Where to park USD cash?

Banking and Saving strategies, maximizing interest rates, budgeting, GICs, HISAs.
Wing
Silver Ring
Silver Ring
Posts: 116
Joined: 12 Nov 2016 21:02

Where to park USD cash?

Post by Wing » 30 Nov 2017 12:45

Just saw a promotion going on at HSBC on USD cash at 2.5%, 180 days term deposit. But the promo is ending today.

Where are you parking your USD these days? I read about SHV, which is a money market fund. However, it involves capital gains/losses when selling so I prefer fixed rates vehicle (GIC/term deposit).

Is there a site where it keeps track of USD deposit rates just like that for Canadian dollars?

gobsmack
Silver Ring
Silver Ring
Posts: 291
Joined: 04 Sep 2015 13:16

Re: Where to park USD cash?

Post by gobsmack » 30 Nov 2017 14:00

I use a HISA - namely, TDB8152.

If the USD is in a taxable account, remember to track your ACB. I also avoid using USD money market funds because deposits and withdraws may trigger a disposition.
Last edited by gobsmack on 30 Nov 2017 17:49, edited 1 time in total.

User avatar
AltaRed
Diamond Ring
Diamond Ring
Posts: 18610
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Where to park USD cash?

Post by AltaRed » 30 Nov 2017 15:36

A little off tangent but the Scotia entry link to Dundee Bank in Finiki needs to change to ADS Canadian Bank https://ads.scotiabank.com/ADS/Download/236/en
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom

Wing
Silver Ring
Silver Ring
Posts: 116
Joined: 12 Nov 2016 21:02

Re: Where to park USD cash?

Post by Wing » 30 Nov 2017 17:11

gobsmack wrote:
30 Nov 2017 14:00
I use a HISA - namely, TDB8152.

If the USD is in a taxable account, remember to track your ACB. I also avoid using USD money market funds because deposits and withdraws may trigger a disposition.
How does TDB8152 work? Does it involve commission when buying/selling, any fixed holding period? Thanks!

HSBC is offering 0.8% (off promotion period) for 30 day eTerm redeemable deposit currently, minimum US$5000.

User avatar
AltaRed
Diamond Ring
Diamond Ring
Posts: 18610
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Where to park USD cash?

Post by AltaRed » 30 Nov 2017 17:16

Ask them directly. There is no buy/sell commissions but there might be a minimum hold period. I am with Scotia, so generally what I do is assume a 90 day hold period to avoid penalty, but that is just for holding some shares. I buy/sell within the holding on a regular basis. Example: Buy 1000 shares ($10,000). As long as I get past the 90 day period, I can buy/sell as often as I want after that.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom

gobsmack
Silver Ring
Silver Ring
Posts: 291
Joined: 04 Sep 2015 13:16

Re: Where to park USD cash?

Post by gobsmack » 30 Nov 2017 17:53

Wing wrote:
30 Nov 2017 17:11
How does TDB8152 work? Does it involve commission when buying/selling, any fixed holding period? Thanks!
No commissions and no holding period as far as I know but it would be best for you to check with them.

User avatar
Koogie
Gold Ring
Gold Ring
Posts: 1440
Joined: 09 Mar 2012 16:44

Re: Where to park USD cash?

Post by Koogie » 30 Nov 2017 18:00

I use TDB8152 as well. No fees to buy/sell and no min. holding period that I know of* or have ever run into.
It is paying a feeble 0.40% right now though.

*here is their brochure for it.
https://www.tdassetmanagement.com/docum ... atures.pdf

Current Rates
https://www.tdassetmanagement.com/solut ... /index.jsp
Buy very little, sell even less.

Wing
Silver Ring
Silver Ring
Posts: 116
Joined: 12 Nov 2016 21:02

Re: Where to park USD cash?

Post by Wing » 01 Dec 2017 12:58

Anyone has other alternatives on where to park USD cash?

User avatar
IdOp
Gold Ring
Gold Ring
Posts: 2877
Joined: 16 Feb 2006 11:27
Location: On the Pacific sea bed, 100 mi off the CA coast.
Contact:

Re: Where to park USD cash?

Post by IdOp » 02 Dec 2017 15:41

Here are three (or four) more options, but please note the cautions below. These are U$ money market mutual funds.

CIBC: CIB483, 1.34%

RBC series D: RBF1003, 1.20%
RBC series A: RBF261, 1.15%

TD: TDB166, 0.95%

Since these are mutual funds, i.e., securities, they will trigger a capital gain when buying or selling if held in a non-registered account. In order to get the relatively high yields indicated, the fund managers may be reaching for yield; some of the holdings in the funds could have their credit quality come into question. Don't blame me if you lose your life savings. :wink:
Last edited by IdOp on 02 Dec 2017 15:50, edited 1 time in total.

User avatar
AltaRed
Diamond Ring
Diamond Ring
Posts: 18610
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Where to park USD cash?

Post by AltaRed » 02 Dec 2017 15:47

Indeed, it is possible to lose capital in a MMF but I think there was only one instance of that every happening and it was in the USA. Institutions simply cannot take the reputational hit if their MMF unit values dropped below $10 (or their nominal 'par' value). I wouldn't worry about it with any of the big institutions.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom

User avatar
Koogie
Gold Ring
Gold Ring
Posts: 1440
Joined: 09 Mar 2012 16:44

Re: Where to park USD cash?

Post by Koogie » 02 Dec 2017 16:25

IdOp wrote:
02 Dec 2017 15:41
TD: TDB166, 0.95%
I had never heard of TDB166 so looked it up. I assume one would have to take the MER off of the yield (effective: 0.51%) ??


Category
U.S. Money Market
Benchmark
75% Citigroup 1 Month T-Bill Index (US$), 25% Citigroup 3 Month T-Bill Index (US$)
Total Fund Assets (Millions)**
$762.36
MER
0.44% MER as of June 30, 2017
Early Redemption Fee
-
Minimum Investment
$100
Minimum Subsequent Investment
$100
Minimum Pre-authorized Purchase Plan Amount
$25.00
Buy very little, sell even less.

User avatar
AltaRed
Diamond Ring
Diamond Ring
Posts: 18610
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Where to park USD cash?

Post by AltaRed » 02 Dec 2017 16:54

Quoted returns (yields) are already net of MERs.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom

User avatar
Koogie
Gold Ring
Gold Ring
Posts: 1440
Joined: 09 Mar 2012 16:44

Re: Where to park USD cash?

Post by Koogie » 02 Dec 2017 17:54

So, what is the catch then. If it is so safe, why not use it instead of TDB8152 ?
Buy very little, sell even less.

User avatar
AltaRed
Diamond Ring
Diamond Ring
Posts: 18610
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Where to park USD cash?

Post by AltaRed » 02 Dec 2017 18:21

Koogie wrote:
02 Dec 2017 17:54
So, what is the catch then. If it is so safe, why not use it instead of TDB8152 ?
Beats me. I've never known anything about TD funds. :wink:
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom

User avatar
IdOp
Gold Ring
Gold Ring
Posts: 2877
Joined: 16 Feb 2006 11:27
Location: On the Pacific sea bed, 100 mi off the CA coast.
Contact:

Re: Where to park USD cash?

Post by IdOp » 02 Dec 2017 18:46

As I see it, the main "catch" with TDB166 is that it's a mutual fund, not a deposit account like TDB8152. Note that the latter "trades" on the mutual fund system, but this is just a work-around for convenience so that brokers can deal with them, it really is a deposit with TD. This means you can put USD cash into TDB8152 and take it out without incurring a capital gain. Not so with the mutual fund. (All assuming non-registered.) Some people don't worry/care about that, but in principle ... .

DenisD
Gold Ring
Gold Ring
Posts: 2491
Joined: 19 Feb 2005 01:24
Location: Calgary

Re: Where to park USD cash?

Post by DenisD » 02 Dec 2017 19:44

Also, I assume TDB8152 is guaranteed by TD Bank? IE, it's a legal obligation. The money market fund is based on the value of the underlying securities. It's only a moral obligation of the bank.

chufinora
Silver Ring
Silver Ring
Posts: 362
Joined: 12 Oct 2009 15:03
Location: Ottawa

Re: Where to park USD cash?

Post by chufinora » 02 Dec 2017 19:59

My US cash in my TD accounts is in CIB483 which currently has a 1.07% yield. I believe Adrian2 pointed me to it. Significantly better yield than any TD equivalents, no buy sell commissions. It is technically a money market fund, not a HISA, so ever so teensy bit less safe, but in reality if this fund has problems then the world will be in some serious troubles.

User avatar
Koogie
Gold Ring
Gold Ring
Posts: 1440
Joined: 09 Mar 2012 16:44

Re: Where to park USD cash?

Post by Koogie » 02 Dec 2017 21:33

chufinora wrote:
02 Dec 2017 19:59
My US cash in my TD accounts is in CIB483 which currently has a 1.07% yield. I believe Adrian2 pointed me to it. Significantly better yield than any TD equivalents, no buy sell commissions. It is technically a money market fund, not a HISA, so ever so teensy bit less safe, but in reality if this fund has problems then the world will be in some serious troubles.
Well, son of a gun. Now I know too. Thanks. :wink:
I read the prospectus and it says CIB483 (and the other CM MM funds) isn't subject to a minimum holding period. Also true ?

I've accrued a lot of US cash lately and it is sitting in lowly TDB8152. I'll give some thought to switching over. It'd only result in about U$575 more at the approximate return you posted but still. Now of course, that supposes the cash will sit there for a year too. The way the market is at the moment, I wouldn't be surprised either way.

added: these U$ funds are actually non-reg but in my business account. Therefore, it is my CA that has to worry about deemed disposition and ACB. Still, probably not enough return there to add to his headaches.
Buy very little, sell even less.

Hogwild
Silver Ring
Silver Ring
Posts: 166
Joined: 18 Aug 2015 21:46

Re: Where to park USD cash?

Post by Hogwild » 02 Dec 2017 22:58

Hubert Financial credit union in Manitoba also has a bank-style HISA account for $USD with yield of .75%. Backed up my Deposit Insurance Corporation of Manitoba.

User avatar
adrian2
Diamond Ring
Diamond Ring
Posts: 11615
Joined: 19 Feb 2005 08:42
Location: Greater Toronto Area

Re: Where to park USD cash?

Post by adrian2 » 03 Dec 2017 11:43

Koogie wrote:
02 Dec 2017 21:33
I read the prospectus and it says CIB483 (and the other CM MM funds) isn't subject to a minimum holding period. Also true ?
Correct.
Imagefiniki, the Canadian financial wiki
“It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong.” [Richard P. Feynman, Nobel prize winner]

Hogwild
Silver Ring
Silver Ring
Posts: 166
Joined: 18 Aug 2015 21:46

Re: Where to park USD cash?

Post by Hogwild » 04 Dec 2017 00:48

Is the CIB483 yield after or before MER?

Thanks

User avatar
IdOp
Gold Ring
Gold Ring
Posts: 2877
Joined: 16 Feb 2006 11:27
Location: On the Pacific sea bed, 100 mi off the CA coast.
Contact:

Re: Where to park USD cash?

Post by IdOp » 04 Dec 2017 14:15

Hogwild wrote:
04 Dec 2017 00:48
Is the CIB483 yield after or before MER?
Published yields for MMFs are after MER. The rates I gave were quotes obtained from TDDI. I can confirm that what I received for November on CIB483 was consistent with about 1.3% / year.

hamor
Silver Ring
Silver Ring
Posts: 305
Joined: 09 Mar 2013 23:12

Re: Where to park USD cash?

Post by hamor » 09 Jan 2018 19:45

adrian2 wrote:
03 Dec 2017 11:43
Koogie wrote:
02 Dec 2017 21:33
I read the prospectus and it says CIB483 (and the other CM MM funds) isn't subject to a minimum holding period. Also true ?
Correct.
Nice find. thanks!

fireseeker
Bronze Ring
Bronze Ring
Posts: 38
Joined: 03 Jun 2017 15:21

Re: Where to park USD cash?

Post by fireseeker » 09 Jan 2018 20:42

Interesting fund.
One thing I can't figure out (admittedly without have done a deep dive): From 2008 to 2016 the fund almost perfectly matched its benchmark. Then, the last two years, it started trouncing its benchmark. What changed??
http://quote.morningstar.ca/QuickTakes/ ... ture=en-CA

User avatar
Peculiar_Investor
Gold Ring
Gold Ring
Posts: 7179
Joined: 01 Mar 2005 14:52
Location: Calgary
Contact:

Re: Where to park USD cash?

Post by Peculiar_Investor » 10 Jan 2018 08:36

Thanks to the detective work here I have made some additions to our wiki, Fund-based investment savings accounts.
Imagefiniki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.

Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams

Post Reply