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$USD Canada Based Savings Account
January 7, 2020
4:33 pm
Nehpets
Ontario
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Joe said
TD bank money market fund TDB8152 is paying 1.2% USD. I buy in/out using my TD brokerage account (no charge)....I'm sure most banks have their own MMF paying the same. I use to park USD at Hubert up until about 9 mths ago.  

(Source of original post)

Back in 2018 08 TDB8152 was a worthwhile option that I took advantage of.

Update as of today, the TDB 8152 is 0.95% only marginally higher than Hubert's 0.75%

Any suggestions as to a better paying option for a Canada based USD savings account?

Stephen

January 7, 2020
6:44 pm
Doug
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Hi Stephen,

I feel compelled to correct Joe's quoted text in your post. TDB8152 is not, specifically, a money market fund. It's a common and easy mistake to make, though, since it appears on your brokerage statements as a "money market", "cash equivalent", etc., and because it has a fund code like mutual funds and money market funds. However, money market funds are not CDIC insured and, while they do tend to maintain a constant Net Asset Value (NAV), it's not guaranteed. The returns on money market funds are sub 1%, typically, so it's typically not worthwhile. As well, in a money market fund, you are pooling your money together into a fund with other investors.

TDB8152, by contrast, is an investment savings account. It's true that the funds may not be set up in a separate numbered account in your name (they're not), but the financial institution still has to report the beneficial owner (your brokerage firm or trust company, in the case of non-registered accounts) to CDIC and your brokerage firm has to report to the firm and/or CDIC the names of its clients which hold that product. This is how nominee form savings accounts work. The reason it has a fund code is because it trades, at the end of the day, through the FundSERV platform used by brokerage and financial advisory firms.

Cheers,
Doug

January 7, 2020
7:57 pm
Bud
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Whats the best one rbc investment savings?

GIC King

January 8, 2020
9:27 am
Koogie
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I gave up on TDB8152 as well.

Using CIB483 nowadays. Yield is better but usual caveats apply.

edit: bought CIB483 through my usual account at TDDI.

January 8, 2020
5:33 pm
Joe
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I have been using TDB166, USD money market fund.....no charges in/out, yield is now 1.53%.....it was over 2% a few months ago.

January 9, 2020
8:45 am
Doug
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Joe said
I have been using TDB166, USD money market fund.....no charges in/out, yield is now 1.53%.....it was over 2% a few months ago.  

TDB8166 (https://www.td.com/ca/en/asset-management/funds/solutions/mutual-funds/FundCard/TD U.S. Money Market Fund (US$) - I?fundId=30) is an example of a USD money market mutual fund in that it is a mutual fund that holds a basket of very short term fixed income securities in cash and investors hold, indirectly, an interest in said securities proportionate to their holding of units of the fund. The MER is ~0.50%, but since it does maintain a constant net asset value, this is less of a concern. As well, money market funds are even more susceptible to the bond market movements, so if rates fall, the yield may fall at an outsized rate in comparison to GIC rates. Not a huge deal, but something to be aware of.

TDB8152 identified above, though, is a broker-held investment savings account with a fundcode, not a money market fund.

Cheers,
Doug

January 14, 2020
6:33 am
Bud
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GIC King

January 14, 2020
7:58 am
Norman1
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If one has an adviser, whom one is paying separate fees to, the Series F units of the Bank of Nova Scotia US$ ISA (DYN6005) are currently yielding 1.10%.

Otherwise, the Series A units (DYN6001) pay 1.0% for balances of US$100,000 or more. For balances under US$100,000, the rate is 0.85%.

January 14, 2020
9:59 am
Jowett
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Would you know if it is possible to purchase the DYN6001 in a USD account at Scotia itrade? I cannot see it as an option in their MF section.

January 14, 2020
11:35 am
Bud
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Any way to get around F series rules without payin fee?

GIC King

January 14, 2020
5:46 pm
Norman1
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Jowett said
Would you know if it is possible to purchase the DYN6001 in a USD account at Scotia itrade? I cannot see it as an option in their MF section.

It appears to be possible. No warning when I enter the symbol in the Scotia iTRADE mutual fund order entry page.

Just enter the mutual fund symbol DYN6001, for The Bank of Nova Scotia ISA, or DYN5001, for the ADS Canadian Bank ISA.

Product descriptions are at Scotiabank Advisor Deposit Services: New Tiered ISAs.

January 14, 2020
6:04 pm
Joe
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January 15, 2020
11:25 am
Jowett
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Norman 1

Thanks, I tried entering as you suggested, it worked as far as "preview order" but then regected due to my USD cash optimum a/c is limited to bonds, fixed inc mutual funds and money market funds.
I suppose I will have to put aside the afternoon to trying to reach them by phone.

January 15, 2020
12:06 pm
AltaRed
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Joe said
This may be of interest to those with a USD trading account.

https://seekingalpha.com/article/4315217-investment-where-to-park-cash-and-get-yield?app=1&isDirectRoadblock=false&utm_medium=email&utm_source=seeking_alpha  

Thanks much for the link. I was aware MINT was the 'go to' but first time I have seen this depth of analysis. Seriously going to consider this for USD currently earning about 0.85%. Have to do the math on cost of amortizing 2 $10 commissions first.

January 15, 2020
12:07 pm
AltaRed
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Jowett said
Would you know if it is possible to purchase the DYN6001 in a USD account at Scotia itrade? I cannot see it as an option in their MF section.  

Yes, or the equivalent DYN5001. They don't show in the list of mutual funds because they are not mutual funds. They are deposit accounts bought and sold using the 'mutual fund vehicle'. I own DYN5001.

Added: Jowett. The iTrade Cash Optimizer accounts will not allow you to buy such products in them. You have to have the Cash acccount. I closed the Cash Optimizer account years ago because the only value was miniscule interest on loose cash in account. No reason to have that when you can buy the DYN series of funds for interest on cash.

January 15, 2020
5:58 pm
Norman1
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Jowett said

Thanks, I tried entering as you suggested, it worked as far as "preview order" but then regected due to my USD cash optimum a/c is limited to bonds, fixed inc mutual funds and money market funds.
I suppose I will have to put aside the afternoon to trying to reach them by phone.

I was able to preview my order. But, I was using one of my cash accounts.

As AltaRed wrote, I tried with my Cash Optimizer account and got this error when I tried to preview my order:

Trading in the cash optimizer investment account is limited to bonds, fixed income mutual funds and money market mutual funds. For further assistance, please call customer service.

Contact Scotia iTRADE to see if it is intentional.

It is possible that someone just missed adding the Bank of Nova Scotia ISA's and the ADS Canadian Bank ISA's to the list of allowed products for the Cash Optimizer account.

One could open a Cash account. As long as one has "total account equity at Scotia iTRADE greater than $10,000", their $25/quarter per account Low Activity Account Administration Fee is waived.

January 15, 2020
6:28 pm
Joe
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AltaRed said

Thanks much for the link. I was aware MINT was the 'go to' but first time I have seen this depth of analysis. Seriously going to consider this for USD currently earning about 0.85%. Have to do the math on cost of amortizing 2 $10 commissions first.  

You're welcome....
write to PDF asap, as it will be behind a paywall any day now. The many comments in that link are worth a read through.

January 15, 2020
6:35 pm
Joe
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AltaRed
You may find some useful info in this link (2018) as well, again the comments are worth a read.

https://seekingalpha.com/article/4183310-are-your-best-choices-for-holding-cash

January 16, 2020
7:42 am
Norman1
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AltaRed said

Thanks much for the link. I was aware MINT was the 'go to' but first time I have seen this depth of analysis. Seriously going to consider this for USD currently earning about 0.85%. Have to do the math on cost of amortizing 2 $10 commissions first.

The analysis means very little. Just lots of fluff about past returns.

MINT is actually a short-term bond fund and not really a cash replacement. If one looks at the total return graph closely, one can see periods of zero and negative returns where the line flattens or heads downward. That's not a pattern of cash or a cash deposit.

If one looks at the PIMCO Enhanced Short Maturity Active Exchange-Traded Fund information page, one sees that the current yield of 2.44% is misleading.

The SEC 30-day yield is just 1.94%. The yield to maturity is 2.07%. Yield to maturity below current yield means one has paid more than 100% of face value for a bond and one will have a capital loss at maturity when the bond is redeemed for 100% of face value.

If one is willing to lock in for a short period, Scotia iTRADE has one-year Bank of Nova Scotia US$ GIC's available:

Issuer 1 year 2 year 3 year 4 year 5 year DBRS
Rating
Purchase
Minimum
US Pay Bank of Nova Scotia 1.5100 1.6400 1.7100 1.7800 1.8700 AA $1000
January 16, 2020
2:12 pm
AltaRed
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I am aware of the USD GICs at Scotia iTrade. Not willing to commit USD cash that long.

As for the ETFs, I fully understand the nature of the beasts. Duration is a key number and is pretty high for MINT at 0.48. I'd expect cash equivalent to have duration of about 0.083 (30 day commercial paper) or maybe upwards of 0.12 that holds 3 month T bills or in the case of FLOT and FLRN, floating rate ST notes, options, etc. None of that is true cash of course.

Regardless, the Seekng Alpha materials do provide some clarity on choices. Nothing comes for free.

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