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Brokerage investment savings accounts
November 11, 2022
10:01 am
AltaRed
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Yeah, but Norman's chart is all about Series A as he specifically states. Most, if not all, of the brokerage ISAs have an F version.

The only differences are under what conditions can an investor access F series. In many cases, it is only if an investor has a third party financial advisor type account OR maybe a commission based transaction OR certain brokerages that allow the DIY investor to access F series.

We know Scotia iTrade account holders can access the DYN F series as one example and I know BMO Investorline account holders cannot access the BMT F series. I don't know about others.

November 11, 2022
10:55 am
Bob
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AltaRed said
Yeah, but Norman's chart is all about Series A as he specifically states. Most, if not all, of the brokerage ISAs have an F version.

The only differences are under what conditions can an investor access F series. In many cases, it is only if an investor has a third party financial advisor type account OR maybe a commission based transaction OR certain brokerages that allow the DIY investor to access F series.

We know Scotia iTrade account holders can access the DYN F series as one example and I know BMO Investorline account holders cannot access the BMT F series. I don't know about others.  

CIBC Investors Edge cannot buy the Renaissance HISA F series

November 18, 2022
9:30 am
Dean
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.
Update . . .

    TDDI ISA-US$ (TDB8152) now @ 3.40%

Dean

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

November 18, 2022
6:39 pm
paul99
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AltaRed said
Yeah, but Norman's chart is all about Series A as he specifically states. Most, if not all, of the brokerage ISAs have an F version.

The only differences are under what conditions can an investor access F series. In many cases, it is only if an investor has a third party financial advisor type account OR maybe a commission based transaction OR certain brokerages that allow the DIY investor to access F series.

We know Scotia iTrade account holders can access the DYN F series as one example and I know BMO Investorline account holders cannot access the BMT F series. I don't know about others.  

hi guys. i'm new to this (great) forum, so if i respond to AltaRed incorrectly, i apologize.

i have had a Scotia iTrade account for many years. and have used their DNY6000 vehicle to hold cash off and on. i've never been able to find out from Scotia iTrade what rate DNY6000 was paying. so, digging on the internet, i came up with your link https://www.highinterestsavings.ca/forum/general-comparisons/brokerage-investment-savings-accounts/page-5/

this prompted me to call scotia iTrade and ask what the conditions were on the Series A vs Series F funds, because i was always told (as noted by AltaRed) that i could not access Series F funds (restricted to advisors). the iTrade advisor told me that in March 2022, the OSC made a decision that Series F funds should be available to all.

i assume that what the OSC was saying, is that if an individual has a self-directed account, and doesn't use an advisor (that is due a fee for service), then that individual should have access to the same rate, and not be penalized the fee that would go to an advisor. however, i have not been able to find the decision on the OSC website for clarification.

today i booked some funds to DYN6004, an F Series fund, and the transaction went through. with Scotia iTrade, that's about the only way you can find out if a fund is available or not, because the people at the end of the phone line will tell you nothing about the fund, or it's availabilty.

i hope this helps to clarify the Series A vs Series F fund confusion. if anyone has a simplified explanation of the OSC March 2022 decision, i would like to see it.

thanks for your patience, and i apologize in advance in case i am on the wrong forum, or suggesting the incorrect info. i'm new here, and only trying to help out.

a good theme song for this forum may be Kenny Rogers' "know when to hold 'em, know when to fold 'em, ....." i tried to attach it, but couldn't figure that out.

have a nice weekend. paul

November 19, 2022
7:26 am
AltaRed
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What you are referring to is the March 2022 OSC ban on trailer fee mutual funds being sold at DIY discount brokerage accounts commencing June 1 2022. There are numerous links on this matter such as https://www.advisor.ca/news/industry-news/osc-adopts-measures-to-facilitate-trailer-fee-ban/

That ban though is for mutual funds as an investment vehicle. The ISAs are deposit accounts, not mutual funds. They only use the mutual fund platform to facilitate transactions (buy/sell) of ISAs. They are thus not covered by the regulatory ban.

I think what Scotia iTrade decided to do was to simply include their ISAs under that umbrella to simplify their own processes and to avoid having to explain to customers why ISAs were not under that trailer fee ban. Whatever their reason, they clearly chose not to advertise (articulate) it and unless an investor made the effort to try and purchase the F class versions, they were happy to let the investor stay in the A series versions. I am glad I heard about it here and switched to F series a few months ago and effectively boost my yield by 10-15bp. It is not much but it all counts.

It appears Scotia iTrade may be the only one, or one of the few, of the discount brokerages who will allow their clients to buy their in-house F series ISAs.

November 19, 2022
9:23 am
Norman1
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The Scotia iTRADE situation may not be intentional.

All the series F mutual fund codes were enabled. But, it was not realized that one of them was for series F "units" of an in-house ISA. ISA's are not mutual funds.

As AltaRed mentioned, the trailer ban only applies to mutual funds. The order-execution-only dealers can still be paid trailers on other products, including deposits in the form of ISA's.

IIROC: OEO Trailer Ban and CSA: Notice of Amendments to National Instrument 81-105 Mutual Fund Sales Practices… have the legal text of the changes.

November 19, 2022
10:44 am
Doug
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AltaRed said
What you are referring to is the March 2022 OSC ban on trailer fee mutual funds being sold at DIY discount brokerage accounts commencing June 1 2022. There are numerous links on this matter such as https://www.advisor.ca/news/industry-news/osc-adopts-measures-to-facilitate-trailer-fee-ban/

That ban though is for mutual funds as an investment vehicle. The ISAs are deposit accounts, not mutual funds. They only use the mutual fund platform to facilitate transactions (buy/sell) of ISAs. They are thus not covered by the regulatory ban.

I think what Scotia iTrade decided to do was to simply include their ISAs under that umbrella to simplify their own processes and to avoid having to explain to customers why ISAs were not under that trailer fee ban. Whatever their reason, they clearly chose not to advertise (articulate) it and unless an investor made the effort to try and purchase the F class versions, they were happy to let the investor stay in the A series versions. I am glad I heard about it here and switched to F series a few months ago and effectively boost my yield by 10-15bp. It is not much but it all counts.

It appears Scotia iTrade may be the only one, or one of the few, of the discount brokerages who will allow their clients to buy their in-house F series ISAs.  

It could also be a passive way for Scotia iTRADE to attract new deposit business for the bank in a low cost way, and, additionally, to maintain and even gain market share at the expense of competitors with commission free trading offerings.

Cheers,
Doug

November 26, 2022
8:02 am
Norman1
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Since previous update, Home Trust increased its offering from 3.4% to 3.65%:

ISA Rate
BMO High Interest Savings Account (BMT104) CAD 3.65%
Home Trust High Interest Savings Account, Class A (HOM100)
Scotiabank Investment Savings Account, Series A (DYN6000) CAD
Manulife Bank Investment Savings Account (MIP510) CAD 3.55%
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
Renaissance High Interest Savings Account, Series A (ATL5000) CAD
TD Investment Savings Account, Series A (TDB8150) CAD
December 9, 2022
2:29 pm
Norman1
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Lots of changes after the Bank of Canada ½% hike two days ago:

ISA Rate
Scotiabank Investment Savings Account, Series A (DYN6000) CAD 3.90%
Manulife Bank Investment Savings Account (MIP510) CAD 3.80%
BMO High Interest Savings Account (BMT104) CAD 3.65%
Home Trust High Interest Savings Account, Class A (HOM100)
B2B Bank HIIA, Series A (BTB100) CAD 3.60%
RBC Investment Savings Account, Series A (RBF2010) CAD 3.55%
TD Investment Savings Account, Series A (TDB8150) CAD 3.40%
Equitable High Interest Savings Account, Series A (EQB1000) CAD 3.30%
Renaissance High Interest Savings Account, Series A (ATL5000) CAD 3.25%
December 10, 2022
9:44 am
Doug
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Nice! 🙂

For those with Scotia iTRADE or Scotia McLeod who have access to the Series F version like me (where I hold DYN6004), they now have access to a HISA paying a regular, posted daily rate if interest of 4.05%, meaning a Big Five bank (Scotiabank and its Scotiatrust, Montreal Trust, National Trust, and Scotia Mortgage GIC issuer subsidiaries) continues its reign of paying Canada's highest deposit rate, and the first in Canada paying above 4% sf-cool

Cheers,
Doug

December 10, 2022
10:11 am
Dean
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.
According to my TDDI accounts, TDB8150 (CAD) is now @ 3.55%. TD's out-of-date documentation will probably be corrected on Monday.

Whoda thought ISA rates would go so high ❓❗

They're like a nice stock dividend, but without the risk. sf-smile

    Dean

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

December 10, 2022
11:26 am
JenE
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I find this topic interesting albeit rather incomprehensible. Where should I look, or go, for “beginner” information? Also, is there any advantage to holding these accounts over ordinary high interest accounts? Any information/insights, will be appreciated.

December 10, 2022
11:51 am
Doug
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JenE said
I find this topic interesting albeit rather incomprehensible. Where should I look, or go, for “beginner” information? Also, is there any advantage to holding these accounts over ordinary high interest accounts? Any information/insights, will be appreciated.  

JenE, to start, you do need to have a discount brokerage account (i.e., Scotia iTRADE).

Each of the Big Five-owned discount brokerages generally only offer their own parent company bank's brand of ISAs.

ISAs are fully insured by CDIC, under provisions related to trust account deposits. The deposits are registered in the legal name of The Canadian Depository for Securities, Limited, and then allocated to each IIROC investment dealer institution (i.e., Scotia Capital, Inc., in the case of Scotia iTRADE) in the case of non-registered accounts or their investment dealer's trust company custodian in the case of registered accounts. The ISAs are further held in trust in for each unique depositor, meaning if you have a joint brokerage account and a sole brokerage account, those are treated as separate depositors with separate CDIC limits for each.

A big advantage of ISAs held at brokerage firms is that you can easily hold deposits from multiple FIs, often sharing the same parent company, in a single account (each deposit is recognized by their FundSERV code).

Transfers to and from your brokerage firm are a bit different than with banks. Most brokerage firms allow you to add their firm as an online banking bill payee, which is great for smaller transfers (generally limited to $25-50,000). This is equivalent to pushing funds to the brokerage firm, and generally there is no hold period. They also allow you to set up something similar to bank-to-bank transfers, whereby you can pull money from an external bank account. They will usually give you instant access to at least $5-10,000 of that, but some, like Scotia iTRADE, will give you instant access to larger amounts, provided it's covered by existing, non-held deposits/account equity.

The one downside to them would be registered plan transfers whereby the transfer out fee is typically $125-150 per account. They will generally reimburse your transfer out fees when you transfer money in, if you're transferring in at least $15,000-25,000 per each account transfer. So bottom line, you will not want to "rate shop" in registered accounts and, with TFSAs, wait till December to manually withdraw your funds.

Trust that answers most if not all your questions. sf-cool

Cheers,
Doug

December 10, 2022
1:05 pm
AltaRed
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JenE said
I find this topic interesting albeit rather incomprehensible. Where should I look, or go, for “beginner” information? Also, is there any advantage to holding these accounts over ordinary high interest accounts? Any information/insights, will be appreciated.  

Doug has given you technical specifics. https://mrthrifty.ca/investment-savings-accounts-maximize-interest-in-your-brokerage-account/ gives you some Coles Notes pros/cons. At the most basic level, these ISAs are deposit accounts just like HISAs at various institutions. There is no advantage or disadvantage from that perspective.

The upside is especially for those who have brokerage accounts to begin with, where they can keep these ISAs within that account along with their ETFs, stocks, bonds, etc. sweeping new cash into these ISAs and when buying a new stock, selling some ISA units to obtain cash to buy the stock. There are not many reasons for folks who rate shop among the list of FIs to hold a brokerage account just for ISAs.

One downside of ISAs is one must have a brokerage account to buy these ISAs and getting funds into and out of brokerage accounts is not necessarily the same as me2me push/pull transfers people use with HISA institutions. Another downside is as Doug noted in terms of closing/transferring out of accounts (as compared to just withdrawing some cash) where transfer out fees are steep.

ISA interest rates tend to follow BoC interest rates. When BoC increases interest rates like they have been, ISAs pay well. When the BoC interest rate was 0.25%, these ISAs paid about 0.25%. No one cared about them back in January. ISAs are thus targeted at a different retail market than conventional HISAs at banks.

December 10, 2022
1:28 pm
Bill
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AltaRed's last point is key, no-one talked about these for years on this site until recently when for some reason they're now competitive with other high interest accounts. I'm not sure why they're offering such high rates now or what the big banks are doing with these deposits, presumably most will be re-deployed in the markets when investors think it's go-time again so they're not a stable pool of long-term money. I've speculated that with some folks cashing out of markets the brokerages want to keep that money in the brokerage accounts as otherwise it might not come back.

I've used them in the past to put my brokerage account cash into and make a bit of interest while I'm deciding what stocks, etc to buy next, I think that's kinda what they're designed for. Also for those who care about CDIC coverage but don't care about return from their cash (some folks keep large pools of money in cash just because) they provide some diversity, e.g. TD offers 4 different TD group ISAs, each with its own CDIC coverage.

I agree if you're solely an interest rate shopper for your money it's not worth opening a broker account just for these, you have enough convenient options already.

December 11, 2022
7:57 am
JenE
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Thanks all, for the information, I appreciate it and now understand much better.

December 11, 2022
8:42 am
Norman1
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For $10,000, it may not be worth opening a discount brokerage account for. But, it is for larger amounts.

Scotia iTRADE is currently offering access to the Bank of Nova Scotia ISA, Series F (DYN6004) that is paying 4.05%. Hubert Financial's Happy Savings account is currently paying 3%.

For $10,000, the +1.05% is an extra $105 per year. However, for $100,000, the +1.05% is an extra $1,050 per year.

December 11, 2022
3:42 pm
bobwatford
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I think the fact that this is held in a brokerage account and is fully marginable is key here. You can have all your cash in the ISA and if a trade comes up that you just can't ignore you have the full amount available immediately and can sell units of the ISA at any time, or not if it's just a short term trade. For day trader this thing would be great as margin interest isn't even charged if a position is bought then sold the same day.

December 11, 2022
5:46 pm
AltaRed
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That is true for folks that decide to have margin accounts and may be frequent traders. I wouldn't say the ISAs are key to that process but they are useful for that purpose. I don't do more than 2-4 trades in a year so my ISA in the brokerage account is strictly an 'investment'.

As Norman1 has suggested, there is nothing wrong with having a discount brokerage account just to hold an ISA, because it can be a material return if one is tieing up a lot of money and intends to maintain at least some minimum level of ISA investment over the long term to at least avoid account minimum fees. I just don't consider brokerage accounts as short term as one might do in a digital bank.

December 14, 2022
8:40 am
Bob
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BMO's CAD HISA is now 3.9%

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