Where to park USD cash?

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Koogie
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Re: Where to park USD cash?

Post by Koogie »

Peculiar_Investor wrote: 10 Jan 2018 11:55
DenisD wrote: 10 Jan 2018 11:46 I think the CIBC funds in that list are money market funds, not ISAs.
:oops: You are correct and the wiki has been correct too.
Maybe take out references to "TD Waterhouse" as well ? Doubt any beginners will know that that is the same as TDDI.
Hell, I've gotten blank looks at TDCT when I call it Waterhouse.
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Re: Where to park USD cash?

Post by DenisD »

Koogie wrote: 29 Jan 2018 19:07Maybe take out references to "TD Waterhouse" as well ?
Done.
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Re: Where to park USD cash?

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Yes, it showed up in my account next day. So after 30 days, the interests will be reflected as extra units in my account?
IdOp wrote: 29 Jan 2018 18:54
johnsmith1 wrote: 29 Jan 2018 13:01I just bought some tdb8150 so it will show up in my account tomorrow?
At TDDI a TDB8150 trade will typically show up in the Orders as filled, and on the Activity page, sometime in the morning of the day after the trade. That would be tomorrow morning if you bought before 3pm ET today. It will probably take another day to be reflected in your holdings. (Not sure if they have real-time holdings.)
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Arby
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Re: Where to park USD cash?

Post by Arby »

johnsmith1 wrote: 31 Jan 2018 13:32 Yes, it showed up in my account next day. So after 30 days, the interests will be reflected as extra units in my account?
The interest will show up in you account at the end of each month. It is reflected as extra units in your account.
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AltaRed
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Re: Where to park USD cash?

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Arby wrote: 31 Jan 2018 14:07
johnsmith1 wrote: 31 Jan 2018 13:32 Yes, it showed up in my account next day. So after 30 days, the interests will be reflected as extra units in my account?
The interest will show up in you account at the end of each month. It is reflected as extra units in your account.
Only if an election was made to re-invest distributions. Otherwise it will be cash in account. If I remember correctly, the default in some brokerages is re-investment, while in others, one has to specifically pick one of the two choices.
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Re: Where to park USD cash?

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Yes, the interest payment showed up as cash in account while the unit price and units are still same.
AltaRed wrote: 31 Jan 2018 14:47
Arby wrote: 31 Jan 2018 14:07
johnsmith1 wrote: 31 Jan 2018 13:32 Yes, it showed up in my account next day. So after 30 days, the interests will be reflected as extra units in my account?
The interest will show up in you account at the end of each month. It is reflected as extra units in your account.
Only if an election was made to re-invest distributions. Otherwise it will be cash in account. If I remember correctly, the default in some brokerages is re-investment, while in others, one has to specifically pick one of the two choices.
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Re: Where to park USD cash?

Post by mewmew »

Anyone parking their money at time deposits, is there's an improvement in rates?
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Re: Where to park USD cash?

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Will it incur fees if selling tdb8152(usd)/tdb8150 (cad) less than 30 days? I saw a warning saying there might be 1% fees if mutual funds are sold within 30 days?
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Re: Where to park USD cash?

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It is usually at the discretion of the fund manager. Ask them. My guess is no, unless you are dealing in large enough sums that the fund manager cannot efficiently deploy those funds and it disadvantages existing unit holders.

Example: if the fund manager can only make 1% on that specific deposit and the fund has been delivering 1.25% to existing unitholders, why should existing unit holders subsidize the joker who has invested a large sum for a short period.
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Re: Where to park USD cash?

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From posts on page 1, it seems there's no commissions or holding period requirement. Maybe I will call to make sure.
Last time, it's like an hour wait, a week ago.
AltaRed wrote: 02 Feb 2018 15:02 It is usually at the discretion of the fund manager. Ask them. My guess is no, unless you are dealing in large enough sums that the fund manager cannot efficiently deploy those funds and it disadvantages existing unit holders.

Example: if the fund manager can only make 1% on that specific deposit and the fund has been delivering 1.25% to existing unitholders, why should existing unit holders subsidize the joker who has invested a large sum for a short period.
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Re: Where to park USD cash?

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johnsmith1 wrote: 02 Feb 2018 14:47 Will it incur fees if selling tdb8152(usd)/tdb8150 (cad) less than 30 days? I saw a warning saying there might be 1% fees if mutual funds are sold within 30 days?
No. These are savings accounts.
4. Service Charges
The Bank does not currently charge any service or transaction fees for the operation of the TD ISA. The Bank reserves the right to introduce such fees, subject to the notice requirements of section 14 below. The Bank may deduct from your deposits in the TD ISA any taxes, interest or penalties payable in respect of the TD ISA.
https://www.tdassetmanagement.com/docum ... ns%20E.pdf
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Re: Where to park USD cash?

Post by OnlyMyOpinion »

Koogie wrote: 29 Jan 2018 19:07... Maybe take out references to "TD Waterhouse" as well ? Doubt any beginners will know that that is the same as TDDI. Hell, I've gotten blank looks at TDCT when I call it Waterhouse.
I agree, although "TD Direct Investing is a division of TD Waterhouse Canada Inc., a subsidiary of The Toronto-Dominion Bank", and our TDDI self-directed RRSP contribution receipts are still issued by TD Waterhouse Canada Inc.
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Re: Where to park USD cash?

Post by johnsmith1 »

Thanks for the confirmation. I called and was told there's no holding requirement or commissions. So I sold it.

The reason I did this exercise is I have biz accounts with TD,US and Cad. Their plan requires min to waive fees. As the interest rates are rising on both sides, I think I will make some money even by paying some banking fees while putting money in TDB8150/8152.

Thanks!
Sumaco wrote: 02 Feb 2018 15:30
johnsmith1 wrote: 02 Feb 2018 14:47 Will it incur fees if selling tdb8152(usd)/tdb8150 (cad) less than 30 days? I saw a warning saying there might be 1% fees if mutual funds are sold within 30 days?
No. These are savings accounts.
4. Service Charges
The Bank does not currently charge any service or transaction fees for the operation of the TD ISA. The Bank reserves the right to introduce such fees, subject to the notice requirements of section 14 below. The Bank may deduct from your deposits in the TD ISA any taxes, interest or penalties payable in respect of the TD ISA.
https://www.tdassetmanagement.com/docum ... ns%20E.pdf
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Re: Where to park USD cash?

Post by Wing »

Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr
02/01/18 1.41 1.48 1.64 1.89 2.16 2.33 2.56 2.72 2.78 2.90 3.01
02/02/18 1.40 1.48 1.65 1.88 2.15 2.33 2.58 2.76 2.84 2.97 3.08

Above are US treasury yields. Is there anywhere in Canada that we can access these kinds of yields?

Does it worth to open a bank account in the US earning a higher rate and deposits insured (since it's USD depositing at a US domiciled bank)?
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Re: Where to park USD cash?

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You could buy those US treasuries in an IB account? Secured by the full faith and credit of mr. Trump.
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Re: Where to park USD cash?

Post by mewmew »

peter wrote: 02 Feb 2018 20:07 You could buy those US treasuries in an IB account? Secured by the full faith and credit of mr. Trump.
Thanks!

Is it only available with an IB account? I have no experience with IB but seems it's pretty special as I heard people talking about it offers the lowest FX exchange slippage there.
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Re: Where to park USD cash?

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I don't see US treasuries in my CIBC or TD account. I assume you can buy them at some suitably high price, on the phone, but don't know.

IB is just a brokerage for most purposes. You can sign up for a Canadian account, with Canadian reporting etc., linked to Canadian (and other) bank accounts. Their platforms arguably have a higher learning curve than most big bank brokers, IB might not be very useful for registered accounts, and people complain about a $120/year fee that is waived for balances over $100k or waived if you spend $10/month in trades. Their foreign exchange (essentially no markup over spot, just $1-$3 commission for my size of trades), low margin rates, and ability to hold and transfer multiple currencies are the main attractions for me. Assuming they sell those US treasuries to Canadians odds are they're as cheap as you can get in Canada, but yes, that would require an IB account, and holding them in an IB account.
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Re: Where to park USD cash?

Post by Park »

As an alternative to a $US money market fund, buying Treasury bills or buying Vanguard short term Treasury ETF has been brought up.

I have an IB account. For orders less than $US 1 million, the commission is 0.02% on Treasury bills. On $US100K, bid ask spread is around 0.006%. Although one might think the minimum order is $US1,000, it's probably more like $US100,000. It will vary, but don't count on smaller orders being filled. Unless you roll the Treasury bill, you'll pay commission and half the bid ask only once.

As for Vanguard short term Treasury ETF, expense ratio of 0.07%. Duration is 1.9 years, so you're taking some interest rate risk.

Another option would be SHV, iShares short term Treasury bond fund. Expense ratio of 0.15%. Duration is 0.41 years. The quoted bid ask spread of $US0.01 of the present price of $US110.26, is 0.009%, but with an average trading volume of 792,000 share per day, I wouldn't be surprised if it's less. At IB, you'll pay $US0.005/share in commission, with minimum of $US1.00 and maximum of 0.5% of trade value. You''ll pay two commissions and half the bid ask spread twice.

With either option, a minimum holding period would be required, to pay the trade execution costs.
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Re: Where to park USD cash?

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peter wrote: 04 Feb 2018 22:21 I don't see US treasuries in my CIBC or TD account. I assume you can buy them at some suitably high price, on the phone, but don't know.
FWIW I finally got around to calling TDDI about this recently. The PA rep contacted the bond desk to see what was available, as I was just inquiring and not looking to buy immediately. I was loooking for 3-12 month maturities, rep came back and apologetically informed me they had nothing. Not one US treasury available.

Thinking it might be time to open an IB account. I’d much rather just declare GIC interest than deal with the hassles that come from opening a new brokerage account and all the accounting involved in buying foreign securities but the rate differential seems too large not to. It boggles my mind that a year ago I could get 0.9% 6 month term deposits at TD when the U.S. 6 month treasury was yielding 0.67% and now that it yields 1.84%(a 175% increase!) the TD rate has not budged.

Open to all other suggestions but it may just be time to open that IB account.
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Re: Where to park USD cash?

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gsp_ wrote: 20 Feb 2018 08:59 Open to all other suggestions but it may just be time to open that IB account.
CIBC US MMF CIB483 currently yields 1.62%
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Re: Where to park USD cash?

Post by gsp_ »

adrian2 wrote: 20 Feb 2018 10:09 CIBC US MMF CIB483 currently yields 1.62%
Understood :wink:, we’ve had this conversation before. Not interested in owning commercial paper on trusts no one has ever heard of, particularly because of the amount involved which is well above the CIB583 threshold. More risk and less return than US treasuries is not for me, I don’t really need the liquidity.
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Re: Where to park USD cash?

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gsp_ wrote: 20 Feb 2018 17:06
adrian2 wrote: 20 Feb 2018 10:09 CIBC US MMF CIB483 currently yields 1.62%
Understood :wink:, we’ve had this conversation before. Not interested in owning commercial paper on trusts no one has ever heard of, particularly because of the amount involved which is well above the CIB583 threshold. More risk and less return than US treasuries is not for me, I don’t really need the liquidity.
Just to set the record straight: CIB583, the premium version of the US MMF, currently yields 1.67% (MER is 0.14% vs. 0.20% for CIB483) and while some holdings I don't recognize, the first two are household issuers: National Bank (5.5% of holdings) and RBC (4.57%).

AFAIK, no MMF based in Canada has ever broken the buck. While there is a non-zero risk of it happening, IMHO the percentage at risk is less than the fluctuations in the exchange rate. To each his own, of course; I view this through my own eyes of having 5 digit amounts in CIB483, with one or more digits I may be tempted to play it safe the way you suggest.
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Re: Where to park USD cash?

Post by gsp_ »

adrian2 wrote: 20 Feb 2018 20:11Just to set the record straight: CIB583, the premium version of the US MMF, currently yields 1.67% (MER is 0.14% vs. 0.20% for CIB483) and while some holdings I don't recognize, the first two are household issuers: National Bank (5.5% of holdings) and RBC (4.57%).
The CIB583 webpage managed by CIBC lists the top 9 holdings as trusts I’ve never heard of, other than when we previously discussed this MMF.
To each his own, of course; I view this through my own eyes of having 5 digit amounts in CIB483, with one or more digits I may be tempted to play it safe the way you suggest.
We agree, I might not be as careful if an order of magnitude less was in question.
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Re: Where to park USD cash?

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gsp_ wrote: 20 Feb 2018 21:43
adrian2 wrote: 20 Feb 2018 20:11Just to set the record straight: CIB583, the premium version of the US MMF, currently yields 1.67% (MER is 0.14% vs. 0.20% for CIB483) and while some holdings I don't recognize, the first two are household issuers: National Bank (5.5% of holdings) and RBC (4.57%).
The CIB583 webpage managed by CIBC lists the top 9 holdings as trusts I’ve never heard of, other than when we previously discussed this MMF.
The info on the CIBC webpage is as of Dec 31; many of those holdings matured and were replaced.

My info comes from http://www.fundlibrary.com/funds/listin ... &id=CIB583 then clicking on the fund name and then the Holdings tab; as of now it shows holdings as of Jan 31, hence the two top holdings I've quoted.
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Re: Where to park USD cash?

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gsp_ wrote: 20 Feb 2018 08:59It boggles my mind that a year ago I could get 0.9% 6 month term deposits at TD when the U.S. 6 month treasury was yielding 0.67% and now that it yields 1.84%(a 175% increase!) the TD rate has not budged.
Too little too late but I just noticed TD finally raised their rates a little. https://www.tdcanadatrust.com/products- ... CTable.jsp

Looks like about a 25 bp increase.
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