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Investment Savings Account (ISA) Interest Rates
July 15, 2022
11:35 am
Dean
Valhalla Mountains, British Columbia
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.
I don't know if anyone else here has noticed, but savings account interest rates in Investment Accounts (for stocks, mutual funds, etc.) have gone 'Waaay Up' lately ... finally following the overall trend.

As an example, TD WebBroker's Investment Savings Account (ISA) interest rates have recently gone up to 1.85% for CAD, and 1.20% for USD . . .

.
For a comparison ... this time last year ISA interest rates were down in the
0.20% / 0.15% areas.

A welcome improvement ❗

    Dean

sf-cool " Live Long And Prosper " sf-cool

July 22, 2022
8:20 pm
hwyc
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Data point - 2.25% for CAD starting today (footnote 2 on Dean's link).

July 22, 2022
8:31 pm
AltaRed
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My EQ Bank HISA funds are headed to BMO Investorline (BMTxxx series) and Scotia iTrade DYN5000 or DYN6000 next week @ 2.25% if EQ doesn't make a move Monday or Tuesday.

July 23, 2022
8:54 am
dougjp
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AltaRed said
My EQ Bank HISA funds are headed to BMO Investorline (BMTxxx series) and Scotia iTrade DYN5000 or DYN6000 next week @ 2.25% if EQ doesn't make a move Monday or Tuesday.  

This link seems to show up to date rates on these kind of accounts.

https://mrthrifty.ca/investment-savings-accounts-maximize-interest-in-your-brokerage-account/

Correct me if I'm wrong, but don't I need to have a discount brokerage or other investment account with these banks to buy these "savings accounts", as they are funds with trading fees unless the bank decides to view them as "captive" savings accounts?

In other words, lets say my investment account is at CIBC, where lately their savings account from Renaissance has been lagging behind in raising their rates. What if any no fee options exist when funds are "trapped" within a RRIF/TFSA/RRSP?

The one thing that unites all human beings is that, deep
down inside, we ALL believe that we are above-average drivers.

July 23, 2022
9:15 am
AltaRed
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These ISAs are deposit accounts sold in brokerages (DIY discount or full service) under the mutual fund platform. So, yes, one must have a brokerage account to purchase these things. Most of the big bank brokerages will limit their clients to their in-house brand... which is usually not a big deal since rates are generally the same most of the time. Timing of changes between the offerings can vary of course. I think in the latest round moving to 2.25%, Scotia was one of the earlier ones to go to 2.25% with TD and BMO following a day or so later. I don't know when RBC made their shift and I don't follow CIBC at all (I expect the CIBC offering to move to 2.25% from 1.85% pretty quickly to follow their competitors).

There are no commissions to buy/sell units in at least the in-house options, i.e. I buy BMO's offerings in BMO Investorline for no buy/sell fees. I can't speak to which of these ISAs are available in independent brokerages or whether there are buy/sell commissions.

As for registered accounts, funds are obviously generally 'trapped' as you put it but that is the case in any financial institution without going through the 'formal' transfer processes. I'd much rather have my registered accounts at brokerages where at least there is likely to be more options available to purchase.

P.S. I have never had (and never will have) a registered account at any individual institution like those on the HISA or GIC charts. I object to the concept of being (or feeling) trapped.

July 23, 2022
10:33 am
Norman1
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A mutual fund dealer would be able to sell these ISA's which are packaged like mutual funds units.

There may not be interest in handling small purchases as the trailer to the dealer isn't much. Around ¼% per annum. The Scotiabank ones pay the dealer 0.10% to 0.15% per annum.

There may not be trading fees for these ISA's. But, there will be account fees at many of the discount brokers for small accounts. BMO InvestorLine charges $25 per quarter for non-registered accounts less than $15,000. Scotia iTRADE charges a low activity admin fee of $25/quarter when client has less than $10,000 with them and there isn't a commissionable trade in the quarter.

July 23, 2022
11:31 am
savemoresaveoften
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these are just the old money market funds if I am not mistaken.
cash balance at dealers are still earning a big zero.

July 23, 2022
11:42 am
Dean
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savemoresaveoften said

these are just the old money market funds if I am not mistaken.
cash balance at dealers are still earning a big zero.  

Yes, cash balances at most dealers are still earning 'Nada' ... but ISAs are not MM funds. ISAs are CDIC insured SAs.

Dean

sf-cool " Live Long And Prosper " sf-cool

July 23, 2022
11:49 am
Dean
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hwyc said

Data point - 2.25% for CAD starting today (footnote 2 on Dean's link).  

Thanks for that update, Hwyc. I just noticed it today.

No change for most USD ISAs though, as they are still in the ~1.20% area.

Dean

sf-cool " Live Long And Prosper " sf-cool

July 23, 2022
2:57 pm
AltaRed
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savemoresaveoften said
these are just the old money market funds if I am not mistaken.
cash balance at dealers are still earning a big zero.  

As Dean said, these are not mutual fund trust structures (MMF) that issue T3 tax slips. These are true CDIC insured deposit accounts that issue T5 tax slips like any other bank account.

While it is true cash balances earn nothing, there is no reason to have a cash balance in a brokerage with these ISAs. ISAs settle T+1 while stocks, bonds and most mutual funds settle T+2. That way an asset purchase can be made BEFORE one actually has to sell some of their ISA to pay for it.

July 23, 2022
3:06 pm
Greedy Guy
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Dean said

Thanks for that update, Hwyc. I just noticed it today.

No change for most USD ISAs though, as they are still in the ~1.20% area.

Dean  

1.4% ISA in USD at BMO Investorline

July 23, 2022
3:30 pm
dougjp
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AltaRed said

As Dean said, these are not mutual fund trust structures (MMF) that issue T3 tax slips. These are true CDIC insured deposit accounts that issue T5 tax slips like any other bank account.

While it is true cash balances earn nothing, there is no reason to have a cash balance in a brokerage with these ISAs. ISAs settle T+1 while stocks, bonds and most mutual funds settle T+2. That way an asset purchase can be made BEFORE one actually has to sell some of their ISA to pay for it.  

Thanks AltaRed. Both your posts # 5 and # 10 are highly informative and detailed, which I'm sure others will appreciate too. Banks don't want to talk about "such" things, it seems, for obvious reasons!

With my non registered investment accounts, I withdraw all money out the day it arrives (eg; dividends), and then onward to HISA accounts elsewhere. However the TFSA and especially the RRIF are a real pain, having no other options to earn anything on deposit funds (except buying stocks/ETFs/Mutual Funds etc.)

The one thing that unites all human beings is that, deep
down inside, we ALL believe that we are above-average drivers.

July 23, 2022
4:25 pm
AltaRed
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Not sure I understand your last bit. These ISAs can be purchased in registered accounts too.

July 23, 2022
4:30 pm
dougjp
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AltaRed said
Not sure I understand your last bit. These ISAs can be purchased in registered accounts too.  

Sorry, I meant there is no practical option to buying the "captive" ISA, meaning if the rate isn't competitive then I have to live with it.

And in the case of Renaissance ISA at CIBC, trading is in a minimum $ 1,000- size, which adds another nuisance routine. If I have less than that in cash and want to add to an existing ISA, then I have to sell to create a $1k+ balance, then buy.

The one thing that unites all human beings is that, deep
down inside, we ALL believe that we are above-average drivers.

July 23, 2022
5:07 pm
savemoresaveoften
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dougjp said

Sorry, I meant there is no practical option to buying the "captive" ISA, meaning if the rate isn't competitive then I have to live with it.

And in the case of Renaissance ISA at CIBC, trading is in a minimum $ 1,000- size, which adds another nuisance routine. If I have less than that in cash and want to add to an existing ISA, then I have to sell to create a $1k+ balance, then buy.  

I am looking at the Renaissance, looks like all these ISA has no minimum holding period either ? So its exactly like a HISA essentially, yes there is a embedded fee but also no trading commission ? Will work well for $ inside RRSP as a short term parking space.

July 23, 2022
5:10 pm
savemoresaveoften
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Dean said
.
I don't know if anyone else here has noticed, but savings account interest rates in Investment Accounts (for stocks, mutual funds, etc.) have gone 'Waaay Up' lately ... finally following the overall trend.

As an example, TD WebBroker's Investment Savings Account (ISA) interest rates have recently gone up to 1.85% for CAD, and 1.20% for USD . . .

.
For a comparison ... this time last year ISA interest rates were down in the
0.20% / 0.15% areas.

A welcome improvement ❗

    Dean

  

Thanks Dean for pointing it out !

July 23, 2022
6:42 pm
Bill
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Used to be with these you had to put in your buy or sell order with your discount brokerage before 3:00 pm or so to be filled the next day, haven't checked lately to see if that's still the case.

July 24, 2022
8:43 am
Dean
Valhalla Mountains, British Columbia
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savemoresaveoften said

Thanks Dean for pointing it out !  

Note that the CAD ISA rate at TD WebBroker has since been Increased
to 2.25%. sf-smile

    Dean

.

Bill said

Used to be with these you had to put in your buy or sell order with your discount brokerage before 3:00 pm or so to be filled the next day, haven't checked lately to see if that's still the case.  

That's how it still works at TD WebBroker ... it's a CDIC insured SA,
but for Buys & Sells they use the mutual fund system.

    Dean

sf-cool " Live Long And Prosper " sf-cool

July 24, 2022
10:03 am
agit
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Dean said

Note that the CAD ISA rate at TD WebBroker has since been Increased
to 2.25%. sf-smile

    Dean

  

I was buying TDI TD 1Y CASHBL Cashable GIC after 30 days @2.00% will sell and buy TDB8150. Keep your eyes on the TDI cashable GIC it was much better then TDB8150 until now. thx hwyc & Dean for the info

July 24, 2022
10:14 am
Dean
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.
Agit ...

If you can hang-tough for 90 days (or more), Hubert has a much better short-term deal https://www.happysavings.ca/products/terms/one-year-terms/

    Dean

sf-cool " Live Long And Prosper " sf-cool

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