Freedom said

The highest CDIC savings account on the chart seems to be Oaken at 2.8%.

Is a savings account backed by CIPF riskier than one backed by CDIC? Since they're paying less than 2.8%, if it were riskier, seems like the rate would have to be higher to compensate.  

There are other factors, like convenience. Wealthsimple does pretty much everything now, and much of it is done better than competing FIs. One-stop shop. Oaken is just a savings platform. If you don’t expect to touch the money frequently and it's under $100K then Oaken has advantages. Also, these rates are variable so things could change.

savemoresaveoften said
So the generation chequing account earns 2.25% and CDIC protected. This new savings account 2.5% is CIPF protected. A gain of 0.25% vs chequing account but not CDIC the only diff ?  

The highest CDIC savings account on the chart seems to be Oaken at 2.8%.

Is a savings account backed by CIPF riskier than one backed by CDIC? Since they're paying less than 2.8%, if it were riskier, seems like the rate would have to be higher to compensate.

Johnny

Dean

Ah, the L-1011, my favourite plane!

The L1011 looked nifty, but it became my least favourite jet when as a kid I sat for three hours in hot L1011s as two separate planes had minor glitches and Air Canada finally put us on something else to get us off the ground.

I was in Fairbanks, Alaska for an athletic competition in high school, but nowhere else in Alaska except Hyder, the little town encapsulated by BC near Stewart. In Scandinavia I went up the Norwegian coast to north of Narvik on the daily boats, and took the sleeper train across the north of Sweden into Finland and down to Helsinki.

We now return you to your regularly scheduled Weathsimple chat.

Like you the farthest north in Europe that I have been is in Scandinavia, specifically being Umea, Sweden. You strike me as being a strong technocrat (although you might very well be a schmoozer as well, although I have not encountered too many folks that excel at both). My Big 8 firm had an amazing tax asset, let's call him Eugene (affectionately known as Eugenius in the office). He was the ultimate technocrat, artificial intelligence before it's time. He was eventually shown the door as in the "brilliance" of the day someone thought that all partners should spend x% of their time doing marketing, no exceptions. Eugene was an exception or maybe just exceptional, but had no acumen, whatsoever for marketing. Hard to believe you nuke your intellectual property, because he has no chance of meeting the new marketing metric.

Thanks for sharing your insights into WS. I opened a Registered Savings Account on Friday.

Wealthsimple isn't a creator of ETFs and MFs - their Shariah branded ETF and I think a couple of others were created in a partnership with Mackenzie Investments, which I think is part of the same Power Corp octopus. They have no need for all the paperwork and externalities of an actual fund, this stuff is just entries on their internal bookkeeping.

I tend to keep some cash in an MMF (I use Purpose's MNY) for my minimal trading needs, since that is also eligible for my small "just in case" portfolio LOC overdraft, where Savings or MMP are not. The yield (MNY is currently around 2.34%) is close enough to not worry about. I do have an MMP, and have opened a Savings now to probably replace it, but unless I have a known use for medium term cash upcoming, I tend to ship it over to a Hubert quarterly GIC (currently a blended 3.55%).

I notice the new Savings doesn't have the MMP wording that the funds are deposited with Canadian banks, which the MMP portfolios have. Both are covered by CIPF, but presumably the non-reg Savings is just a liability on their books, rather than the actual cash being in an actual WS bank account somewhere.

They could just pay the 2.5% on balances in trading accounts instead of the MMP, but that would probably sacrifice a lot of free float they are getting now from inertia and transfer nuisance. It may be banked anyway, but rather than pass along 2.5% of whatever bank interest the MMP is earning, they may be taking the responsibility for generating part of the return themselves (savings on more expensive wholesale funding or credit lines from their banks, or whatever).

So if I have a few thousand dollars of surplus cash in my RRSP, I would have to open a new RRSP MMP account and then transfer the cash from my trading RRSP to my RRSP MMP account which is now done in real time. When I find something that I want to invest in then I simply transfer the cash from my RRSP MMP to my trading RRSP.

If the above is accurate, why would they make this so clumsy, and not just create an ETF or MF to do it within my trading account. WS seems to like creating accounts, as if the senior managers have it as a bonus metric.

Anyways thanks for sharing this.

WS seems to realize that their customers like lotteries as their Monthly Millionaires contest has seemingly been an overwhelming marketing success.

https://www.investmentexecutiv.....on-stakes/

But by branding it separately from a "managed" account with a somewhat misleading MMP name, it will be easier to find and promote. They may have other differences now that is rolled out - eligibility or not for margin/line of credit, or something like that.

They also have their old "registered savings accounts", which are like the Chequing account without all the transactional stuff - tiered rates 1.25%/1.75%/2.25% based on client status (no direct deposit bump), CDIC (max $100K) etc.

That was quick, apparently WS has completed its beta testing.

I saw this on Reddit and it seems reasonably important to share at this time.