Where to park USD cash?

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Wing
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Where to park USD cash?

Post by Wing »

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?
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Re: Where to park USD cash?

Post by gobsmack »

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.
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Re: Where to park USD cash?

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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
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Wing
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Re: Where to park USD cash?

Post by Wing »

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.
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AltaRed
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Re: Where to park USD cash?

Post by AltaRed »

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.
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Re: Where to park USD cash?

Post by gobsmack »

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.
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Koogie
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Re: Where to park USD cash?

Post by Koogie »

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
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Re: Where to park USD cash?

Post by Wing »

Anyone has other alternatives on where to park USD cash?
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Re: Where to park USD cash?

Post by IdOp »

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.
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AltaRed
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Re: Where to park USD cash?

Post by AltaRed »

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.
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Re: Where to park USD cash?

Post by Koogie »

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
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Re: Where to park USD cash?

Post by AltaRed »

Quoted returns (yields) are already net of MERs.
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Re: Where to park USD cash?

Post by Koogie »

So, what is the catch then. If it is so safe, why not use it instead of TDB8152 ?
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Re: Where to park USD cash?

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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:
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Re: Where to park USD cash?

Post by IdOp »

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 ... .
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Re: Where to park USD cash?

Post by DenisD »

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.
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Re: Where to park USD cash?

Post by chufinora »

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.
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Re: Where to park USD cash?

Post by Koogie »

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.
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Re: Where to park USD cash?

Post by Hogwild »

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.
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adrian2
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Re: Where to park USD cash?

Post by adrian2 »

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.
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Re: Where to park USD cash?

Post by Hogwild »

Is the CIB483 yield after or before MER?

Thanks
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Re: Where to park USD cash?

Post by IdOp »

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.
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Re: Where to park USD cash?

Post by hamor »

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!
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Re: Where to park USD cash?

Post by fireseeker »

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??
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Re: Where to park USD cash?

Post by Peculiar_Investor »

Thanks to the detective work here I have made some additions to our wiki, Fund-based investment savings accounts.
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