Brokerage investment savings accounts | Page 42 | General comparisons | Discussion forum

canadian.100 said
For Scotiabank/iTrade instead of DYN6000 Series A you can buy DYN6004 Series F and get 2.70% rather than just 2.45% for DYN6000.  

As I understand it, so can DYN6004 be bought at certain other brokerages too. And perhaps even some other F class ISAs. It just seems DYN6004 (and DYN6005 USD) appears to be more readily available. WE have discussed this before probably in this thread. It just gets too complicated to cover all classes and possibilities.

I'm happy to see B2B consistently ranking as the highest rate. It's almost as good as Hubert’s One-Year Quarterly Term. But keeping in mind this GIC is less liquid and ineligible for FHSA's, this has made me use B2B as a hassle-free, worry free, best interest rate for my FHSA.
Of course, there's always promo rates and bonuses, but in my case, with a deposit on smaller side, I'll keep it parked in BTB101 Series F. 🙂 Thanks for the regular updates and historical data points, this has been VERY helpful.

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Thanks Norman ⬆

It would seem that the USD versions remain Stable as well . . .

E.G. ➡ TDB8152 (TD US$ ISA) Interest Rate remains @ 3.90%

They're bound to change at some point ... it's just a matter of Tik-Tik-Tki.

Dean

Fritz23 said
Hello,

CI Direct Trading and iTrade are listing Brokerage Investment Savings Accounts (ISA’s) like DYN 6005 in tax slip T5008 (statement of securites transactions). BMO InvestorLine isn’t reporting ISAs in the T5008. Therefore my question:

Do I have to include ISAs in my income tax return (T1) under Schedule 3 (Capital Gain and losses) as a disposition of mutual fund units (Box 10689)?

My understanding is ISAs are deposit accounts and not mutual funds even though ISA deposits and withdrawals are executed like a mutual fund trade (deposit = buy and withdrawal = sell) with a fixed price per unit of $1. Because strictly speaking ISAs are not mutual funds and no capital gain is possible because of the fixed unit price ISAs don’t have to be listed under Schedule 3 in my tax return.

Do you agree?

Thank you.  

ISAs are deposit accounts (with a T5 tax slip). As long as USD is simply moved between USD desposit accounts (of any type), there is no cap gain or loss that needs to be reported in Schedule. However, as soon as any USD from a deposit account to buy a security such as a bond, stock, mutual fund, that is a sale of USD with an associated cap gain or loss. Note that a USD money market mutual fund (with a T3 tax slip) is a security, not a deposit account and movement of USD into/out of USD money market funds is an acquisition/disposition event.

When I buy units of DYN6005 (ISA) in my account from my USD cash balance in my account, there is no acquisition, nor is there a disposition if I sell units of DYN6005 and leave it as USD cash in my account. However, if I sold DYN6005 units (or USD cash) to buy an asset (security) whether it be a USD MMF, stock or bond, I then have a disposition of USD. It is one reason I never buy or sell USD money market mutual funds.

Added: That all said, eventually one is going to use the USD to buy something else, i.e. a security, another asset, or spend it on a consumable good or a service (like a taxi fare in the USA or a restaurant meal). That USD does then attract a cap gain or loss. CRA has made that very clear in one of their guides. Thus as Norman1 says, it is certainly possible to have cap gains/losses from a USD chequing, savings or ISA account.

However, CRA does allow taxpayers to not report the first $200 (CAD equivalent) of forex cap gain or loss as a matter of practicality, so many folk will not run afoul from failing to report.

The truth of the matter is most taxpayers would never consider that the 'spending' of USD on a consumable good or service could result in a forex cap gain or loss and would thus not report it on a tax return. I have never done so when spending USD on consumables such as a trip on the premise I am not buying something that will ultimately earn me investment income or capital appreciation. I do report forex cap gains/losses on transactions where I buy capital assets like stocks, bonds and mutual funds with the potential for recurring income or cap gains.

Norman1 said

AltaRed said

When I buy units of DYN6005 (ISA) in my account from my USD cash balance in my account, there is no acquisition, nor is there a disposition if I sell units of DYN6005 and leave it as USD cash in my account. However, if I sold DYN6005 units (or USD cash) to buy an asset (security) whether it be a USD MMF, stock or bond, I then have a disposition of USD. It is one reason I never buy or sell USD money market mutual funds.
…

There is really no units of the DYN6005 ISA.

The units and price per unit shown on Scotia iTRADE's system are a fiction created for the benefit of the Fundserv mutual fund system that the ISA transactions are put through.

There's actually no units of a mutual fund trust or shares of a mutual fund corporation. There's just dollars and cents moving to and from a Bank of Nova Scotia savings account. If one buys or sells 5,000 units, that becomes a $5,000 deposit to or withdrawal from the savings account.  

Sure, ISA "units" are a fiction of the system used to move funds into, or out of, these deposit (savings) accounts but that is the terminology used to describe the process, as compared to online/ATM/teller banking, to move funds into, or out of, the deposit (savings) accounts. The holder receives a specific yield determined by the bank sponsor, regardless of the underlying profit (net interest margin) earned by the bank sponsor.

Money market mutual funds are a different animal altogether. They are pass through entities in which a portfolio manager buys and sells underlying holdings with cash inside the trust. The mutual fund unitholder is the one who receives the 'pass through' proceeds net of costs. It is important for the investing public to recognize the differences.

ISAs are deposit accounts which are CDIC insured and issue T5 tax slips. MMFs are mutual fund trusts which are not CDIC insured although some of their underlying holdings could be CDIC insured, and these trusts issue T3 tax slips just like any other trust.

There is no reason for CAD ones to change until BoC makes a change. Same thing for USD ones with the Fed Reserve.

Doug said

Yes, though I would add that gyrations in the Canadian bond markets without a change in the BoC Policy Interest Rate would also affect various term and/or demand deposit rates.

Institution-specific factors may also come in to play, too, such as institutions needing to raise funds for a specific purpose, though these will often be in the form of special term promotions.

Cheers,
Doug  

Possibly but the half dozen or so FIs most likely invest ISA liabilities in assets like commercial paper, banker's acceptances, 30 day T bills and the like, similar to what Money Market mutual funds do. There is a reason why ISA yields pretty much line up with MMF yields albeit ISAs typically respond with minimal lag to central bank changes compared to the duration effect (30-60 days) of that of MMFs. It has been that way for the several years I have followed these products.

It is not much of a coincidence that non-trailer fee Class F ISA like DYN6004 has a yield of 2.7% and a Class F MMF like BMO95142 has a current yield of 2.73%. The FIs are perhaps making a spread of only 10-20bp or so on these funds.