Most Profitable Way to Invest in ETFs | General financial discussion | Discussion forum

finance trance said
So I'll keep this as quick as possible.

I have a TFSA with Motive where I wish to keep most of my money (because of their high interest rate). I just learned today I can't invest in a robo-advisor (was thinking ModernAdvisor) with any account outside of one with that specific Robo-advisor. This is trouble because I thought I could utilize the convenience and reliability of a robo-advisor, while gaining interest on all my money in the TFSA account of my choice (Motive).

Can I use a online discount brokerage to buy ETFs with an outside account (Motive for example?) or will the same rule apply (I will have to open a TFSA with said brokerage)?

What is more confusing/frustrating is I would like a high interest rate on my TFSA account, but I can't find any information on interest rates for TFSA's offered by the robo-advisors. Do they just not accrue interest?

What do you guys do/recommend for me?

Thanks so much everyone! Stay healthy!

Jake 🙂  

Click the TFSA line to sort by high to low or low to high. For TFSA HISA just find an FI. Don't expect to find an HISA at a brokerage.

Watch for best rates and transfer out fees when choosing an FI or brokerage for TFSA.

This is not clear.......Can I use a online discount brokerage to buy ETFs with an outside account (Motive for example?) or will the same rule apply (I will have to open a TFSA with said brokerage)?

You can open a TFSA account with a brokerage to buy ETFs. Watch the brokerage for fees and charges. I have iTrade and the TFSA account is free and they have list of free trades but other than that you have to pay for every other trade. But I see others here have better options at other discount brokerages. And you will have to set up a transfer from an FI to feed funds to/from the brokerage account.

It's not clear to me what exactly you want to do.

You want to buy ETFs but you also want a HISA?

The main point of a robo-advisor is that they decide what combo of ETFs would be good, and I believe they normally make the trades to maintain that balance. One way or another, they charge a fee for this, so they are never the "most profitable" option on that score. Some robo-advisors have been criticized for veering off into boutique funds that don't really help the overall result but may be good for their marketing. So, even if you use one of them, you need to choose carefully.

However, they may be the "most profitable" if they make the decisions that you either don't want to make or don't know how to make and they follow a disciplined approach to investing and rebalancing.

If you use a discount brokerage, you will have to make these decisions yourself, and execute them yourself. There are hudreds of ETFs out there.

So, a fundamental question is whether you plan to make the investment decisions yourself and carry them out yourself. If no, go to robo. If yes, consider Couch Potato recommendations for constructing your own low cost ETF portfolio and follow them.

I doubt you can do any of this through Motive, but you could do it through a major bank. Couch Potato recommends 3 possible portfolios, one of which is through TD Bank without opening up brokerage account I believe. I'd suggest you seriously consider them if you want to do it yourself. You also need to read up on rebalancing. https://canadiancouchpotato.com/model-portfolios/

I saw a TD promotion early in the year for new RRSP/TFSA at a branch. My only option was TFSA. I deposited $1,000 in February. Monthly contributions of $25 starting in March. The bank representative asked what my risk tolerance was. I said "Today low risk". I have a Multi-Holding TFSA at a TD branch. My deposits go into a fund called TD Comfort Balanced Income Portfolio. It is a mutual fund containing mutual funds. Mutual fund symbol TDB885. If you want different risk there are funds TDB886 to TDB889. The higher the risk the higher the number. They have created a limited number of funds to accommodate many types of investors. I could buy this fund via iTRADE if I wanted. This was a test to see how mutual funds operate these days. Since I have consolidated my finances I will withdraw the funds plus the $100 bonus as soon as possible in July.

I have a friend much like my investment style. I did not know he bought 5 year GICS in the 70's. He mentioned buying bonds 2-3 years ago because they were better. I told him to stick with GICS.

I use iTRADE. More options than I can possibly use. I have a friend whose wife works for Scotia. He has a brokerage account with CIBC. He says they are the same. Do your own research to decide what is best for you. Main thing have fun.

I don't blame you for asking the questions, but your questions make it clear that you know next to nothing about TFSAs or investing. This makes you extremely vulnerable and likely to make decisions you will later regret.

Accordingly, I suggest you use a robo-advisor. This will prevent you from making the most common mistakes, which could really cost you a lot.

Unless you need to withdraw the money in order to spend it, I would forget about the TFSA HISA if I were you, for now. It doesn't sound like you have a purpose for it other than periodically taking profits. That isn't a good enough reason. Investing is a long term thing. You should just let the robo do its thing. Only take out cash if you need it.

It's probably true that you could do better on fixed income portion if you had a HISA, although not guaranteed as those rates are subject to change, but it's not worth the hassle at this point. Just let the robo look after you for now, and study your statements to learn how the robo does things.

If you insist on having a separate TFSA HISA, then there are things you need to learn about how and when to transfer your money.