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Brokerage investment savings accounts
February 9, 2023
8:17 am
AltaRed
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dougjp said

On that misinformed point, I was told a long time ago I could only get the "captive" banks' product, so never looked into it for awhile. When I was with TD Waterhouse years ago, I was DEFINITELY told only their own savings product was available.  

It is definitely brokerage dependent and may be additionally issuer dependent. Some brokerages will not allow the purchase of anything other than their in-house ISA product. Some of those same ones will not allow the purchase of Cash ETFs like CSAV which are publicly traded on the TSX. There was a G&M article not too long ago on this Cash ETF situation with brokerages like TDDI and RBC DI being culprits. It seems it is the brokerages who are thus primarily restrictive.

It also may well be that issuers of some ISAs may not want anyone else being able to sell their in-house ISA to their clients. That might seem odd but after all, these ISAs are actually deposit accounts and would BMO for example want CIBC IE to be able to sell BMO ISAs to their own clients? It would not be really different than Oaken peddling EQ Bank savings accounts to their own Oaken clients.

Anyways, there are various restrictions and complications that one does not know about until they try to purchase X via their current brokerage and it is only through sites such as this and/or media articles that we can flush out the possibilities and restrictions.

I am not fussed about any of this since I have both BMO Investorline and Scotia iTrade brokerage accounts and their ISAs are competitive. Further, with a big bank, I would have no problem having 7 figures in any one of those ISAs. CDIC insurance coverage simply is of negligible value for a AA rated big bank.

February 9, 2023
9:16 am
MG
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smayer97 said
So how are you getting DYN6000, through another broker?  

Surprisingly, I just purchased DYN6000 through my Investor's Edge account at CIBC. They have quite a few "non CIBC" ISAs available for purchase.sf-cool

February 9, 2023
9:18 am
canada888
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smayer97 said
So how are you getting DYN6000, through another broker?  

nbdb supports it but only reinvest the distribution

February 9, 2023
9:22 am
Norman1
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Looks like Scotia iTRADE is now offering access to Royal Bank's ISA RBF2010 and Manulife's ISA MIP510.

One can now get as far as entering a mutual fund buy order for both and to confirming the order.

The access is not useful in practice right now as their in-house ISA's DYN6000 and DYN6004 pay a higher rate.

February 9, 2023
9:33 am
Norman1
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AltaRed said

It also may well be that issuers of some ISAs may not want anyone else being able to sell their in-house ISA to their clients. That might seem odd but after all, these ISAs are actually deposit accounts and would BMO for example want CIBC IE to be able to sell BMO ISAs to their own clients? It would not be really different than Oaken peddling EQ Bank savings accounts to their own Oaken clients.

I don't think BMO would mind CIBC Investors Edge raising deposits for it. The banks have no problems with competitor's brokerages offering their GIC's.

At one conference, Equitable Bank's CEO gave a nod to TD Bank's brokerage for the significant amount of Equitable Bank GIC's the brokerage sold!

The brokerages of the banks would prefer to be compensated, for the deposits, around the customary deposit brokerage commission of ¼% per annum and not a flat discount brokerage of $6.95 or $9.95 per GIC.

February 9, 2023
10:26 am
AltaRed
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I understand but the GIC market is one thing and ISAs are another newer, less understood market segment. IIRC, the G&M article was very clear about the likes of TDDI and others not offering competitor ISAs nor even the Cash ETFs available on the TSX. CIBC Investor's Edge and Scotia iTrade of the big bank brokerages were notable exceptions allowing the purchase of at least some competitor ISA products AND the purchase of Cash ETFs. The independent brokerages were also exceptions. I am too lazy to google and link the G&M article at the moment.

February 9, 2023
10:41 am
savemoresaveoften
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AltaRed said
I understand but the GIC market is one thing and ISAs are another newer, less understood market segment. IIRC, the G&M article was very clear about the likes of TDDI and others not offering competitor ISAs nor even the Cash ETFs available on the TSX. CIBC Investor's Edge and Scotia iTrade of the big bank brokerages were notable exceptions allowing the purchase of at least some competitor ISA products AND the purchase of Cash ETFs. The independent brokerages were also exceptions. I am too lazy to google and link the G&M article at the moment.  

IE and Itrade wants to compete more with the new comers like NBC and other platforms that offer $0 commissions etc. Kudo to both CIBC and Scotia to live in the modern world, as oppose to TD and RBC who clearly uses their sizes to offer substandard services at inflated prices if u ask me.

February 9, 2023
5:59 pm
AndreyG
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Buying ISA on Margin - is there a flaw in this idea?

February 9, 2023
6:09 pm
Bill
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I wouldn't have thought it could be done but TD's (for example) fine print says "The TD Investment Savings Account may be margin able up to 95% through an approved margin account. Please consult your dealer advisor for further details" so I was wrong.

I suppose any time you can borrow money and pay less interest than what you're going to make (after tax) with the borrowed money it's a good idea. Have you looked into whether or not the interest you pay would be tax-deductible, AudreyG?

February 9, 2023
6:18 pm
AndreyG
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No Bill but I just checked interest rate at TD Direct trading is 8.25% so I think this explains why nobody's doing it. Or am I wrong?

February 9, 2023
6:21 pm
savemoresaveoften
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AndreyG said
Buying ISA on Margin - is there a flaw in this idea?  

no flaw, except the margin borrowing rate will ALWAYS be higher the ISA, its one of the few things in life that are guaranteed.

Disclaimer: I am talking regular margin rate compare to ISA rate, not some teaser 1.99% balance transfer rate that you see from some credit card promo from time to time. Those are NOT margin rate anyway.

February 9, 2023
6:56 pm
Bill
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I agree, AudreyG, doesn't look like a profitable idea.

February 10, 2023
8:10 am
Norman1
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AltaRed said
I understand but the GIC market is one thing and ISAs are another newer, less understood market segment. IIRC, the G&M article was very clear about the likes of TDDI and others not offering competitor ISAs nor even the Cash ETFs available on the TSX. CIBC Investor's Edge and Scotia iTrade of the big bank brokerages were notable exceptions allowing the purchase of at least some competitor ISA products AND the purchase of Cash ETFs. …

It is up to CIBC and Bank of Nova Scotia to decide what adequate compensation would be for offering a competitor's ISA deposits to their own brokerage clients.

Other banks may not think the 0.15% to ¼% per annum is adequate and refuse.

I think it is just a question of compensation. Royal Bank, for example, allows Manulife Bank Advantage account holders to do deposits to their Manulife Bank account via tellers of RBC Royal Bank branches. Such deposits are done using specially coded deposit slips. So, Manulife Bank and Royal Bank have come to an agreement for RBC Royal Bank branch teller access.

February 10, 2023
8:28 am
AltaRed
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FWIW, the G&M Rob Carrick 2023 discount brokerage summary is out today and there is special mention of ISAs and Cash ETFs and which brokerages allow competitor options and which do not. Of the big bank offerings, CIBC IE and Scotia iTrade stand out as offering competitor options while BMO IL, TDDI and RBC DI are especially anti-competitive. The independents are also quite good at offering a range of ISA options.

TDDI is on record in the G&M last summer as saying they believe they offer their clients enough with their in-house options.

February 11, 2023
1:06 pm
Norman1
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Since last update, increases from B2B Bank, Equitable Bank, and Renaissance Investments:

ISA Rate
BMO High Interest Savings Account (BMT104) CAD 4.35%
Scotiabank Investment Savings Account, Series A (DYN6000) CAD
Manulife Bank Investment Savings Account (MIP510) CAD 4.25%
Equitable High Interest Savings Account, Series A (EQB1000) CAD 4.20%
Home Trust High Interest Savings Account, Class A (HOM100)
NBI Altamira CashPerformer Account, Series A (NBC100) CAD 4.05%
RBC Investment Savings Account, Series A (RBF2010) CAD
TD Investment Savings Account, Series A (TDB8150) CAD
Renaissance High Interest Savings Account, Series A (ATL5000) CAD 4.00%
B2B Bank HIIA, Series A (BTB100) CAD 3.70%
February 14, 2023
11:07 am
canada888
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February 14, 2023
5:38 pm
Bruford
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TD is always the laggard. I set up most of my registered accounts with TD Waterhouse long ago, when they were the best in the discount brokerage self directed game. Now they consistently are behind Scotia ITrade in service and offerings. I am slowly switching to Scotia.

February 15, 2023
7:55 am
kesa
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Norman1 said
Since last update, increases from B2B Bank, Equitable Bank, and Renaissance Investments:

ISA Rate
BMO High Interest Savings Account (BMT104) CAD 4.35%
Scotiabank Investment Savings Account, Series A (DYN6000) CAD
Manulife Bank Investment Savings Account (MIP510) CAD 4.25%
Equitable High Interest Savings Account, Series A (EQB1000) CAD 4.20%
Home Trust High Interest Savings Account, Class A (HOM100)
NBI Altamira CashPerformer Account, Series A (NBC100) CAD 4.05%
RBC Investment Savings Account, Series A (RBF2010) CAD
TD Investment Savings Account, Series A (TDB8150) CAD
Renaissance High Interest Savings Account, Series A (ATL5000) CAD 4.00%
B2B Bank HIIA, Series A (BTB100) CAD 3.70%

  

hi there, just curious about how you determined BMT104 @ 4.35%?

February 15, 2023
8:27 am
AltaRed
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Some of us have BMO Investorline accounts and can get the information while online in our accounts. BMO doesn't advertise their ISAs as being available to anyone else other than BMO clients so it may be a moot point for most.

February 15, 2023
10:38 am
Norman1
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As AltaRed described, I got the current yield of BMT104 from my BMO InvestorLine account.

Scotia iTRADE's mutual fund order form can't resolve BMT104 to a fund name and price. It is possible the BMO ISA's are only available through Bank of Montreal's own brokerages.

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