Deposit Rates: ING etc. (2009)

Saving strategies, maximizing interest rates, budgeting.

Postby broke » 21 Jan 2009 13:59

Descartes wrote:
broke wrote:Pc financial Interest Plus account lowered to 2.25%.

TFSA at PC account still at 3.05%


So far, Ing still at 2.70%



ING has been at 3.00% since January 11th.

The TFSA at Ing is 3% but Ing equivalent to the PC Plus account
is Investment Savings Account (ISA)and that is at 2.7%

I will edit my earlier post for clarity.
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Postby Clock Watcher » 21 Jan 2009 14:20

adrian2 wrote:
Clock Watcher wrote:Investment-wise, I notice that some countries are paying significantly higher interest rates (such as Australia). For large portfolios I wonder if some kind of currency hedging strategy will allow one to capture the higher rates with essentially the same risk as buying Canadian bonds?

Currency hedging theory and practice would tell you that you do not gain anything by keeping your savings in hedged A$ compared to C$.


Sorry, I am not grasping your point. Just picking numbers out of the air, suppose a 10 year government of Australia bond pays 4%, and the equivalent Canadian one pays 2%. I would buy the Australian bond, and sell the Australia dollar via future contracts. If the A$ goes up, then my future contracts drop, but that would be offset by the currency gain in the bond. If the A$ goes down, my contracts are worth more to offset currency drop in the bond. Either way, from a Canadian dollar perspective, the currency movement has no effect on me (except for transactions costs). Except that I am getting 4% instead of 2%.
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Postby adrian2 » 21 Jan 2009 14:30

Clock Watcher wrote:Just picking numbers out of the air, suppose a 10 year government of Australia bond pays 4%, and the equivalent Canadian one pays 2%. I would buy the Australian bond, and sell the Australia dollar via future contracts.

In that case, the hedging would cost exactly 2% (= 4% - 2%). You would earn 4% in A$, pay 2% hedging and end up 2% in C$.
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Postby George$ » 21 Jan 2009 18:46

I think Adrian is simply pointing out that "there is no free lunch".

Or as we say in physics: - "a perpetual motion macine is not possible - no matter how clever the inventor". :roll:
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Postby IdOp » 23 Jan 2009 16:16

Not sure if it was mentioned above, but Manulife's MIP510 is now down to 2.15% (as of Jan 13).

Also noticed BMO has a "Smart Saver" account, which pays 2.75% on the whole balance if it's over $5000 (but nothing otherwise). I'm not sure yet about other fees it may have.
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Postby BRIAN5000 » 23 Jan 2009 16:33

TD as well as TDW offers a 2 year cashable GIC for 3%


The Fine Print

Cashable anytime your rate will vary from 0% (first 90 days) 1% 1.5 % etc. want the full 3% must go to maturity
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Postby pmj » 23 Jan 2009 20:06

Today's update of the usual suspects:

MIP510 2.15% since Jan 13
DYN500 2.15% since Jan 14
RBF271 2.05% today
MFC298 1.37% today
TDB164 0.97% today

RBF271 has been holding fairly close to MIP & DYN for a while now - it's available on-line at TDW (min order $1000 no 90-day hold). TDB has really dropped off the cliff.
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Postby Serdic » 23 Jan 2009 22:05

pmj wrote:Today's update of the usual suspects:

MIP510 2.15% since Jan 13
DYN500 2.15% since Jan 14
RBF271 2.05% today
MFC298 1.37% today
TDB164 0.97% today

RBF271 has been holding fairly close to MIP & DYN for a while now - it's available on-line at TDW (min order $1000 no 90-day hold). TDB has really dropped off the cliff.


Just because my raisin de eater is fees

MIP510 - 0.25% Annual compensation
DYN500 - claims no account fees; assuming of course I'm looking at the right thing
RBF271 - 0.89% MER
MFC298 - 0.53% MER
TDB164 - 0.92% MER


Now, upthread I'd mentioned about checking on availability of RBF1002 through TDW and from the prospectus (remarkably useful thing, that), the fund is the D series of RBF271. Any and all D series are only available directly through RBC DI (pp 158; Purchases, switches and redemptions).

Ahh well, as the French say, Cest Levi.

edit - added text
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Postby Bylo Selhi » 24 Jan 2009 09:49

There are alternatives if you're prepared to move your money. E*Trade Cash Optimizer is 2.3%. ICICI is 2.5%. I'm sure there are others.

Serdic wrote:MIP510 - 0.25% Annual compensation
That's not an MER. That's the trailer that MLF pays to the advisor or discount broker with whom you hold MIP510. DYN500 pays the same trailer.
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Postby Serdic » 24 Jan 2009 10:18

Bylo Selhi wrote:That's not an MER. That's the trailer that MLF pays to the advisor or discount broker with whom you hold MIP510. DYN500 pays the same trailer.


What's the difference? From what I've read, the trailer is part of the MER and I know that the trailer will be coming out of my money.

edit - though perhaps the question should be answered in this thread.
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Postby Bylo Selhi » 24 Jan 2009 11:57

Serdic wrote:What's the difference? From what I've read, the trailer is part of the MER and I know that the trailer will be coming out of my money.

Yabbut the trailer is only one component of the MER. I haven't looked but I suspect there's a trailer buried in the MERs of the MMFs you've listed. While MIP510 and DYN500 may not have an official MER (because they're not mutual funds) you can be sure that you're paying for managing and administering those savings accounts (ISAs.) My point is that your comparison is apples to oranges.

BTW one of my pet peeves, as described in Carrick's piece:
Trailer fees are a much different story when they're paid to on-line brokers, also called discount brokers.

These dealers may offer fund research tools, but their role is to execute your orders only and not to offer any advice on your fund selection. [Indeed, securities regulations prohibit them from providing advice...Bylo]

Should an on-line broker get a full trailer? No, but they do anyway

With MMFs and ISAs there's little "research" to provide so their justification for a trailer, even at 25bp, is particularly specious.
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Postby Serdic » 24 Jan 2009 12:47

Bylo Selhi wrote: I haven't looked but I suspect there's a trailer buried in the MERs of the MMFs you've listed.


From the RBC prospectus, it appears that there is a 25bp trailer in RBF271, as its management fee is 0.75% where the Series F is 0.50%. My logic behind is that the Series F units do not pay commission to dealers who sell them (again pp157 of the RBF Simplified Prospectus).

While MIP510 and DYN500 may not have an official MER (because they're not mutual funds) you can be sure that you're paying for managing and administering those savings accounts (ISAs.)


And this hits one of my pet peeves; I realize there's no such thing as a free lunch, but I'd at least like to know how much I'm paying for it. That's a whole other discussion. Thanks for pointing that out though.

So, suffice it to say, I'll probably just tuck the money intended for the Homebuyers plan away in RBF271 since that's the most convenient, and I don't have to phone TDW.
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ING direct

Postby tnl » 26 Jan 2009 20:14

The parent of ING in the Netherlands is having financial difficulties like most financial companies.
The ING accounts in Canada are $100,000 CDIC guarantee right?
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Re: ING direct

Postby Pickles » 26 Jan 2009 20:57

tnl wrote:The parent of ING in the Netherlands is having financial difficulties like most financial companies.
The ING accounts in Canada are $100,000 CDIC guarantee right?
thanks


Have youchecked at the CDIC website?What did it say?
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Postby squash500 » 26 Jan 2009 22:26

I still don't understand why the tdb 164 is only yielding 0.97% :?: .


What are these money managers investing in?---lol

The mer on the tdb 164 is almost as high as the yield :shock: .

The Royal Bank MMF seems to be doing much better then the tdb 164?
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Postby pmj » 27 Jan 2009 12:21

Over at GlobeFund there's more than 200 MM funds. TD is in the middle of the pack:
CIBC 0.83%
BMO 0.86%
TDB 0.89%
BNS 1.11%
NaB 1.32%
and:
RBC 2.03%
.. so maybe the question should not be about TD - but about RBC....
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Re: ING direct

Postby Descartes » 27 Jan 2009 12:36

Pickles wrote:
tnl wrote:The parent of ING in the Netherlands is having financial difficulties like most financial companies.
The ING accounts in Canada are $100,000 CDIC guarantee right?
thanks


Have youchecked at the CDIC website?What did it say?


Here is the link and yes ING Canada is a member:
http://www.cdic.ca/1/9/6/7/index1.shtml

I personally would not be too concerned about the ING parent. The Dutch government would not let such a nationally critical bank fail. It has already received a 10 billion Euro bail-out in November.
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Postby Bylo Selhi » 27 Jan 2009 13:47

pmj wrote:TD is in the middle of the pack... so maybe the question should not be about TD - but about RBC....

A few years ago TD was at the head of the big bank MMF pack, including MMF, Premium MMF and US$MMF categories. It seems they've now made a decision to no longer be a leader. Perhaps this is another stealth manoeuvre, just like the LoC inactivity fee, to jack up their [s]executive compensation[/s]corporate profits.
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Postby George L » 29 Jan 2009 18:30

Effective Jan 30 2009, Altamira High Interest Performer drops its annual rate to 1.55%.
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Postby Clock Watcher » 01 Feb 2009 18:21

Are there any on-line brokers that still pays interest on Canadian cash balances? The only one I can find is eTrade because of their Cash Optimizer account.
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Postby Bylo Selhi » 01 Feb 2009 22:24

TDW wrote:Interest earned on positive cash balances
DEC15 - JAN 15 100,000 & OVER 0.75%

Interest charged on negative cash balances
DEC15 - JAN 15 6.50%

Yield rates this month
TD CDN MNY MKT-I SER'FRAC 0.87%

That's for a President's Account. Plebes may earn even less and/or pay even more.
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Postby Clock Watcher » 01 Feb 2009 23:40

Thanks Bylo. My portfolio won't be large enough to qualify for President's Account. I am in the final stages of deciding which on-line broker to use, and all of the ones on my list currently pays zero interest. My major concern is that my models may not generate a buy signal for many months, and it seems a waste to just have cash sitting there collecting no interest. Is there such a thing as a T-Bill or money market or GIC ETF?
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Postby squash500 » 02 Feb 2009 00:44

Effective Jan 30/09 MIP 510 is now only paying 1.65% :shock: .
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Postby Pickles » 02 Feb 2009 08:29

Clock Watcher wrote:Thanks Bylo. My portfolio won't be large enough to qualify for President's Account. I am in the final stages of deciding which on-line broker to use, and all of the ones on my list currently pays zero interest. My major concern is that my models may not generate a buy signal for many months, and it seems a waste to just have cash sitting there collecting no interest. Is there such a thing as a T-Bill or money market or GIC ETF?


Where do you bank?

I bank at BMO and set up a link between my bank accounts and my Investorline account. I keep my cash in a so-called high interest savings account (.75%) and move it electronically into Investorline when I buy shares. Costs me nothing. I'm about to open a new BMO's smart savers's account -- it earns 2.75% provided you maintain a minimum balance of$5000, but you get only one free withdrawn/transfer out per month.
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Postby Clock Watcher » 02 Feb 2009 13:53

Pickles wrote:
Clock Watcher wrote:Thanks Bylo. My portfolio won't be large enough to qualify for President's Account. I am in the final stages of deciding which on-line broker to use, and all of the ones on my list currently pays zero interest. My major concern is that my models may not generate a buy signal for many months, and it seems a waste to just have cash sitting there collecting no interest. Is there such a thing as a T-Bill or money market or GIC ETF?


Where do you bank?

I bank at BMO and set up a link between my bank accounts and my Investorline account. I keep my cash in a so-called high interest savings account (.75%) and move it electronically into Investorline when I buy shares. Costs me nothing. I'm about to open a new BMO's smart savers's account -- it earns 2.75% provided you maintain a minimum balance of$5000, but you get only one free withdrawn/transfer out per month.


My chequing is at PCF. There is a one day delay transferring money from PCF savings (currently 2.25% for amounts above $1K) to PCF chequing, and then the delay from there to the broker. The way I envision my models working is that I will get a buy signal after the markets close, and I will carry out the transactions the next morning.

I also have a savings account at ING (2.7% on entire balance), but I don't believe I can transfer funds directly from there to a broker.
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