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Which HISA FI refunds RRSP transfer fees and how much?
August 3, 2022
1:38 pm
Norman1
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HISAhopper said

But, if I told BMO Nesbit Burns that I want the 270K GIC with 2.5% interest under BMO Nesbitt Burns name then the entire 270K GIC is insured with CIPF. Not bad given the same interest rate with BMO bank!

Unfortunately, that's not how the CIPF coverage works.

CIPF essentially insures the certificate or book entry for the $270,000 GIC and not the original purchase price for the GIC. CIPF will try to replace the certificate or book entry if it went missing after the brokerage fails.

CIPF won't be involved when GIC issuer fails but BMO Nesbitt Burns doesn't fail or the certificate for the $270,000 GIC doesn't go missing.

August 3, 2022
4:20 pm
savemoresaveoften
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HISAhopper said
Thanks Norman1, I learned new thing everyday.
Apply that to the my situation, if I go to a brokerage BMO Nesbitt Burns to buy a 270K GIC for 2.5% interest and put it in my name then only 100K of 270K will be insured by CDIC assuming the GIC is issued by BMO bank.
But, if I told BMO Nesbit Burns that I want the 270K GIC with 2.5% interest under BMO Nesbitt Burns name then the entire 270K GIC is insured with CIPF. Not bad given the same interest rate with BMO bank!

I guess my 3rd option (as Loonie said above) the ON and MB CU RRSP are 100% insured, this is good as I don't need to break up into 3 chunks with multiple transfer-out fees (but the interest rate is not as good as Tang and EQ banks for the time being)  

Just think of it as there is no way you can get around the CDIC limit of $100k or Ontario CU limit of $250k, if your concern is the GIC issuer default risk.
Otherwise every one would have done it that way...

August 3, 2022
6:05 pm
HISAhopper
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Norman1 said
Unfortunately, that's not how the CIPF coverage works.

CIPF essentially insures the certificate or book entry for the $270,000 GIC and not the original purchase price for the GIC. CIPF will try to replace the certificate or book entry if it went missing after the brokerage fails.
......
.  

It's getting technical, I would not venture near the brokerage at all. Thanks Norman1 and AltaRed for trying to help.

savemoresaveoften said

Just think of it as there is no way you can get around the CDIC limit of $100k or Ontario CU limit of $250k, if your concern is the GIC issuer default risk.
Otherwise every one would have done it that way...  

This is easier to understand.

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