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Investment Savings Account (ISA) Interest Rates
July 24, 2022
10:34 am
agit
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Dean said
.
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

  

Those are my "stock playing-day trader funds" loll like to keep them there.

July 25, 2022
8:11 am
Dean
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agit said

Those are my "stock playing-day trader funds" loll like to keep them there.  

Of course ... what was I thinking ❓❗

My Bad sf-laugh

    Dean

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

July 25, 2022
8:33 pm
ExtraSauce
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agit said
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  

In addition to TDB8150 @ current 2.25%, TD also offers:
TDB8155
TDB8157
TDB8159

Each of which offer $100,000 CDIC so you can be insured up to $400K.

July 27, 2022
9:13 am
agit
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Just notice the USD ISA TDB8152 in now at 2.05% the highest out there and better then eq and simplii

August 4, 2022
10:49 pm
Norman1
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RBC US$ Investment Savings Account RBF2014 is currently paying 2.2%.

The Canadian Dollar RBC Investment Savings Account RBF2010 is paying 2.25%.

August 4, 2022
11:29 pm
Loonie
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It occurred to me the other day that these investment accounts are probably not CDIC insured, since they are structured as mutual funds. Is that correct?

(I realize most people don't expect the big banks to go under, but would still like to know if I'm right about this.)

August 4, 2022
11:42 pm
Norman1
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The ISA units are neither units of a mutual fund trust nor shares of a mutual fund corporation.

The ISA units actually represent CDIC-insured savings account deposits.

Home Trust and Home Bank offer ISA's too: Home Trust High Interest Savings Account

August 5, 2022
12:05 am
Loonie
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OK. Then why do people say they are structured as mutual funds? What is it about them that is mutual fund-ish?

August 5, 2022
4:27 am
cgouimet
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Norman1 said
The ISA units are neither units of a mutual fund trust nor shares of a mutual fund corporation.

The ISA units actually represent CDIC-insured savings account deposits.

Home Trust and Home Bank offer ISA's too: Home Trust High Interest Savings Account  

It looks like a HISA, swims like a HISA, and quacks like a HISA ...

In fact, that Home Trust/Bank product's web page you point to is actually titled "High Interest Savings Account (HISA)".

CGO
August 5, 2022
4:40 am
canadian.100
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Loonie said
OK. Then why do people say they are structured as mutual funds? What is it about them that is mutual fund-ish?  

I don't know who said they are structured like Mutual Funds but I am very familiar with Scotia ISA DYN6000 and it is definitely covered under CDIC - presently earning 2.30%. DYN6001 is for USD and interest of 2.25%.

August 5, 2022
5:01 am
savemoresaveoften
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Loonie said
OK. Then why do people say they are structured as mutual funds? What is it about them that is mutual fund-ish?  

They are usually part of the mutual fund section and the ticker looks like a mutual fund ticker, maybe thats why.

August 5, 2022
5:11 am
Bill
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Using their ticker you put in an order for them, either buying units or a dollar amount, with cut-off time for current business day, just like for mutual funds. Same for selling.

August 5, 2022
7:09 am
AltaRed
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These ISA products simply use the mutual fund platform for buy/sell transactions since brokerages do not have other options available to manage deposit accounts. That is why there apparently is confusion.

These ISAs are CDIC insured deposit accounts and issue T5 tax slips directly from the issuing institution, e.g. Royal Bank for RBF2010, Scotia's ADS Bank for DYN5000, etc. Just like a bank savings account (which is what they actually are).

They have been around for a very long time and I have used them extensively over the years (from time to time) to hold cash for investment and/or as my primary cash savings when they have had 'competitive' interest rates.

This link may have already been provided up thread but I am too lazy to look. https://mrthrifty.ca/investment-savings-accounts-maximize-interest-in-your-brokerage-account/

August 5, 2022
7:23 am
Norman1
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The ISA's are packaged as if it was a mutual fund.

As AltaRed described, one buys and sells them through the mutual fund system as if they are a mutual fund. They can be available through mutual fund dealers.

They will appear in account statements like a mutual fund with a certain number of units and a quoted price per unit. For example, DYN6000 will show up as a certain number of units held with a value of $1.00 per unit.

It is a clever trick to accept deposits through the mutual fund advisors and dealers.

August 5, 2022
7:53 am
Bill
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Like AltaRed been using them for years too, using just big bank brokers can safely stash more than $1.5M per person without exceeding CDIC limits, long as principal preservation & not return is your objective. After tax return is usually dismal.

August 5, 2022
9:25 am
AllanB
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My complaint with ISA is one day settlement at brokerage. Being able to buy a stock immediately sometimes matters. Be nice if they offered a higher cash rate for convenience like I believe they do down south at the Schwabs

August 5, 2022
9:41 am
AltaRed
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AllanB said
My complaint with ISA is one day settlement at brokerage. Being able to buy a stock immediately sometimes matters. Be nice if they offered a higher cash rate for convenience like I believe they do down south at the Schwabs  

Stocks and bonds close in T+2. The ISAs close in T+1. I've always bought the stock or bond before then selling enough ISA units to pay for the purchase. Even if one misses the 'current' business day of the stock/bond purchase, the ISA sale is contracted next business day and the proceeds are available to pay for the stock/bond on T+2.

Exception: Registered accounts where one cannot go 'short' anyway.

August 5, 2022
9:49 am
canadian.100
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AltaRed said

Stocks and bonds close in T+2. The ISAs close in T+1. I've always bought the stock or bond before then selling enough ISA units to pay for the purchase. Even if one misses the 'current' business day of the stock/bond purchase, the ISA sale is contracted next business day and the proceeds are available to pay for the stock/bond on T+2.

Exception: Registered accounts where one cannot go 'short' anyway.  

At iTrade, for my Registered Account, I needed to initiate the "sell" part of the ISA funds first, and then the system allowed me to do the purchase of shares/ETFs. The system would not allow me to purchase the shares/ETFs if I did not have sufficient cash balance already available before I initiated the sell of ISA funds.

August 6, 2022
7:56 am
AllanB
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Norman1 said
RBC US$ Investment Savings Account RBF2014 is currently paying 2.2%.

RBF2014 is paying 2.05% I guess they update Monday

August 6, 2022
8:29 am
AltaRed
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canadian.100 said

At iTrade, for my Registered Account, I needed to initiate the "sell" part of the ISA funds first, and then the system allowed me to do the purchase of shares/ETFs. The system would not allow me to purchase the shares/ETFs if I did not have sufficient cash balance already available before I initiated the sell of ISA funds.  

As I posted in #37, registered accounts cannot go short by law/regulation, so cash must be available in order to pay for a 'buy'. I have discussed that with Scotia iTrade where I have my registered accounts. Their system cannot recognize the ISA holding as 'cash equivalent' and they didn't seem motivated to resolve that.

I have heard anecdotally the software platforms of a few brokerages, maybe TDDI as one example, recognize that ISAs are "cash equivalents" and will permit a temporary 'technical' short to occur, e.g. a buy to occur before ISA units with T+1 settlement are sold.

Ultimately, it is no big deal to sell ISA units first. One may not get the market price one wants to buy that equity that specific moment of that specific day but it ultimately makes no real difference in the long run. The 'noise' of a purchase price will be forgotten in mere days or weeks. That has been the story of some 20 years of my experience with my RRSP (now RRIF) account.

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