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Brokerage investment savings accounts
June 8, 2024
6:23 am
Jim Sherat
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Well that didn't take long ! just logged into my TD ISA account and 4.55% is now 4.30% 🙁
How long will it take the others to follow suit ?

Dean said

Fortunately (for some of us), no change in TDB152's rate ... for now.

    Dean

  

So Dean, how does the exchange of funds work out ... sorry, I've only dealt with CDN fund investments ... does TD take a cut when your transfer say, $100K CF to the companion US Funds Cash account, to buy TDB152 in USF, and then when you sell it and convert back to C$ ? and of course there's the risk of a weakening C$ while you hold TDB152 ? T5 currency ? Sorry for all the quesitons, but it's tempting to move out of TDB8152 > TDB152 with the 600points delta (for now) 😉

June 8, 2024
8:12 am
Norman1
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Since last update, TD Bank reduced their rate (effective yesterday, June 7):

ISA (Canadian Dollars) Rate
BMO High Interest Savings Account (BMT104) 4.75%
Scotiabank Investment Savings Account, Series A (DYN6000)
Equitable High Interest Savings Account, Series A (EQB1000) 4.65%
Home Trust High Interest Savings Account, Class A (HOM100)
B2B Bank HIIA, Series A (BTB100) 4.55%
Renaissance High Interest Savings Account, Series A (ATL5070)
Manulife Bank Investment Savings Account (MIP510) 4.50%
NBI Altamira CashPerformer Account, Series A (NBC100) 4.30%
RBC Investment Savings Account, Series A (RBF2010)
TD Investment Savings Account, Series A (TDB8150)
June 8, 2024
10:22 am
AltaRed
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Jim Sherat said
So Dean, how does the exchange of funds work out ... sorry, I've only dealt with CDN fund investments ... does TD take a cut when your transfer say, $100K CF to the companion US Funds Cash account, to buy TDB152 in USF, and then when you sell it and convert back to C$ ? and of course there's the risk of a weakening C$ while you hold TDB152 ? T5 currency ? Sorry for all the quesitons, but it's tempting to move out of TDB8152 > TDB152 with the 600points delta (for now) 😉  

Current currency forex rates at TD https://www.tdcanadatrust.com/customer-service/todays-rates/rates.jsp (retail rates).

Client Buys (Pays CDN): 1.4120
Client Sells (Receives CDN): 1.3380

Our rates as of Sat Jun 8 13:00:00 EST 2024

I am not sure whether TDAM (TD Asset Management) would use retail or wholesale rate IF you, for example, used $100k Cad to buy TDB8152.

Bank of Canada page says the June 7th exchange rate was 1.374 so you can do the math on how much TD extracts from your wallet on a retail forex rate.

Many of us use "Norbert's Gambit" in our brokerage accounts to swap currencies, or the DLR/DLR.U ETF methodology for very inexpensive conversions.

Added: One can search this forum for threads on Norbert's Gambit or go to any one of a number of links such as https://www.finiki.org/wiki/Norbert%27s_gambit

I have used both the interlisted stock methodology (Norbert's Gambit) and the DLR/DLR.U variation. The interlisted stock option is generally best for larger sums as it spreads trading commission costs (if any) over larger sums of money. It also helps to use a high priced stock such as RY to diminish the Bid/Ask spread of 1-2 cents over a high priced stock.

Market arbitrage keeps the USD listing in NY aligned with real time forex rates with the CAD listing on TSX so there is minimal risk of mispricing. As an example. BN:CA closed at $57.14 on TSX yesterday and BN:US closed at $41.52 in New York for a ratio of 1.3763, very close to the BoC forex rate of 1.374.

June 8, 2024
11:14 am
Dean
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Jim Sherat said

. . .

So Dean, how does the exchange of funds work out ... sorry, I've only dealt with CDN fund investments ... does TD take a cut when your transfer say, $100K CF to the companion US Funds Cash account, to buy TDB152 in USF, and then when you sell it and convert back to C$ ? and of course there's the risk of a weakening C$ while you hold TDB152 ? T5 currency ? Sorry for all the quesitons, but it's tempting to move out of TDB8152 > TDB152 with the 600points delta (for now) 😉  

My reason(s) for having $$$ in TDB152 is because I have a TDDI 'USD' Investment Account, and that's were I keep my US funds that aren't invested in US stocks.

No Rocket Surgery involved. sf-smile

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

June 8, 2024
12:00 pm
Norman1
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AltaRed said

Current currency forex rates at TD https://www.tdcanadatrust.com/customer-service/todays-rates/rates.jsp (retail rates).

Client Buys (Pays CDN): 1.4120
Client Sells (Receives CDN): 1.3380

Our rates as of Sat Jun 8 13:00:00 EST 2024

I am not sure whether TDAM (TD Asset Management) would use retail or wholesale rate IF you, for example, used $100k Cad to buy TDB8152.

Those exchange rates may be for TD Canada Trust branch transactions and not for TD Direct Investing ones.

I've found that the US$ exchange rates used within Scotia iTRADE are not the same as those for Scotiabank.

Check the rate TD Direct Investing would use to transfer funds from a Canadian dollar account to an US$ account:

Where can I find foreign exchange rates in WebBroker?

You can find the current foreign exchange rates in WebBroker by following these steps:

  1. Select the Accounts tab in the top left menu.
  2. Under Transfers & Withdrawals, select Transfer cash within TD.
  3. Select the To and From accounts from the drop down menu.
  4. Enter any amount and the currency you wish to transfer.
  5. Click Continue.
  6. Do not click Confirm Transfer unless you wish to complete the foreign exchange transaction. Foreign exchanges cannot be reversed.
  7. Exit the function in WebBroker by clicking the X in the top right corner of the Transfers window.
June 8, 2024
12:16 pm
Peter
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The currently quoted cash transfer rate in my TD Direct Investing account is 1.3959, suggesting that they take a 1.5% spread.

June 8, 2024
12:53 pm
AltaRed
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Dean said

My reason(s) for having $$$ in TDB152 is because I have a TDDI 'USD' Investment Account, and that's were I keep my US funds that aren't invested in US stocks.

No Rocket Surgery involved. sf-smile

    Dean

  

I do similarly at Scotia iTrade and BMO Investorline but over time one may/will want to change the relative weighting of USD and CAD, either in cash or securities. That is when Norbert's Gambit comes in.

I didn't investigate whether the TD Bank forex rate was same/different than the TDDI brokerage forex rate in my post above. I have never used retail bank branch forex rates and was not aware of a difference. Mea culpa.

As an aside, Scotia iTrade platinum iClub level has a 1% spread but I have not used it and don't know if there is a minimum to obtain that rate or not.

June 8, 2024
2:14 pm
NorthernRaven
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Peter said
The currently quoted cash transfer rate in my TD Direct Investing account is 1.3959, suggesting that they take a 1.5% spread.  

A number of years ago I put various amounts into the TDDI exchange calculator, and there seemed to be distinct "levels" below 1.5% as the amounts increased. There may have been a small reduction over $1000, and around $15K it seemed to be around 1.3%. Somewhere around $30-35K it was 0.8%, and at something like $60K it topped out at around 0.67%. I think if you had >$100K and called in you might or might not have got a lower quote, I never actually did exchanges.

I don't know if it works the same way these days at TDDI.

June 8, 2024
5:01 pm
Norman1
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Scotia iTRADE does give a better rate for US$ when exchanging higher amounts of C$:

  $1,000 > 1.3955 per US$
  $5,000 > 1.3955
$10,000 > 1.3955
$25,000 > 1.3945
$50,000 > 1.3895
$90,000 > 1.3875
$100,000 > call

June 9, 2024
11:34 am
hwyc
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Guys are absolutely right. Tried different C$ to U$ amount on TDDI within a minute or two just now!

C$ 1,000 1.3965
C$10,000 1.3946
C$25,000 1.3896
C$50,000 1.3896
C$90,000 1.3866
C$100,000 1.3826

June 9, 2024
11:58 am
NorthernRaven
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I seem to remember that evenings and weekends may at times have used a fixed or conservative exchange rate and produced slightly different results than during trading hours, although I'm not sure of that at all.

And of course, what is really wanted is what sort of commission markup over the spot/midmarket rate they are charging at the various levels, so you have to get the spot rate at the same time as the brokerage quotes and do the math to see what it works out to.

June 10, 2024
2:58 am
Jim Sherat
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Thanks for the overwhelming response to my initial question at the top of this page. Lots of info to digest before I would switch to investing in US vs CDN Funds.

June 10, 2024
4:05 am
NorthernRaven
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Jim Sherat said
Thanks for the overwhelming response to my initial question at the top of this page. Lots of info to digest before I would switch to investing in US vs CDN Funds.  

I obtained a big lump of $USD (via Norton's Gambit) almost 15 years ago to pick up USD-denominated index funds. At the time, the CAD funds were currency-hedged, expensive, or non-existent, and the hassle was probably worth it. Nowadays any advantages of USD funds is very much more marginal, and frankly, I would likely have just used the CAD equivalents.

June 10, 2024
7:21 am
AltaRed
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NorthernRaven said
Nowadays any advantages of USD funds is very much more marginal, and frankly, I would likely have just used the CAD equivalents.  

That is true for investments overall, but this was a specific question around USD ISAs versus CAD ISAs. It is reasonable to assume (like the market is) that the loonie may continue to depreciate as the BoC reduces interest rates and the US Fed does not. Not only that but the yield on USD ISAs will remain higher than that of CAD ISAs. That would (will) be a double benefit in the short term.

The question is how long will that occur and to what extent, and does the cost of conversion to USD for some period of time and then the cost of conversion back to CAD worth it? At retail costs of conversion, I have real doubts about it and I personally would not do it.

Using a cheap(er) mechanism like maybe some discount brokerage rates, or using DLR/DLR.U, or Norbert's Gambit MIGHT be worth it. I still have no plans to do it and thus continue to hold both CAD ISAs and USD ISAs in my portfolio.

June 10, 2024
8:33 am
Dean
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Dean said

My reason(s) for having $$$ in TDB152 is because I have a TDDI 'USD' Investment Account, and that's were I keep my US funds that aren't invested in US stocks.

No Rocket Surgery involved. sf-smile

    Dean

I should have also mentioned that back-in-the-day when I put a Good
Chunk O' Change into my new TDDI USD Investment Account, the CAD
& USD were ~ 'At Par'.

Would I do the same thing today, with the CAD @ ~72¢ USD? ... Nope ❗

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

June 10, 2024
10:35 am
mordko
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I don’t have a view on the future of USD/CAD rate but money tends to rush into USD at times of trouble. Having USD-denominated ISAs and money market funds could help to dampen volatility when things go wrong.

June 10, 2024
6:05 pm
Norman1
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Since last update, Equitable Bank, Home Trust, and Renaissance Investments reduced their rates:

ISA (Canadian Dollars) Rate
BMO High Interest Savings Account (BMT104) 4.75%
Scotiabank Investment Savings Account, Series A (DYN6000)
B2B Bank HIIA, Series A (BTB100) 4.55%
Manulife Bank Investment Savings Account (MIP510) 4.50%
Equitable High Interest Savings Account, Series A (EQB1000) 4.40%
Home Trust High Interest Savings Account, Class A (HOM100)
NBI Altamira CashPerformer Account, Series A (NBC100) 4.30%
RBC Investment Savings Account, Series A (RBF2010)
Renaissance High Interest Savings Account, Series A (ATL5070)
TD Investment Savings Account, Series A (TDB8150)
June 11, 2024
5:58 pm
Norman1
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Since last update, B2B Bank and Manulife Bank reduced their rates:

ISA (Canadian Dollars) Rate
BMO High Interest Savings Account (BMT104) 4.75%
Scotiabank Investment Savings Account, Series A (DYN6000)
B2B Bank HIIA, Series A (BTB100) 4.40%
Equitable High Interest Savings Account, Series A (EQB1000)
Home Trust High Interest Savings Account, Class A (HOM100)
NBI Altamira CashPerformer Account, Series A (NBC100) 4.30%
RBC Investment Savings Account, Series A (RBF2010)
Renaissance High Interest Savings Account, Series A (ATL5070)
TD Investment Savings Account, Series A (TDB8150)
Manulife Bank Investment Savings Account (MIP510) 4.25%
June 12, 2024
2:43 am
savemoresaveoften
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ATL bonus ends today.

June 12, 2024
9:00 am
canuckles
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savemoresaveoften said
ATL bonus ends today.  

Thanks for the heads up! I've sold and will move back to DYN6000 🙂

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