US Treasury Bills - where can we buy in Canada | Page 4 | GIC discussions | Discussion forum

Questrade will have a range of corporate and government bonds for sale, both investment grade and high yield (junk) but their inventory at any given time will not be as extensive as the big 6 banks. The inventory and yield will also change daily.

You would have to sort through their list yourself to see what, if anything, works for you. Never buy anything less than BBB credit quality and none of them are as risk free as CDIC insured deposits, though AA or AA+ is essentially just as good for practical purposes.

I would recommend doing some research on bonds and the nuances of buying and selling them before dipping into them.

zgic said
Thanks Norman1 & AltaRed

@AltaRed: So looks like I cannot get 3.80% CDIC insured GIC rate from an AAA bond. Also chatgpt said that the CDIC insured GIC is my best option right now for the yield and security.  

Bonds are not CDIC insured. I would rank GOC bond as slightly more secure than a CDIC insured GIC within the limit, although it can obviously show a temporary loss while GIC would mask it. Would expect slightly higher yield from the “best” GIC. You don’t get liquidity.

zgic said
@AltaRed: So looks like I cannot get 3.80% CDIC insured GIC rate from an AAA bond. Also chatgpt said that the CDIC insured GIC is my best option right now for the yield and security.  

A GoC bond is as secure as a GIC within CDIC insured limits given that it is ultimately the GoC that could be the backstop of last resort to CDIC in the event of a large FI failure anyway.

I don't compare GIC rates with GoC bond yields very often since I buy neither and it is only curiosity on my part to do the comparison, but what I tend to see is GIC yields slightly better than equivalent GoC yields more often than less. I attribute that to FI competition (or not) for deposit funds in the retail market to fund their loan business, and the fact that GICs are effectively illiquid during their term while bonds are always sellable (liquid) back to the dealer, albeit usually at a costly discount (bid-ask spread).

FWIW, the bond market is huge with bonds being bought and sold every millisecond of the business day, just that they normally are not by the retail market except through bond funds (mutual and/or ETF).

zgic said

@mordko: I am not sure how much liquidity plays part in fixed income. Because if I am planning to buy and sell a bond than I might as well get into Equities. As I have to do research of future rates etc.
What you'll think about the variables which will go in fixed income?
I think Fixed Income = Yield + Risk (what else do we add)?  

Liquidity might not matter to you personally but it does to a lot of people. Thats why people use HISAs (for example). Equities are not a direct replacement for any type of fixed income, full stop.

And even if one does not plan on it, being able to sell a bond in an emergency is an advantage. I think thats the key reason for GICs offering slightly better rates than GOC bonds. Also, bonds are more convenient for large amounts, so you pay for convenience but suspect that GIC’s illiquidity is the main reason for this delta.

zgic said

@AltaRed: You don't buy GoC bonds or GICs (or No bonds at all?) - interesting.
So is there any vehicle you use for fixed income or you do not need that option all together?
Thanks  

Short answer is I don't need much fixed income. I have a small DB pension which covers a portion of fixed monthly costs so that serves as a substitute for fixed income. If that was not the case, I probably would have annuitized a portion of my investment holdings to provide more than what CPP can cover on its own.

I keep a limited (relatively fixed) amount of 'cash equivalents' to mitigate downturns in capital markets but otherwise do not hold a fixed income component of bonds or term deposits. The 'cash equivalents' are money market mutual funds and brokerage ISAs that I do not need to keep track of, manage, etc.

norman1: BAIL-IN - so are these what we used to know as "convertible bonds?" Or are the conditions more restrictive?

RetirEd said
norman1: BAIL-IN - so are these what we used to know as "convertible bonds?" Or are the conditions more restrictive?

No, the bail-in bonds are different.

Convertible bonds are bonds that can be converted to shares, at the choice of the bondholder.

Bail-in bonds can be converted to common shares, at the choice of the issuer, against the wishes of the holder, after a triggering event. For example, after OSFI has declared the issuer to be no longer a viable bank.

Thanks, Norman1.