US$ GIC rate | Page 3 | GIC Discussions | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
February 5, 2019
7:07 pm
Loonie
Member
Members
Forum Posts: 4608
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

A year or two ago, CBC TV did a show on these nefarious banking practices. I think it was on the programme "Marketplace", but I looked and it is no longer available online.

February 5, 2019
7:13 pm
Norman1
Member
Members
Forum Posts: 2093
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Newcommer_80 said

Wow , thanks for sharing this story! It really amazes me how a big and respected bank like TD allows such action in its name !!! Trust is the most important commodity of a bank. I have never have a complaint about thier service/aminitiea which in my opinion is one of the best in the world that i have experienced but it seems that when u invenst money with them it is a different story !

One needs to be very careful when dealing with the bank branch staff for investment advice. They are trained to sell but not necessarily also to give high quality advice.

Those who seem to be well trained in the branch, like someone with the Certified Financial Planner (CFP) designation, may be dispensing biased advice to sell, in order to meet their quota and keep their job, as mentioned in my previous post. sf-surprised

Earlier, we discussed the story of a couple who lost almost $50,000 after following the incompetent tax advice from a financial planner at a Bank of Montreal branch.

The challenge is that one won't be able to meet with what Loonie calls a "genuine adviser" unless one has at least $500,000+ or $1+ million to invest and is willing to pay for management/advice. When the client is billed $10,000+ a year for advice, the adviser knows he/she needs to do more than just call once a year to see if one is interested in making an RRSP contribution!

Unfortunately, those who don't have that much to invest or who aren't paying a management/advice fee are going to end up with some kind of salesperson trying to pass himself or herself off as "financial advisor".

February 5, 2019
7:35 pm
Loonie
Member
Members
Forum Posts: 4608
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

I think you're now reasonably well prepared to meet with these people if you want.
Let us know how it goes!

February 5, 2019
8:46 pm
Norman1
Member
Members
Forum Posts: 2093
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

According to TD Canada Trust: Money Market, TD Canada Trust branches can provide access to Government of Canada US$ treasury bills:

Government of Canada Treasury Bills (T-Bills)

Government of Canada Treasury Bills offer a client security as they are fully guaranteed by the federal government. Principal and interest is a direct obligation of the Government of Canada, no matter how much you invest. Government of Canada T-Bills are available in US dollars as well as Canadian dollars, and both are considered Canadian content within your RSP/RRIF.

Highlights:
Safest Canadian investments available in Canada, regardless of the size of the investment

Fully guaranteed principal and return if held to maturity

RSP/RIF eligible

US dollar-denominated investments are considered Canadian content for RSP purposes

Dollars to Invest/Time Horizon:
Minimum investment (at face value) is $5,000 for one month to one year
Available in Canadian and US dollars

Risk/Return:
Every aspect of the investment is guaranteed by the Government of Canada, regardless of the size of the investment.

Liquidity:
Highly liquid; may be sold at any time, with settlement within one business day

Income:
Earnings are distributed at maturity

Explore your TD Money Market investment options today
Visit any TD Canada Trust Branch

Call 1-866-222-3456 to discuss your options

February 5, 2019
10:18 pm
stoidi
Member
Members
Forum Posts: 39
Member Since:
January 25, 2019
sp_UserOfflineSmall Offline

Here's another tip. Once they find out you are going to be a doctor,

Who said doctor?

February 5, 2019
10:24 pm
stoidi
Member
Members
Forum Posts: 39
Member Since:
January 25, 2019
sp_UserOfflineSmall Offline

One needs to be very careful when dealing with the bank branch staff for investment advice. They are trained to sell but not necessarily to give high quality advice.

Exactly, because they aren’t knowledgeable of any high quality advice to give to start with. Only trained pawns of the bank by the bank.

That was my finding with a BMO adviser. I think when we left she realized I was doing better than what she could do for me. And she also realized that I could see through her BS.

February 6, 2019
2:31 am
Loonie
Member
Members
Forum Posts: 4608
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Charlotte said

Here's another tip. Once they find out you are going to be a doctor,

Who said doctor?  

That would be my understanding of the term "medical licence".

February 6, 2019
2:59 am
Loonie
Member
Members
Forum Posts: 4608
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Newcommer_80 said

Thanks for your advice. I thought RBC and TD should be financially more stable than a small bank like tangerine or western canada. I don't think there are any rates worth it at manitoba CUs. The only one i found is .75 at hubert which is very low.

Western bank of canada got back to me and said they offered 3.1% on usd but still no insurance and the procedure to open an account with them is veeery complicated as they do not have a bank branch in ontario so all the paper work and transactions should be via regular mail!

Thanks again , Really appreciate it.  

TD and RBC etc may indeed be more stable than Tangerine. Norman's point is that we don't know about Tangerine, because they have no rating. My point was that it's unlikely any of them will fail in the foreseeable future, but, if you want absolute safety, no Canadian bank can offer that in a USD account because none are insured. The best you can do is a MB CU.

Yes, the rate will be lower in a MB CU. You need to decide which you value most: better rate with no insurance but good reputation, better rate with insurance but uncertainty about rating and no insurance, or low rate with insurance and no rating.

If it were me, I would ask if TD or RBC can provide US Treasury bills or US government bonds (which will be guaranteed by US govt), and how you would do that, any fees involved etc. As far as I know, that's your only other potential option except possibly US Money Market funds. Problem is, i am not up on these things myself, so can't advise you.

Here is an example of a TD USD Money Market Fund. Returns will fluctuate. they are handy because you cn take them out at any time. Make sure you can buy them with USD and don't have to convert to Cdn first and then back to US. I am not the best person to advise you about this. Perhaps someone else can comment, especially on security and volatility:
https://www.td.com/ca/en/asset-management/funds/solutions/mutual-funds/FundCard/TD%20U.S.%20Money%20Market%20Fund%20(US$)%20-%20I?fundId=30

February 6, 2019
8:54 am
Newcommer_80
Member
Members
Forum Posts: 34
Member Since:
January 31, 2019
sp_UserOfflineSmall Offline

Norman1 said
According to TD Canada Trust: Money Market, TD Canada Trust branches can provide access to Government of Canada US$ treasury bills:

Government of Canada Treasury Bills (T-Bills)

Government of Canada Treasury Bills offer a client security as they are fully guaranteed by the federal government. Principal and interest is a direct obligation of the Government of Canada, no matter how much you invest. Government of Canada T-Bills are available in US dollars as well as Canadian dollars, and both are considered Canadian content within your RSP/RRIF.

Highlights:
Safest Canadian investments available in Canada, regardless of the size of the investment

Fully guaranteed principal and return if held to maturity

RSP/RIF eligible

US dollar-denominated investments are considered Canadian content for RSP purposes

Dollars to Invest/Time Horizon:
Minimum investment (at face value) is $5,000 for one month to one year
Available in Canadian and US dollars

Risk/Return:
Every aspect of the investment is guaranteed by the Government of Canada, regardless of the size of the investment.

Liquidity:
Highly liquid; may be sold at any time, with settlement within one business day

Income:
Earnings are distributed at maturity

Explore your TD Money Market investment options today
Visit any TD Canada Trust Branch

Call 1-866-222-3456 to discuss your options

  

Thanks for the information , i will definitely check this with the advisor . Although the fact that this is a commodity that you should sell in the future also worries me . It's not like a simple GIC where you get an extra money above ur capital which is untouched . And also even the rates are not that high , maybe less than the 3% margin

February 6, 2019
8:58 am
Newcommer_80
Member
Members
Forum Posts: 34
Member Since:
January 31, 2019
sp_UserOfflineSmall Offline

Loonie said

TD and RBC etc may indeed be more stable than Tangerine. Norman's point is that we don't know about Tangerine, because they have no rating. My point was that it's unlikely any of them will fail in the foreseeable future, but, if you want absolute safety, no Canadian bank can offer that in a USD account because none are insured. The best you can do is a MB CU.

Yes, the rate will be lower in a MB CU. You need to decide which you value most: better rate with no insurance but good reputation, better rate with insurance but uncertainty about rating and no insurance, or low rate with insurance and no rating.

If it were me, I would ask if TD or RBC can provide US Treasury bills or US government bonds (which will be guaranteed by US govt), and how you would do that, any fees involved etc. As far as I know, that's your only other potential option except possibly US Money Market funds. Problem is, i am not up on these things myself, so can't advise you.

Here is an example of a TD USD Money Market Fund. Returns will fluctuate. they are handy because you cn take them out at any time. Make sure you can buy them with USD and don't have to convert to Cdn first and then back to US. I am not the best person to advise you about this. Perhaps someone else can comment, especially on security and volatility:
https://www.td.com/ca/en/asset-management/funds/solutions/mutual-funds/FundCard/TD%20U.S.%20Money%20Market%20Fund%20(US$)%20-%20I?fundId=30  

Thanks loonie for your continuous support , i learned so many things from you , i guess at the end i will diversify my options . I will exchange 1/3 the usd to Canadian when i find a good rate and put in a cdic gic , the other third i will put in a tangerine usd gic , and the last third buy treasury bills if possible , otherwise i will just put them in TD us saving account which currently gives a rate of 1.2% ( better than nothing )

February 6, 2019
3:14 pm
Loonie
Member
Members
Forum Posts: 4608
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Good research from Norman, as always. Yes, the problem with a bond is that you don't know how much it will be worth unless you hold it to maturity. And you probably don't want to hold it to maturity, given your situation. Similarly, Money Market Fund values fluctuate.

Your 3-way split sounds reasonable to me.
I'm not sure how much money you have (and you don't need to tell us), but be aware that CDIC only covers up to 100,000 including interest to come. I think you said you were married? If so, you can put it in a joint account in case something happens to you; your wife would automatically get the money without going through the court system. Each account owner (you, your wife, and the two of you jointly) can get 100,000 CDIC coverage, for a total of 300,000. In addition, Oaken offers two legal entities (Home Trust and Home Bank) into which you can put your money, which doubles your coverage. "Oaken" is just a brand, not the legal depository.

You might be wise to shop around for conversion rates when you put some of your money into Cdn dollars before you buy the GIC. The bank that offers the GIC may not have the best conversion rate, which matters if it is a large sum.

February 6, 2019
4:08 pm
Newcommer_80
Member
Members
Forum Posts: 34
Member Since:
January 31, 2019
sp_UserOfflineSmall Offline

Hi guys

Just to update you , i went and met an rbc advisor , he first started to convince me about two funds they have

- RBC us monthly income fund ( low - moderate risk)
- RBC select very conservative portfolio ( low risk )

He told me those have a mix of us bonds and funds. Of course he recommended the 1st one showing me that interest has reached 10 % in some year.

I told him frankly i'm looking for something with zero risk and that tangerine already offers 3%. then he magically opened a promotional offer of rbc on his screen ! He said they also offer 3% for 1 year GIC!! When i told him i couldn't find this information online he said that i should be able to find it and it is weird i could not find it !!! Then when i asked the question in a different way , he said this is a branch only offer ! But he said i may find this information in a different link from the one he is showing me as this page is only an internal bank web page ( in other words , he was lying ! )

Anyway i guess i will put the money in the rbc 1 year gic because i believe they are safer than tangerine . I'm still waiting to meet with td advisor , who knows maybe he will magically show me another gic rate that is not visible to me 😉

February 6, 2019
4:35 pm
Newcommer_80
Member
Members
Forum Posts: 34
Member Since:
January 31, 2019
sp_UserOfflineSmall Offline

Loonie said
Good research from Norman, as always. Yes, the problem with a bond is that you don't know how much it will be worth unless you hold it to maturity. And you probably don't want to hold it to maturity, given your situation. Similarly, Money Market Fund values fluctuate.

Your 3-way split sounds reasonable to me.
I'm not sure how much money you have (and you don't need to tell us), but be aware that CDIC only covers up to 100,000 including interest to come. I think you said you were married? If so, you can put it in a joint account in case something happens to you; your wife would automatically get the money without going through the court system. Each account owner (you, your wife, and the two of you jointly) can get 100,000 CDIC coverage, for a total of 300,000. In addition, Oaken offers two legal entities (Home Trust and Home Bank) into which you can put your money, which doubles your coverage. "Oaken" is just a brand, not the legal depository.

You might be wise to shop around for conversion rates when you put some of your money into Cdn dollars before you buy the GIC. The bank that offers the GIC may not have the best conversion rate, which matters if it is a large sum.  

Thanks for the advice loonie. Both me and my wife have power of attorney over each others' accounts. My understanding this is the same as having a joint account? And give u the right to access the other account in case something god forbid happens.

Regarding the US Dollar i don't think it would make a difference if i distribute the amount between me and my wife . As there is no insurance for USD regardless of the amount .

I'm not sure though if i should open two gic accounts under my personal account in case i need emergency access to the money for unexpected reasons?

Does opening 2 personal gic accounts in RBC for example mean i get two T5 slips ? Or they i will get one slip with the sum of the two accounts . I don't want to increase the paper work i do when i file my taxes.

Thanks for your comments

February 6, 2019
5:11 pm
Loonie
Member
Members
Forum Posts: 4608
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

The authority of a Power of Attorney ends immediately when the person who issued it dies.
Hence, it does not protect your wife upon your death. For that, a joint account works best.

If you die and you don't have a joint account, the money gets moved to an account owned by "The Estate of (Your Name)" as soon as the bank finds out you have died. Your wife would have to see a lawyer (fees involved), pay probate tax, wait for the court to grant probate (takes a few months in Ontario), and then claim the money from the bank, assuming you have a will naming her as your sole beneficiary. All of this can be avoided with a joint account. At RBC in particular (I know this because I had to go through this a year ago with them), they would ask for an original death certificate (these are provided as part of the costs of burial) and for your wife's ID and then they would still want to delay it on the assumption you might have more money coming into the account, on pre-authorized deposit or death benefits, and then they would change it over to her name. There is no fee for this.
You can confirm this information by asking your bank advisor. There is no reason they shouldn't tell you the truth on this particular question, unless they simply don't know. - which is always possible.

Regarding the possibility of 2 GICs at the same bank, you need to realize that a bank like RBC will have several legal entities (in the same way that Oaken has two). Without checking, I would guess that RBC probably has about 5 or so. If you have two GICs with them, and they are both issued by the same entity, they will issue one tax slip for the both of them almost certainly. If they are issued by two different entities, then you will get two slips, and each will likely be separately insured under CDIC, giving you more coverage.
To better understand what I am saying, take a look at the list of CDIC-insured financial institutions: http://www.cdic.ca/en/about-di.....gLKYPD_BwE

You should certainly keep some money liquid in savings account for emergencies.

It seems there are a lot of important things we don't tell you when you immigrate to Canada!

February 6, 2019
5:22 pm
Norman1
Member
Members
Forum Posts: 2093
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Norman1 said
According to TD Canada Trust: Money Market, TD Canada Trust branches can provide access to Government of Canada US$ treasury bills:

Newcommer_80 said

Thanks for the information , i will definitely check this with the advisor . Although the fact that this is a commodity that you should sell in the future also worries me . It's not like a simple GIC where you get an extra money above ur capital which is untouched . And also even the rates are not that high , maybe less than the 3% margin

Treasury bills (US Government and Government of Canada) don't have to be sold. If one holds them to maturity, they will be redeemed by the issuer.

Yes, they work a bit differently. With treasury bills, the value at maturity is fixed with the purchase price varying. With GIC's, the value at maturity varies with the purchase price being fixed. But, the effect is the same.

With a treasury bill, one purchases at a discount to its face value. At maturity, issuer redeems the treasury bill at face value. The difference between the purchase price and the face value is the interest.

For sure, one will likely not get 3% right now with one-year Government of Canada US$ treasury bills. Both the Government of Canada and the US federal government have a DBRS rating of AAA, the highest rating. The wholesale yield (no commissions) of one-year US federal US$ treasury bills is currently 2.56%.

The lower yield is the cost of having something that is a direct commitment of the Government of Canada or of the US government to pay and pay on time. In contrast, CDIC insurance guarantees that the deposit principal and interest will eventually be paid, but not paid on time.

February 6, 2019
5:26 pm
Newcommer_80
Member
Members
Forum Posts: 34
Member Since:
January 31, 2019
sp_UserOfflineSmall Offline

Loonie said
The authority of a Power of Attorney ends when the person who issued it dies.
Hence, it does not protect your wife upon your death. For that, you need a joint account.

If you die and you don't have a joint account, the money gets moved to an account owned by "The Estate of (Your Name)" as soon as the bank finds out you have died. Your wife would have to see a lawyer (fees involved), pay probate tax, wait for the court to grant probate (takes a few months in Ontario), and then claim the money from the bank, assuming you have a will naming her as your sole beneficiary. All of htis can be avoided with a joint account.
You can confirm this information by asking your bank advisor. There is no reason they shouldn't tell you the truth on this particular question, unless they simply don't know. - which is always possible.

Regarding the possibility of 2 GICs at the same bank, you need to realize that a bank like RBC will have several legal entities (in the same way that Oaken has two). Without checking, I would guess that RBC probably has about 5 or so. If you have two GICs with them, and they are both issued by the same entity, they will issue one tax slip for the both of them almost certainly. If they are issued by two different entities, then you will get two slips, and each will likely be separately insured under CDIC, giving you more coverage.
To better understand what I am saying, take a look at the list of CDIC-insured financial institutions: http://www.cdic.ca/en/about-di.....gLKYPD_BwE

You should certainly keep some money liquid in savings account for emergencies.

It seems there are a lot of important things we don't tell you when you immigrate to Canada!  

Thanks a lot for sharing all this information , i would definitely go with the joint account in the usd account so we both could have access too .

But regarding to Canadian dollar account wouldn't opening a joint account be limited to the cdic maximum 100 thousand ? So if i have for example 200 thousand cad and i put in a joint account the only 100 would be covered , otherwise if i only put a 100 then the rest wont be accessed by both of us ?

Regarding legal entities , what do u mean by that ?

Thanks in advance , yes for sure the Canadian bank system is much different than back home . Its taking a lot of reading to keep up but this forum has been very helpful because as you said before today with the advisor meeting i felt i'm dealing with an door to door sales person rather than a professional banker

February 6, 2019
5:46 pm
Loonie
Member
Members
Forum Posts: 4608
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Yes, it does mean that if you had 200K in a joint account and/or joint GIC, only 100K of it would be covered by CDIC.

Note too that it is not the GIC itself that determines the limit, but it is the sum of all the insurable funds that you have that are held by the same entity. Thus, you could have a savings account plus a GIC, the total with interest amounting to 120K, but only 100 would be covered.

"Entity" just means a legal corporate body in this case. RBC consists of several legal corporations, all or most of which carry CDIC coverage. See that list I referred you to for their various names. You might, for example, have a GIC held by Royal Bank of Canada and another one (or a bank account) held by Royal Bank Mortgage Corporation (or whatever it's called). These would be two separate entities legally and in terms of insurance. It doesn't matter which one you use except in terms of insurance and the number of tax slips you will get.

For example, several years ago, I had several short-term GICs at TD bank. The person who served me wanted to put all of them into the same entity, but I insisted they be divided among 2 or 3 entities so as to protect my insurance. Not all products will be available through all entities, but they will accommodate your request if you insist, to the extent they can. They will very likely express surprise that you could even raise the possibility that their bank might go under, as none of them think this is possible. they might be right, but it's your money and your prerogative.

They're not all like door-to-door salesmen, but you need to realize they are under pressure to sell products, and they have to meet sales targets, and they are not legally required to give you advice that is in your best interests. Some of them probably try to do their best for you, but they are in a conflict of interest because they must do what's best for the bank. Many of the people who work at the credit unions have told me that they used to work at one of the big banks and left because they were uncomfortable with the pressure and with being expected to sell things that were not necessarily in the best interests of their clients. We have the Latin expression, "caveat emptor" - "buyer beware" - which applies here. Perhaps you've heard this? I'm just advising you to be cautious.

February 6, 2019
5:56 pm
Norman1
Member
Members
Forum Posts: 2093
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Newcommer_80 said

Just to update you , i went and met an rbc advisor , he first started to convince me about two funds they have

- RBC us monthly income fund ( low - moderate risk)
- RBC select very conservative portfolio ( low risk )

He told me those have a mix of us bonds and funds. Of course he recommended the 1st one showing me that interest has reached 10 % in some year.

Don't get taken in by the sleight-of-hand with the monthly income funds. They snag people, especially GIC investors, who don't realize that the yield or payout rate is not always the same as the rate of return. See my previous post about that and how some of that payout is actually a tax-free return of part of the original investment.

I told him frankly i'm looking for something with zero risk and that tangerine already offers 3%. then he magically opened a promotional offer of rbc on his screen ! He said they also offer 3% for 1 year GIC!! When i told him i couldn't find this information online he said that i should be able to find it and it is weird i could not find it !!! …

Is that 3% special rate for a one-year C$ GIC or a one-year US$ GIC?

3% would be pretty good for a one-year Royal Bank of Canada US$ GIC. Like the Bank of Nova Scotia, Royal Bank of Canada currently has a DBRS rating of AA.

February 6, 2019
5:57 pm
Loonie
Member
Members
Forum Posts: 4608
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

I made some edits in my last post to make it easier to understand (I hope).

Norman is very knowledgeable about these things, and I think he knows all their tricks, so pay attention to him!

I bet the guy who saw you knew very well that this rate could not be found on RBC's website. He probably has a hierarchy of things he will try to sell you, with the most profitable (for him) at the top.

3% is a good one-year rate though, whether Cdn or US, for a bank like RBC.

February 6, 2019
5:58 pm
Newcommer_80
Member
Members
Forum Posts: 34
Member Since:
January 31, 2019
sp_UserOfflineSmall Offline

Thanks a ton , what do you think of the 3% rbc gic for usd ? Why do you think they hide it from people ? Isnt the whole idea of a bank is to bring money in for various reasons of invesment !

No permission to create posts

Please write your comments in the forum.