a year from OAS and 12000 dollars a year from CPP = income of 19000 dollars a year, it would make sense to take 31,000 instead of 14,550 from my RRIF since I will still be in the 20% tax bracket. I would then contribute another 6000 from my non registered savings for the yearly TFSA. So I would use up my RRIF in about 8 years, but have an additional 36,000 in a TFSA and quite a bit of money still left in my non registered savings. I can also have net income of about 75,000 a year before I get OAS clawback, so 50,000 is well within that range.

Loonie said
Yes, it's true that Oaken or Hubert would have been my choices above motus, most likely, if they were not lacking key ingredients. I would most likely have stuck with Oaken , as it's based in Ontario, and secondarily Hubert for 100K+.

I didn't specifically try to get Oaken to offer RIF HISA, but they have been very clear that they are not going to offer it. If they don't know by now that this is an issue, then they are not reading this forum. Perhaps it will become clearer if they lose enough deposits. They haven't been around all that long, so five yr GICs have not been coming due for too long yet. If at a later date they realize the error of their ways and do introduce RIF HISAs, then I would consider moving back to them, especialy since they can offer 200K insurance.

Thanks, Loonie. Yeah, between them and EQ Bank likely to offer Equitable Trust as a separate CDIC issuer, that's a definite plus. I kind of have a new love for Oaken over EQ Bank, though, because they're scrappy and a fighter. Despite a liquidity crisis brought on by a lack of credit quality controls with mortgage brokers, they've fixed those problems and are growing deposits again.

I'm actually in the process of finalizing an Excel spreadsheet that compares the 2018 and 2017 deposit bases of the Manitoba CUs with virtual banking divisions and the various mid-sized virtual banks, so you'll be able to easily see their deposit growth.

Separately, what about if an FI has branches in other provinces, would that affect, in your view, the potential for dual probate being required or no? If not, then it doesn't really affect me (or you) if choosing a CDIC member issuer that has a branch/office in our province of residence. Otherwise, on that basis, for GICs, I really should be choosing Peoples Trust Company since their head office is in Vancouver. That doesn't leave me a lot of options for day-to-day banking, though, as their aren't too many B.C.-based banks that offer consumer banking services (HSBC being the only other one and now Coast Capital Savings, as they're a federal credit union).

However, like Briguy, I am on a path to dump the RIFs as soon as feasible tax-wise, so I might not need them by then.

I agree with Briguy's basic strategy. Find the income threshold and bracket below which you will never fall, and stay within it but maximize it by taking additional RIF withdrawals. Depending where you are within that bracket, you will be able to take out more or less money at no extra cost and save your estate from a whopping bill. Also, you will then know how much money you really have, which is always uncertain until you've dumped the RIFs.
The only additional caveat I have is to remember to consider that in doing so you will lose on the age credit every year that you are doing it - and that starts around 38K. This is not a big deal, and it's still probably worth doing, but should be remembered.
You will also reduce the likelihood that you can benefit from the Medical Expenses credit. However, all of this gets compensated for if you live long enough to enjoy enough years after which you have gotten rid of your RIFs. You will have less taxable income at that point, and you will know what you have, and there will not be tax liabilities for your estate. Consider putting the proceeds into a joint account to avoid probate tax.  

Yeah, I was actually going to ask you if it makes sense to take more the minimum of a RRIF (even in-kind, with a portion withdrawn in cash to cover the income tax payable, if in equities/bonds or even in GICs). It sounds like that's a sound strategy. Less of a tax bill for your estate. Speaking of which, have you ever transferred an unmatured GIC out of a RRIF, along with savings to cover the withholding tax payable) in-kind such that it continues as a non-registered GIC (assuming the issuer offers the same rates on non-registered versus registered GICs, of course)? And, if so, are most issuers accommodating in this respect? It would be staying with the same FI, so one would expect they would be.

Cheers,
Doug

Loonie said
No, I've never had cause to do the latter.

I don't really understand your question about FIs that have branches in other provinces. It's not an issue I've dealt with.  

Well, you refer to preferring Motus Bank for probate purposes because their head office is based in Ontario. Does it need to be where their head office is located or wouldn't having branches/offices in another province mean that dual probate would not be required? I would think branches/offices would be fine because otherwise that would mean a host of western Canadians would need to have their wills probated in their home province and in Ontario, Quebec, or Nova Scotia, if they dealt with one of the "Big 5" banks whose head offices are based in those provinces.

Cheers,
Doug

Thanks for the follow-up, Briguy. I wouldn't worry just yet - that's a normal turnaround time for the receiving institution to post the CR or DR on the next business day. Hubert would've sent out the DR request to Meridian in their 7:30 am Pacific (10:30 am Eastern) EFT batch this morning. If Meridian has a normalized (and automatic) EFT posting schedule, the DR should show up on your Meridian account by tomorrow morning, ideally, or, worse case, tomorrow night (end of business day). If Meridian takes until Wednesday, Thursday, or Friday, then the earlier posters to this forum were correct and, indeed, Meridian has antiquated processes in play. (That would also be a dealbreaker for me in terms of choosing, potentially, Motus Bank and I'd be much more inclined to switch to Motive Financial.)

Cheers,
Doug

If that logic is correct, there'd be no difference having your RRSP's and RRIF's with Motus Bank vs Motive Financial in terms of difficulty for your heirs if you die since both are federal banks and you can't walk into either one.