Brokerage investment savings accounts | Page 43 | General comparisons | Discussion forum

AltaRed said
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.  

Oh, absolutely, I don't disagree with this. I wasn't referring so much to ISA and MMF fund rates, but rather direct-to-consumer sourced deposits, like when you walk into a retail bank branch.

Cheers,
Doug

The posted interest rate of 2.45% is what you get, the trailer fee just shows what the selling dealer gets from Scotia. Far as I know.

AltaRed said

AFAIK, the big 5 (or 6) bank brokerages will only let you buy their in-house ISAs.  

Actually, CIBC Investors Edge will let you purchase several other ISAs including DYN6000 (but not the F class). Agree that TDDI only permits purchase of their in-house ISA.

That is good news to hear. Maybe BMO (BMO IL), TD (TDDI) and RBC (RBC DI) will get the message, not that I care about TD and RBC personally, but I'd like to see BMOIL at least allow their clients to buy F class BMO ISAs. It is obscene that an 'execution only' discount brokerage has the audacity to want the 25bp trailer fee.

Not that it matters much because I use BMO95142 Class F money market mutual fund at BMOIL which yields about the same as F class ISAs anyway.

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. . . ⬆️ Almost halfa year of Unchanged Rates❗

Dean

Unfortunately, I am totally ignorant about brokerages and how they work 🙁

On the Scotiabank webpage, there is a tab for Scotia iTrade. When I click the tab, I am offered to apply for an account online.

If I apply for an account, can I open a Scotiabank DYN6000 savings account on my own, or do I have to go through a "broker"?

And if I am able to open a DYN6000 savings account, am I able to withdraw funds from it and deposit funds to it like a regular savings account?

AltaRed said

When you have a Scotia iTrade brokerage account, you can buy a wide range of assets/holdings ranging from stocks to ISAs (or Investment Savings Accounts) such as DYN6000 (or better yet DYN6004 which is the F class version without trailer fee).

These ISAs are CDIC insured savings accounts BUT they are purchased and sold as 'units' through the mutual fund Fundserv system tab within Scotia iTrade. If you want to buy $10000 of DYN6004, you purchase 10000 units @ $1 each. If you buy before 2pm Eastern time, you will close that purchase T+1 which means Transaction Day plus one day, and it will show in your Scotia iTrade account on the following business day.

Example: Purchase 10000 units Thursday (Sept 18) morning. The transaction will complete at the COB on Friday (19th) and start earning interest then. That asset will then show up in your account possibly on Sat morning, but possibly not until the next business day (Sept 22nd) though it will be earning interest starting Saturday.  

Thanks so much for that, AltaRed!

Just one more question: How do I "buy" DYN6000 or DYN6004? Can I link Scotia iTrade to my regular chequing/savings accounts, and transfer back and forth between them?

(sorry, those are two more questions )

AltaRed said
Once you open a Scotia iTrade account, it should be visible on your Scotiabank banking home page (if you have a Scotiabank online account) as an Investment account. Then it is merely an internal 'move money' transfer via that home page.

If you are trying to move money into Scotia iTrade from a third party bank, e.g. EQ or RBC or similar, the most likely method of doing so is finding Scotia iTrade Corp as a Bill Payee in the Bill Payment section of your bank chequing account. That is how I move money from BMO banking to Scotia iTrade. However, if Scotia iTrade is not listed as a Bill Payee, then it might be Scotia Capital. Every FI has a different list of Bill Payees.

Failing that, you might be able to fill out an EFT form with Scotia iTrade that will pull or push funds from/to the chequing account of choice (they will likely need a Void cheque as part of that application). I know their EFT form will allow for a push of funds from Scotia iTrade to a bank, but I don't know if you can pull funds from a bank that way. You will likely need to talk to them directly if their online instructions within Scotia iTrade are not clear.  

That's fantastic info!
Thanks again!

Would you know why Scotiabank DYN6000 or DYN6004 is not listed in the HISA chart?

Pythagoras said

Would you know why Scotiabank DYN6000 or DYN6004 is not listed in the HISA chart?  

Because ISAs bought and sold through brokerages are not direct-to-retail bank/CU HISAs. ISAs are discussed here https://mrthrifty.ca/investment-savings-accounts-maximize-interest-in-your-brokerage-account/

Added: Be aware all these ISA rates are most likely going to drop 25bp over the course of the next 7 days as a result of today's 25bp Bank of Canada, and US Federal Reserve, interest rates. ISA rates tend to track central bank rates (not unlike MMFs as well).

I’m new to investment brokerage accounts too. What kind of insurance coverage do brokerage accounts have?