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Brokerage investment savings accounts
November 2, 2022
9:11 pm
Norman1
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That's TD Direct Investing's short-term trading policy for mutual funds:

1Short-Term Redemption Fee Policy
Funds held for less than 30 days are subject to a short-term redemption fee of 1% of redemption value or $45 (whichever is greater) and are in addition to any fee(s) the mutual fund company itself may charge.

TDB8150 is a savings deposit and not a mutual fund.

November 3, 2022
12:01 am
Bill
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Agreed, those fees would apply to TD Money Market mutual funds, which some people confuse with the ISAs. The T&C for the ISAs make no reference to short-term redemption fees, far as I can see.

November 3, 2022
4:01 am
savemoresaveoften
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Bill said
Agreed, those fees would apply to TD Money Market mutual funds, which some people confuse with the ISAs. The T&C for the ISAs make no reference to short-term redemption fees, far as I can see.  

That’s what I thought too. However that $45 warning pops up when my friend put in a sell order.
I will ask him to contact TDW to confirm.

November 3, 2022
7:47 am
AltaRed
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I have not known anyone who has an in-house ISA with a discount brokerage (whether it be TDDI, RBC DI, CIBC IE, BMO IL, etc) having any redemption restrictions or fees.

As already noted, these are deposit accounts, not mutual funds subject to 30 day holds.

By 'in-house', I mean TDB series ISAs with TDDI, RBF series ISAs with RBC DI, etc.

November 3, 2022
8:07 am
mustang
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I also have been perplexed about that warning on the TD ISA 8152 sales
I went so far as to call in once, and was told that they never charged on these.
Still bothers me every time I see it
I'm guessing that, somehow, these have been coded under mutual funds in their system, thus triggering the "warning" message
Misleading

November 3, 2022
8:17 am
Bob
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The entire system needs to be revamped for clarity. For example, when I search ATL5000 Aseries with CIBC IE, it indicates as a front load, and I can buy it with no fees. When I search ATL5001 Fseries, it indicates as a no load, but I cannot buy it.

Other conflicting info include commission free hold periods, minimum purchases and sales... Sometimes the fund website says one thing, and the discount broker says something else, but they are not clearly indicated.

November 3, 2022
8:20 am
AltaRed
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The 30 day minimum hold 'without penalty' is meant to mitigate large cash inflows and outflows from a closed end fund and offset short term trading costs in the fund.

Every mutual fund invests according to its prospectus and if there is too much cash coming in, or cash going out, the manager simply cannot 'invest' fund cash effectively enough, never mind fund trading costs to buy/sell assets within the fund, to obtain a desired return on investment. Short term traders of mutual funds in effect 'cost' long term owners of mutual fund units and the redemption penalties are designed to both mitigate this behaviour and to help offset some of these costs to the benefit of long term holders of mutual fund units.

The ISAs are deposit accounts where the bank invests the proceeds in very short term cash, or cash equivalents that likely have no (minimal) costs to buy/sell on short notice, and/or are pooled in a very large pool of other cash investments the bank has already. IOW, they are bank savings accounts, not closed end mutual funds. There is no more reason to have a 30 day hold (without penalty) on ISAs than there is a reason to have a minimum hold period on ordinary bank savings accounts.

Added: For in-house ISAs, the entire product process/cycle is under full control of the corporate entity so there is no reason to have hold periods, commissions to buy/sell, etc. One could argue that there should be no Series A sales (with trailing commission) on in-house ISAs at all. One should be able to buy/sell TDB series Class F ISAs at TDDI without any cost to the customer at all (just like bank savings accounts).

It is a slightly different story for third party sales, e.g. someone buying a TDB series ISA at Questrade. In that case, there is a cost for Questrade to have a relationship with TD and the Series A trailer fee of 10-15bp would be appropriate compensation and a 30 day hold should be in place for Questrade to at least collect one trailer fee for the 30 day hold (trailer fees are paid on a monthly basis). Example: If someone bought (or could buy) $10k of TDB8150 at Questrade, the monthly trailer fee would be $10k@0.1% divided by 12 = 83.3 cents per month.

As for minimum purchases, it would stand to reason why the minimum purchase of TDB8150 at TDDI would be less than the minimum purchase of TDB8150 at Questrade. The administrative costs of dealing with third parties is higher than it is in-house so it makes sense there needs to be some higher minimum threshold for third party sales.

November 3, 2022
9:14 am
Norman1
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mustang said
I also have been perplexed about that warning on the TD ISA 8152 sales
I went so far as to call in once, and was told that they never charged on these.
Still bothers me every time I see it
I'm guessing that, somehow, these have been coded under mutual funds in their system, thus triggering the "warning" message
Misleading

They actually are packaged like a mutual fund and ordered through the FundSERV mutual fund system. To the computers, one is purchasing units of mutual fund TDB8152. But, we humans know that TDB8152 is a savings deposit and not really a mutual fund.

The regulators also know that and allow the discount broker to continue to collect a trailer commission on TDB8152. That's because the trailer is not really a mutual fund trailer but a deposit brokerage trailer!

All that is done so that a dealer selling mutual funds can now accept savings account deposits through the system dealer already has for transacting in mutual funds.

November 3, 2022
11:21 am
Bill
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In my TDDI account I bought some TD8150, 8155 & 8152($US) yesterday, no early redemption fee, etc messages came up.

November 3, 2022
3:56 pm
savemoresaveoften
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Bill said
In my TDDI account I bought some TD8150, 8155 & 8152($US) yesterday, no early redemption fee, etc messages came up.  

I believe the warning pops up when u place a sell order.

November 3, 2022
4:33 pm
Bill
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You're right, here's what pops up on sell order, standard warning re mutual fund sales (note the last line, I'm assuming HISA means these ISAs):

"Funds held for less than 30 days are subject to a TDW short-term redemption fee of 1% or $45, whichever is greater. The Fund Issuer may also have a short-term redemption fee of up to 3%, see Fund Facts. These fees are not charged on Money Market or HISA."

November 3, 2022
5:10 pm
savemoresaveoften
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Bill said
You're right, here's what pops up on sell order, standard warning re mutual fund sales (note the last line, I'm assuming HISA means these ISAs):

"Funds held for less than 30 days are subject to a TDW short-term redemption fee of 1% or $45, whichever is greater. The Fund Issuer may also have a short-term redemption fee of up to 3%, see Fund Facts. These fees are not charged on Money Market or HISA."  

Thanks Bill.
If my friend showed me the actually warning like you did, I would have told him ‘read the last sentence dude’ lol

November 4, 2022
9:34 am
Doug
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Bill said
Thanks, Doug, but I have no idea what your response means. For example, if I buy a non-registered GIC directly from CIBC I think your answer suggests it would be in nominee name too - ? I'm pretty sure it's not, just me and CIBC involved.

My question was really about how I could determine whether it's in nominee or my own name.

And if the scenario is slightly different, i.e. CIBC GIC purchased directly from CIBC but held in my Investor's Edge (CIBC related entity) account. I'm guessing nominee, due to being held in broker account, but I'm wondering how I could verify that, by other than calling them. When I access my account or view my statements and view my holdings is there any way to tell whether it's in nominee name or not? As Norman1 has indicated this has implications re CDIC coverage, not that I expect CIBC to go under.  

That's all behind the scenes, Bill. Your brokerage firm issues your statements. It just means that The Canadian Depository for Securities, Limited / FundSERV, Inc. is the legal entity that has their legal name on your deposits, but they don't hold the deposits and have no claim to them. They're just the clearing and settlement agent who in turn knows which securities brokerage firm / member firm, as applicable, beneficially holds your deposits. That exchange of your information occurs between them and your brokerage firm and the deposit issuer, such that at the end of the day, the deposit issuer knows who is the final beneficiary of the deposits after sorting through clearing / settlement agent firm, brokerage firm, and registered plan trustee/custodian (if applicable).

If your GIC has a FundSERV code assigned to it, it's definitely nominee name. If it doesn't, it quite likely is as well, but it's possible your brokerage firm may have a more direct relationship with CIBC that allows them to hold CIBC GICs directly in trust for you. (Yes, I realize that sounds weird saying "directly in trust for you".)

What complications in terms of CDIC coverage did Norman1 say there is, though? I haven't read through the entire threads. It shouldn't, so long as you ensure you:
- 1. Do not exceed your CDIC insurance limit per deposit issuer (as identified by FundSERV fund code; each issuer will have a different fund code) within that same brokerage account; and,
- 2. Ensure you follow the same practice of #1 for each of your brokerage accounts, non-registered and registered, individual and joint.

If you own CIBC deposits directly in your CIBC bank account/GICs, that's a separate deposit limit and should not be combined with the in trust deposits held in nominee name through a brokerage firm or deposit broker.

Hope that helps,
Doug

November 4, 2022
9:43 am
Doug
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Bill said
T&C for ATL5000 indicate it's held in nominee name only, so my understanding is the CDIC coverage would be separate from one's own CIBC coverage.

T&C for TD's TD8150 say "2. Operation of the TD ISA
Your Dealer has asked the Bank to open the TD ISA in the
Dealer's name on your behalf. The Bank has agreed to open a
TD ISA for your Dealer on your behalf and has designated the
Servicing Agent to act as a recordkeeping agent and to perform
certain administrative, trust accounting and other services with
respect to the TD ISA." So, again, am I correct to assume the CDIC coverage for TD8150 is separate from one's own deposits with TD?  

That's my understanding as well, so yep. 🙂

Cheers,
Doug

November 4, 2022
1:36 pm
Norman1
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The rest of the TD ISA terms and conditions explains the situation:

2. Operation of the TD ISA

… The Bank will open the TD ISA in the name of the Dealer as your nominee. Your Dealer will hold funds in the TD ISA in nominee name. As your nominee, your Dealer holds funds in the TD ISA in a trust capacity for you and for each of its clients on whose behalf funds have been deposited in the TD ISA. Where applicable law does not recognize a valid trust, the Dealer will hold the funds in the TD ISA as agent for you.

Where the dealer can hold the client ISA's as a nominee in trust for the clients there can be separate CDIC coverage for each client's ISA. CDIC requires the nominee to disclose individual client holding amounts to the CDIC member to have separate coverage.

Otherwise, where the dealer cannot act as a nominee (can act only as an agent) or nominee doesn't disclose individual holdings, then there is no separate CDIC coverage.

November 4, 2022
11:00 pm
Norman1
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Updated snapshot:

ISA Rate
Scotiabank Investment Savings Account, Series A (DYN6000) CAD 3.65%
Home Trust High Interest Savings Account, Class A (HOM100) 3.40%
Equitable High Interest Savings Account, Series A (EQB1000) CAD 3.30%
B2B Bank HIIA, Series A (BTB100) CAD 3.25%
RBC Investment Savings Account, Series A (RBF2010) CAD
TD Investment Savings Account, Series A (TDB8150) CAD
BMO High Interest Savings Account (BMT104) CAD
Renaissance High Interest Savings Account, Series A (ATL5000) CAD
Manulife Bank Investment Savings Account (MIP510) CAD 3.15%

Previous one was October 28.

November 8, 2022
4:25 am
Norman1
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Bank of Montreal increases rate to match Scotiabank's offering. Manulife Bank upped its rate as well:

ISA Rate
BMO High Interest Savings Account (BMT104) CAD 3.65%
Scotiabank Investment Savings Account, Series A (DYN6000) CAD
Manulife Bank Investment Savings Account (MIP510) CAD 3.55%
Home Trust High Interest Savings Account, Class A (HOM100) 3.40%
Equitable High Interest Savings Account, Series A (EQB1000) CAD 3.30%
B2B Bank HIIA, Series A (BTB100) CAD 3.25%
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
November 8, 2022
6:35 am
Patch002
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Thanks Norman1.

fyi National Bank

NBC100 (class A) is 3.25%
NBC200 (class F) is 3.50%

NBC101 (class A - USD) is 3.40%
NBC201 (class F - USD) is 3.65%

Also, if you have a NBDB no commission brokerage account, the HISA Cash etfs are available too.

merci,

November 8, 2022
7:34 am
Bob
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BMO USD is now 3.5%

November 11, 2022
9:22 am
ca-tech-fire
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Norman's chart is awesome ,but I want to point out that Scotia ITrade has a no load ISA with 3.8% interest, the DYN6004, that is better than the DYN6000, because the DYN6000 has a 0.15% trailer fee.

ScotiaISAs.png

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