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February 6, 2019
6:14 pm
Loonie
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Newcommer_80 said
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 !  

Yes, they want to bring in new money, and that's why they offered it to you. But they prefer to sell you things they can make more profit from. The more complicated the product, the easier it is for them to claim something for it that is not the whole truth because customers get lost in the details or can't be bothered figuring it all out. Those are the ones they are more likely to advertise.

Canada is a peculiar country in that we tend to have a kind of faith in our big banks that I think is not found in most countries. Most of these banks are almost as old as the country itself, and people find it difficult sometimes to imagine that they might be vulnerable or that they may not treat customers right.
You'll find that a number of us on this forum are more cynical - and wealthier because of it!

If you want to make money from a big bank, buy its stock and hope for the best. Customers are just a tool to enrich stockholders. That's just the way it works.

I think 3% for the USD GIC is a good deal.

February 6, 2019
6:19 pm
Newcommer_80
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Norman1 said

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.  

Hi norman , thanks for your reply . Actually he said the 3 % is for usd . When i asked for cad he said it is 2.25 for 1 year . I'm guessing the 3% is not a promotion at all , i guess they always have a high rate for usd gic which they show to customers they don't feel will buy their funds .

I'm so scared of financial advisors I'm even having a hard time believing this 3% is a genuine thing although i asked him twice 😉 . I guess i became obsessive and paranoid from how much i read about these financial advisors practices 😀 plus why don't they simply put this information online with all the details like Tangerine is doing with their 3% usd account

February 6, 2019
6:34 pm
Loonie
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i think, but am not sure, that some other forum members have gotten this deal from RBC on the USD. You should check and see. If not, ask in a separate thread if anyone has. That will give you more confidence.

You can always ask us if you're not sure about a specific offer. The odds are that someone else will know, or you can just wait until someone else tries it out and see what they say. You will get to know who you feel you can trust.

There isn't too much they can mess up with a plain GIC. I would only worry if it's market-linked or index-linked or some kind of "link" or has some other adjective in front of it and a Trademark symbol. That means it's a "product".
Make sure you can buy it directly with your US funds, and that you don't have to transfer it to Cdn and then back to US first. I think you should be able to do this, especially if the money is already at RBC.
If not, you may need a USD bank draft or else they might make you set up a chequing account you don't need, and then you'd have to buy cheques and so on. There would likely be a charge for the bank draft.

You don't have to be paranoid. These are not fly-by-night banks that will take your money and disappear. But you do have to be aware and careful. They know what they can and cannot legally do, and they have large legal departments to tell them. They also want to maintain their reputations. They like it when Canadians are sleepy and trusting, so they don't want to disturb us too much.sf-smile

Tangerine posts its rate in this case because it wants to present itself as a market leader. Tangerine has, historically, been an alternative bank that offered higher rates than the Big Five banks (TD, BNS, RBC, CIBC, BMO). RBC is only offering this rate because it is trying to compete, but it will only compete if it has to.

I'm not sure where you're from, but you may come from a country where they don't play around with rates so much. Here, they do - a lot. That's why we need this forum, to help us navigate.

February 6, 2019
6:57 pm
Norman1
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Newcommer_80 said

Hi norman , thanks for your reply . Actually he said the 3 % is for usd . When i asked for cad he said it is 2.25 for 1 year . I'm guessing the 3% is not a promotion at all , i guess they always have a high rate for usd gic which they show to customers they don't feel will buy their funds .

I'm so scared of financial advisors I'm even having a hard time believing this 3% is a genuine thing although i asked him twice 😉 . I guess i became obsessive and paranoid from how much i read about these financial advisors practices 😀 plus why don't they simply put this information online with all the details like Tangerine is doing with their 3% usd account

I suspect it's because the 3% rate for a one-year US$ GIC is indeed a special rate offered at the discretion of the branch.

That rate is above the 2.45% rate for a US$ Pay Bank of Nova Scotia one-year GIC, through Scotia iTRADE. As well, on Royal Bank's GIC rates page, the posted rate of a one-year non-cashable US$ term deposit is just 0.35%.

The US$ GIC will mature in exactly one year. At that time, there will be another opportunity for the bank branch to upsell you to mutual funds or one of their market-linked GIC's.

If the money in the US$ GIC turns out to be significant, the branch may give up and settle for a referral bonus for referring you to an RBC Dominion Securities full-service investment broker embedded in the branch. sf-laugh

February 6, 2019
7:03 pm
Norman1
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Loonie said
i think, but am not sure, that some other forum members have gotten this deal from RBC on the USD. You should check and see. If not, ask in a separate thread if anyone has. That will give you more confidence.

Johnny Cash wrote earlier in October about a special in-branch 3% one-year US$ GIC at the Royal Bank.

February 6, 2019
7:11 pm
Newcommer_80
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Norman1 said

Loonie said
i think, but am not sure, that some other forum members have gotten this deal from RBC on the USD. You should check and see. If not, ask in a separate thread if anyone has. That will give you more confidence.

Johnny Cash wrote earlier in October about a special in-branch 3% one-year US$ GIC at the Royal Bank.  

Thanks Norman, yeah i read this thread before and i even called but could not get the same deal until i went in person today i will try to ask johnny cash again on the thread

February 6, 2019
7:14 pm
Newcommer_80
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Loonie said
i think, but am not sure, that some other forum members have gotten this deal from RBC on the USD. You should check and see. If not, ask in a separate thread if anyone has. That will give you more confidence.

You can always ask us if you're not sure about a specific offer. The odds are that someone else will know, or you can just wait until someone else tries it out and see what they say. You will get to know who you feel you can trust.

There isn't too much they can mess up with a plain GIC. I would only worry if it's market-linked or index-linked or some kind of "link" or has some other adjective in front of it and a Trademark symbol. That means it's a "product".
Make sure you can buy it directly with your US funds, and that you don't have to transfer it to Cdn and then back to US first. I think you should be able to do this, especially if the money is already at RBC.
If not, you may need a USD bank draft or else they might make you set up a chequing account you don't need, and then you'd have to buy cheques and so on. There would likely be a charge for the bank draft.

You don't have to be paranoid. These are not fly-by-night banks that will take your money and disappear. But you do have to be aware and careful. They know what they can and cannot legally do, and they have large legal departments to tell them. They also want to maintain their reputations. They like it when Canadians are sleepy and trusting, so they don't want to disturb us too much.sf-smile

Tangerine posts its rate in this case because it wants to present itself as a market leader. Tangerine has, historically, been an alternative bank that offered higher rates than the Big Five banks (TD, BNS, RBC, CIBC, BMO). RBC is only offering this rate because it is trying to compete, but it will only compete if it has to.

I'm not sure where you're from, but you may come from a country where they don't play around with rates so much. Here, they do - a lot. That's why we need this forum, to help us navigate.  

Thanks a lot my friend . You are the official financial advisor of highinterestsavings.ca

February 6, 2019
7:58 pm
Loonie
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sf-embarassed

There are a lot of people here who are very knowledgeable. They just aren't all as talkative as I am!

Welcome to Canada!

February 7, 2019
6:59 am
Norman1
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I found that BMO InvestorLine is better than Scotia iTRADE for US$ fixed income. Unfortunately, their bond inventory and prices seem to be only available during trading hours.

US government treasury bills are available at BMO InvestorLine. An example is US Government treasury bills that mature in 356 days. Current price is 97.801% of face value, for a yield about 2.3% per annum. US government has DBRS rating AAA.

Also saw a Province of Manitoba US$ strip bond maturing in 338 days on January 15, 2020. Price 97.821% of face value, for a yield about 2.4% per annum. Manitoba has DBRS rating A(high).

That 3% one-year US$ GIC offered by the Royal Bank (DBRS rating AA) is quite good in comparison. sf-smile

February 7, 2019
9:11 am
Newcommer_80
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Norman1 said
I found that BMO InvestorLine is better than Scotia iTRADE for US$ fixed income. Unfortunately, their bond inventory and prices seem to be only available during trading hours.

US government treasury bills are available at BMO InvestorLine. An example is US Government treasury bills that mature in 356 days. Current price is 97.801% of face value, for a yield about 2.3% per annum. US government has DBRS rating AAA.

Also saw a Province of Manitoba US$ strip bond maturing in 338 days on January 15, 2020. Price 97.821% of face value, for a yield about 2.4% per annum. Manitoba has DBRS rating A(high).

That 3% one-year US$ GIC offered by the Royal Bank (DBRS rating AA) is quite good in comparison. sf-smile  

You are absolutely right, although the treasury bills and the Manitoba bonds are insured if I'm not mistaken?

Just went to another RBC bank and asked for further information about the 3% USD GIC and they said I have to book with advisors to further inquire! I told them I already saw one but I wanted further written information. They said they will hook me up with an advisor who could send me the information by email as the RBC cashiers don't have access to this. She even showed me the same screen page I saw yesterday which is simply a one line sentence.

I also just saw a TD advisor who told me she will get back to me tomorrow to see if they could offer better GIC rates through their trade platform. As she said the only GIC at they have for USD is 1.75% which weird enough also I could not find by online searching!

February 7, 2019
9:16 am
Newcommer_80
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Loonie said
sf-embarassed

There are a lot of people here who are very knowledgeable. They just aren't all as talkative as I am!

Welcome to Canada!  

Thanks Loonie, do you recommend I put all the USD funds with RBC in a joint account for me and my wife or do you recommend splitting them into two accounts (mine and my wife)

From what you said I guess it does not make a difference for the USD investment?

Does having a joint account makes it more complicated regarding the tax reporting later on?

I'm also thinking of splitting the USD money between Tangerine and RBC but I don't know if this is it worth or it will just increase the number of the slips and tax paper work i have to do.

February 7, 2019
9:17 am
rhvic
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Tangerine's posted rate for the US$ one year GIC is now at 2.5%, thus a drop of 0.5%. I did not get my funds to Tang in time to get 3%.

I think I'll look up the RBC US$ GIC at 3% which people here have been mentioning.

February 7, 2019
2:36 pm
Norman1
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Newcommer_80 said

You are absolutely right, although the treasury bills and the Manitoba bonds are insured if I'm not mistaken?

There's no deposit insurance on treasury bills or Manitoba bonds as they are not deposits.

However, they are direct obligations of the US federal government or the provincial government of Manitoba. Consequently, they are backed and guaranteed directly by the issuing government.

Just went to another RBC bank and asked for further information about the 3% USD GIC and they said I have to book with advisors to further inquire! I told them I already saw one but I wanted further written information. They said they will hook me up with an advisor who could send me the information by email as the RBC cashiers don't have access to this. She even showed me the same screen page I saw yesterday which is simply a one line sentence.

Sounds like that 3% rate on the one-year Royal Bank US$ GIC is some kind of special rate.

I also just saw a TD advisor who told me she will get back to me tomorrow to see if they could offer better GIC rates through their trade platform. As she said the only GIC at they have for USD is 1.75% which weird enough also I could not find by online searching!

I found something at TD U.S. Dollar & Foreign Currency Term Deposits. Click on "What TD Offers". This is the table "TD U.S. Dollar Term Deposit Rates":

USD $5,000 to
$24,999.999
USD $25,000 to
$99,999.99
USD $100,000+
Less than 30 days N/A N/A 0.85%
30 to 59 days 0.75% 0.80% 0.90%
60 to 89 days 0.80% 0.85% 1.00%
90 to 119 days 0.85% 0.90% 1.10%
120 to 179 days 0.95% 1.00% 1.15%
180 to 269 days 1.25% 1.30% 1.45%
270 to 369 days 1.50% 1.60% 1.75%
February 7, 2019
2:59 pm
Loonie
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Newcommer_80 said

Thanks Loonie, do you recommend I put all the USD funds with RBC in a joint account for me and my wife or do you recommend splitting them into two accounts (mine and my wife)

From what you said I guess it does not make a difference for the USD investment?

Does having a joint account makes it more complicated regarding the tax reporting later on?

I'm also thinking of splitting the USD money between Tangerine and RBC but I don't know if this is it worth or it will just increase the number of the slips and tax paper work i have to do.  

As I see it, the main reason for putting the USD in a joint account would be for estate purposes, if one of you died.

As regards tax reporting, technically each person is supposed to pay tax according to whatever portion of the joint account was their own money in the first place. I believe it's called "attribution". CRA allows you to report that , for example, wife owns 30% of it and husband owns 70% of it. I think if you claimed 100/0, they probably wouldn't believe you.
I am neither an accountant nor a lawyer, so can't tell you what to do. I am guessing that you brought this money with you form another country and that it would be hard to prove who "owns" it once you've brought it here - and you may not even know at this point in time. Lots of people use joint accounts without worrying too much about who owns what, technically - that much I do know. Perhaps someone else can offer an opinion on this.

Someone just reported that the Tangerine rate for the USD GIC has just gone down, so that may change your mind about where to put it. If you want to put it at RBC, I suggest you do it immediately. RBC will very likely also reduce that Special rate you were offered. Phone that fellow you talked to at RBC, tell him you want to take him up on his offer, and get him to promise you the rate will still be good, then go in and do it - if tht's what you want to do.

Even if rates were the same, I don't see much point in dividing it between Tangerine and RBC. There's no insurance either way, and you've already decided that you want to take that risk so that you can get a higher rate.
RBC is our biggest bank by quite a bit, and I don't think you'd find anyone who would think that it was a higher risk than Tangerine.

I wouldn't worry about having too many tax slips. They're very easy to process, really, and are the least of your concerns. It's when you get into the stock market that you have more headaches. CRA keeps track of all your tax slips online anyway, so you can look them up and make sure you have them all.

February 7, 2019
5:28 pm
Newcommer_80
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Thanks my friend for your valuable advice , i contacted the rbc advisor telling him to arrange an appointment. I don't think he could give me any promises as it's mentioned in the offer that it may change any time. I'm still waiting on the td advisor's reply tomorrow morning though i think they won't give me an offer better than RBC.

Still have to move the money from td to rbc. I believe a draft would be the cheapest and fastest way. Is it possible for rbc to open the gic then i transfer the money to it or does the money need to be ready for the account to be created? Thanks

February 7, 2019
6:15 pm
Loonie
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I can't speak for RBC, but I would think you'd need to have the money in hand to open a GIC. However, you might be able to use that as leverage to get your guy to commit to the rate. Tell him you're not willing to go get the money unless he can promise the rate - no harm in asking. If he can't make that promise, ask to speak to his manager and put the question to the manager - and hope this doesn't take up too much valuable time! Managers have more discretion in rates. Make sure you issue the draft to yourself, not to RBC, just in case their offer is no good by the time you get there and you need to take it somewhere else; again, it will give you a bit of leverage if it's not made out to them. And guard it very carefully. Keep the receipt separate but available. I have known TD, for example, to ask for evidence that the draft was real (as if they couldn't tell! - some of them aren't too bright - I had literally just got the draft from the bank across the street from them and had simply walked it across the street as I don't like to hang onto them), and the receipt helps. Write down all identifying info on the draft in case something happens to it - even better if you can get TD to make you a photocopy, but they may not be willing. Drafts are very hard to get reimbursed if lost, and you would need all the evidence you can muster. to do so. If you are going to put it in joint account, take your wife with you, along with her ID, and let her hang onto the receipt. I don't recommend stopping at a photocopy machine because of the high risk of accidentally leaving it in the machine when you are obviously already stressed and also the delay this would create.

February 7, 2019
6:18 pm
Newcommer_80
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Thanks a lot Loonie I'm learning a lot from you !

February 7, 2019
6:22 pm
Norman1
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Newcommer_80 said

Still have to move the money from td to rbc. I believe a draft would be the cheapest and fastest way. Is it possible for rbc to open the gic then i transfer the money to it or does the money need to be ready for the account to be created?

Not sure you'd have to move the money from TD Bank to an RBC account first. I used to be able to buy GIC's, pay for purchased stocks, and do RRSP contributions with a personal cheque drawn on another financial institution.

If it is a one-year GIC, then in effect there will be a one year hold on the funds!

I think EQ Bank is the first financial institution that requires cleared funds in a savings account with them to buy a non-cashable 3-month GIC.

February 7, 2019
6:39 pm
Norman1
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Loonie said

…. Keep the receipt separate but available. I have known TD, for example, to ask for evidence that the draft was real (as if they couldn't tell! - some of them aren't too bright - I had literally just got the draft from the bank across the street from them and had simply walked it across the street as I don't like to hang onto them), and the receipt helps.…

Unfortunately, one can't easily tell now if a bank draft is real or a counterfeit. Counterfeiters are now quite good.

Some years ago, counterfeit Bank of Montreal money orders were used to purchase computer parts. The counterfeits had all the security features replicated. One victim took the bounced money order to the BMO branch. Teller though a mistake was made in bouncing the money order.

Only way teller could tell it was not real was to look up the serial number in their register of issued money orders and drafts and see that the details didn't match.

February 7, 2019
6:41 pm
Loonie
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I should perhaps add that the above is what I would do because I tend to be overcautious.
It could be that if your draft is made out to you, not to the bank, that they will make you open a savings or chequing account with it first (USD) and then move it from there to the GIC. But, then, they might do that anyway. It depends on what their internal procedures are.

one way or another, they will want to set up avenues for you to bring them more business!

By way of example, when my spouse opened a GIC at BMO a few years ago, they insisted on a savings or chequing account as well (can't remember which). They did it automatically. There was no fee for it, although I can't remember why not. We never used the account, it never had one cent in it, and we closed it after the GIC ended in a year and we took the GIC money elsewhere for better return. It was only $1000 if I remember correctly, and I think we took it out in cash as that was the cheapest way and it's not a huge amount of money to have in your pocket. We only happened to have this GIC because , at that time, you could redeem AirMiles for BMO GICs - but that's another story - it's the only way I was ever able to get Cash for AirMiles!
I think, actually, it was a chequing account. If they insist that you open a chequing account, don't order any cheques for it unless you want them - they are expensive. They can't force you to order cheques. Sometimes it's useful to humour them, let them think you will do more business with them later - and maybe you will if the deal is right for you. However, it's very unlikely that the guy you are dealing with today will still be there in a year or two. They move them around a lot, and I guess some lose their jobs (not meeting sales targets has been a big issue) and others quit. I think it's one reason they can promise you things that aren't quite true, because they probably won't be there to deal with it when you realize the problem.

I would hope that the worst Newcommer_80 might encounter is that they would put a hold on his draft at RBC, but surely that should not ultimately affect the GIC. It's not as if he's cashing it in and running off with the cash.

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