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TFSA - Questrade - how to buy GICs or High Interest investments through it
September 23, 2012
7:58 am
Ash
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Hi I recently opened a TFSA at Questrade and bought some stocks, but now I realize I should have bought more GICs or put the money in a TFSA high interest savings account due to the fact that for stocks I can deduct capital losses from my taxes and this isnt possible in a TFSA.

Anyway, I would be grateful for some advice on how to buy GICs or high interest investments within a Trading Account, whether Questrade or other.

Thx

September 24, 2012
2:59 pm
Yatti
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Ash said

Hi I recently opened a TFSA at Questrade and bought some stocks, but now I realize I should have bought more GICs or put the money in a TFSA high interest savings account due to the fact that for stocks I can deduct capital losses from my taxes and this isnt possible in a TFSA.

Anyway, I would be grateful for some advice on how to buy GICs or high interest investments within a Trading Account, whether Questrade or other.

Thx

Questrade has some pretty high minimums for GIC/Bonds.. You could purchase (through questrade) etfs/funds holding bonds etc.. I would just open an account (TFSA) with an institution that will give u HISA/GIC at the rate u desire.. You can sort TFSA cash accounts here
https://www.highinterestsavings.ca/chart .. Have as many TFSA accounts as you like just don't go over your contribution limit!..

March 1, 2013
5:17 pm
Sensei
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Any reason why one wouldn't just buy the same GICs through ING Direct's TFSA account?

March 1, 2013
10:06 pm
kanaka
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Yatti said

Ash said

Hi I recently opened a TFSA at Questrade and bought some stocks, but now I realize I should have bought more GICs or put the money in a TFSA high interest savings account due to the fact that for stocks I can deduct capital losses from my taxes and this isnt possible in a TFSA.

Anyway, I would be grateful for some advice on how to buy GICs or high interest investments within a Trading Account, whether Questrade or other.

Thx

Questrade has some pretty high minimums for GIC/Bonds.. You could purchase (through questrade) etfs/funds holding bonds etc.. I would just open an account (TFSA) with an institution that will give u HISA/GIC at the rate u desire.. You can sort TFSA cash accounts here
https://www.highinterestsavings.ca/chart .. Have as many TFSA accounts as you like just don't go over your contribution limit!..

Ash. Shoot for buying stocks that wont have a loss!! lol

I looked at buying bonds in my TFSA with Itrade and found what with the 5000 limit your options are limited as you have to buy and minimum 5000 face value. So you can buy bonds bang on for 5000 or over valued say at 5500 with a 5000 face value or under valued say at 3500 with a 5000 face value. The key is you have to buy a minimum of 5000 face value. Unless you are able to invest more than 5000 in your TFSA, you have to look at under valued bonds. Then you will have to make sure you are not buying a junk bond and you will have to set a limit comfort level of a AAA AA A BB+ etc. And you have to look at how long you have to wait for the bond to mature. Once you see what you can buy, you may want to abandon your options. You could look at bond ETFS of which you can buy some good ones commission free or in the case of Itrade 24.99 per buy. I buy a few Ishare ETF's and when I have enough dividend money I buy one at a time from the commission free ones.

For some reason I have never been a fan of ING from its' start in Canada or the now defunct Ally.
Look at the charts here for high interest GIC's and you will some some good ones. I deal with both Outlook Financial and Accelerate and my preference is Accelerate. The Winnipeg CU rates are the best in my opinion as they give you the investor the best rate (no cut to advisers) ..... you may find some good ones at Coast Capital but not as good as Winnipeg CU's.

I asked Itrade for their GIC rates but was advised to phone in to find out what they were ..... which I have not followed up. I did find Royal Bank's brokerage GIC's are rates though....not that great. So it looks like the idea of buying a GIC through a brokerage does not have that great of rates.

Out of curiosity if you are a small user what are you paying for a trade at Questrade?

March 2, 2013
8:38 am
GS1
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kanaka said
[snip]
I did find Royal Bank's brokerage GIC's are rates though....not that great. So it looks like the idea of buying a GIC through a brokerage does not have that great of rates.
[snip]

RBC Direct Investing is quoting a simple 1 year RBC GIC at 1.45% - but sort the column and you find:
Home Trust @ 1.75%
Vancity Credit Union @ 1.72%
ING @ 1.7%
Korea Exchange Bank @ 1.7%

And, yes, the last one on the list is CDIC insured.

When I have needed a GIC for some reason I have simply bought the one that is currently at the top of this list.

Greg

March 2, 2013
1:18 pm
kanaka
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GSmall99 said

kanaka said
[snip]
I did find Royal Bank's brokerage GIC's are rates though....not that great. So it looks like the idea of buying a GIC through a brokerage does not have that great of rates.
[snip]

RBC Direct Investing is quoting a simple 1 year RBC GIC at 1.45% - but sort the column and you find:
Home Trust @ 1.75%
Vancity Credit Union @ 1.72%
ING @ 1.7%
Korea Exchange Bank @ 1.7%

And, yes, the last one on the list is CDIC insured.

When I have needed a GIC for some reason I have simply bought the one that is currently at the top of this list.

Greg

If you are looking for a GIC for a TFSA look here (and tap the year you want):
http://www.financialpost.com/personal-finance/rates/gic-annual.html

If you by a GIC for a TFSA from your online brokerage see if there is a fee to buy or to transfer it back to you ie. Itrade to your BMO bank account. Don't let fees interfere with your accumulated interest!!!

If you look at the Winnipeg CU rates they are fantastic compared to others. I have come to the conclusion that they are offering the real rate ..... while others are offering that same rate but are allowing others to take a cut of the pie.
ie. 3 year rate
Accelerate 2.45%
Home Trust 2.1%

So where is that .35% going? Bank coffers? Investment Advisers Commission? I know, factually, that Coast Capital gives my adviser a cut of the % and Coast Capital gives me a higher rate through my broker than what I would get if I walked into a local branch....so much for their NO HAGGLE guarantee.... they are some what two faced ....
https://www.coastcapitalsavings.com/Personal/Rates/HaggleFree_Guarantee/

So going old school. Instead of buying at a department store for a suit, go to a men's wear shop where there is more expertise and selection. So what am I saying .... your discount brokerage is a department store and the independent CU or Bank is the men's wear shop. Or simpler said use each bank, credit union, or brokerage for what they best offer to you. I would say go for the highest interest rate after you research the institution offering it and how the funds are insured.

With rates are they are today, vs the 9% to 18% rates years ago, one must find the best rate possible as it will make a difference.

March 2, 2013
1:28 pm
maxi
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I agree fully!!!

March 14, 2013
6:12 pm
teneighty
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Ok, go to whatever institution offers the current best rate. But, in answer to sensei's question, with a TFSA, there may be a fee to transfer your TFSA out! [poof] there go my gains :( I currently have a TFSA at Vancity and they just told me there was a $25 dollar fee to transfer it out. And even if they say no... today, who will guarantee me that they won't be change their policy and charge me 50 bucks in a few years when the GIC matures or I decide I want to put it somewhere else?

So I thought, who will consistently have good rates? I should probably transfer it now, not to whoever has the current bast rate, but to the best financial institution for the long term, so I will not have to transfer it again.

Then again, what if I want to buy a GIC now, and later I decide I want to buy some stocks or something else with it? If I can buy bonds and GICs in addition to stocks from a Questrade account, maybe that is the best place?

Anyone know what Questrades GIC rates are in that case? Would it be as dissappointing as Royal Bank brokerage GIC?

If I have to buy a 5000 face value bond, that's pretty inconvenient. I only have a little more than 5k because I decided to focus on RRSPs.

March 14, 2013
9:25 pm
kanaka
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teneighty said

Ok, go to whatever institution offers the current best rate. But, in answer to sensei's question, with a TFSA, there may be a fee to transfer your TFSA out! [poof] there go my gains :( I currently have a TFSA at Vancity and they just told me there was a $25 dollar fee to transfer it out. And even if they say no... today, who will guarantee me that they won't be change their policy and charge me 50 bucks in a few years when the GIC matures or I decide I want to put it somewhere else?

So I thought, who will consistently have good rates? I should probably transfer it now, not to whoever has the current bast rate, but to the best financial institution for the long term, so I will not have to transfer it again.

Then again, what if I want to buy a GIC now, and later I decide I want to buy some stocks or something else with it? If I can buy bonds and GICs in addition to stocks from a Questrade account, maybe that is the best place?

Anyone know what Questrades GIC rates are in that case? Would it be as dissappointing as Royal Bank brokerage GIC?

If I have to buy a 5000 face value bond, that's pretty inconvenient. I only have a little more than 5k because I decided to focus on RRSPs.

Why don't you hold a GIC, let mature, put it into a TFSA savings account, pull it out in December and put it back into a TFSA where ever you want in January. OR buy a GIC for say .... 14 months and let it mature in December and follow the routine?? No transfer here ... I have done it many times.And don't forget you can re- deposit your original deposit plus all the interest you made.

March 16, 2013
12:22 am
Yatti420
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I would use ETFs for bond exposure etc.. I did take advantage of ING's 90 day GIC @ 2.5%.. RRSP or TFSA I think.. ING has a decent mortgage offering.. With the horror stories about bank mortgages etc I'd be scared to lose ING.. Although they are owned by Scotia and will probably undergo change it's business as usual for now..

March 17, 2013
8:12 pm
teneighty
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Thank you kanaka. I was worried about losing contribution room forever, but since you suggested it I checked tfsa.gc.ca and it does say withdrawals can be put back, just not in the same year. So yeah, why not withdraw it in december and deposit it wherever I want in January. Beautiful!T

That 2.5% 90 day GIC at ING was exactly what I wanted to do at first. Perhaps I will still do so. I have the contribution room that I could withdraw the funds from the credit union and place them with ING and not go over. If I was maxing out the TFSA this would be more complicated, unfortunately.

I did have a look at the list of GICs available through questrade, and while not the best available, it seemed a reasonable rate could be purchased, but only if there are no fees... This page indicates that they do not, but could there be some kind of hidden cost?

March 17, 2013
9:24 pm
kanaka
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teneighty said

Thank you kanaka. I was worried about losing contribution room forever, but since you suggested it I checked tfsa.gc.ca and it does say withdrawals can be put back, just not in the same year. So yeah, why not withdraw it in december and deposit it wherever I want in January. Beautiful!T

That 2.5% 90 day GIC at ING was exactly what I wanted to do at first. Perhaps I will still do so. I have the contribution room that I could withdraw the funds from the credit union and place them with ING and not go over. If I was maxing out the TFSA this would be more complicated, unfortunately.

I did have a look at the list of GICs available through questrade, and while not the best available, it seemed a reasonable rate could be purchased, but only if there are no fees... This page indicates that they do not, but could there be some kind of hidden cost?

Keep in mind you have any time in the next year to re-invest...not just January....wait for the best rate.
I am with Itrade and they said I had to phone them for rates and I did NOT but I found GIC's online that are offered by RBC brokerage and they are not that good. So I was thinking that Itrade would not be any better. I do better, for GICs, with Outlook Financial (offers withdrawal with penalty) and Accelerate (locked in). What you need to look at is what are the costs if any to deposit AND to withdraw. You often are penalized for withdrawing.

May 4, 2021
2:38 pm
picassocat
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If your money is «stuck» in a registered account and you are far from December (in the case of a TFSA account), consider PSA Purpose High Interest Savings ETF, its money in the bank. The yield isn’t so great (.63%) but it’s much better than most if not all major banks.

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