Investing in High Interest Savings Account Mutual Funds in BMO InvestorLine Accounts

BMO InvestorLine does permit investors to hold money in High Interest Savings Accounts offered by other financial institutions such as ICICI, Dundee, and Altamira. However, the minimum investment is $5 000 $25,000 and additional purchases have a $500 minimum. And if your balance drops below $25,000 you have to withdraw the entire amount.


UPDATE 2013 09: As of September, 2013 you can no longer invest in high interest daily savings account funds issued by ICICI, Dundee and Altamira unless you have exceeded the CDIC insured limit of $100 000 in a HISA from BMO. You can still invest in BMO’s own AAT770 and AAT780 high interest savings account funds. The minimum investment and balance remains $5,000.

UPDATE 2013 04 11 BMO InvestorLine now offers a BMO-issued HISA with a $5,000 minimum balance. All other HISAs still have a $25,000 minimum. For more information, please see Investing in the AAT770 Daily High Interest Savings Account Fund for BMO InvestorLine Accounts.

So this type of savings account mutual fund might be worth considering if you are going to need a large amount of cash in a fairly short time-frame. However, it’s not an ideal solution to the classic problem of “where can I put $312 in dividends where it will earn interest while I wait to accumulate enough to buy something useful.”

Even if other high interest savings accounts posing as mutual funds are available through InvestorLine, for which InvestorLine has not explicitly set a $25,000 minimum, it is unlikely finding one would help to solve this problem. InvestorLine has a requirement that mutual fund purchases of non-BMO mutual funds must be held for a minimum of 90 days. If they can be redeemed within 90 days, there is a fee of 1% with a minimum charge of $43. There is no maximum to the fee!

InvestorLine also requires a minimum initial purchase of $1000 for non-BMO mutual funds, with a minimum of $500 for additional purchases of a mutual fund after the initial $1000 purchase. So again, if you have $312 to park, you can’t park it here.

Doesn’t BMO Pay Interest on Cash Balances in its InvestorLine Accounts?

It did. You can still find links all over the site to look up the rates for cash in the InvestorLine account. However, when you follow the links, you find that the current rate is 0%. I guess we should be pleased that they couldn’t figure out how to program minus percents!

What about non-BMO Money Market Funds?
For money market funds not issued by BMO itself, there is a minimum investment of $25,000. Subsequent additional purchases of the same fund have a minimum of $500. All units must be redeemed if the balance drops below $25,000.

So Where Can I Put My Cash?
If you buy a BMO mutual fund or BMO Guardian Fund, including Money Market and T-bill funds, the initial minimum purchase is $500 or the fund minimum. Subsequent additional purchases of the same fund have a minimum of $50.

You can also buy a cashable GIC. The minimum cashable GIC purchase is $10,000. According to InvestorLine:  “All Cashable GICs can only be redeemed within the cashable period up to 30 calendar days prior to maturity. You will receive no interest if you redeem your cashable GIC prior to the “Cashable after” period of 30, 60 or 90 days depending on the GIC you are purchasing.” A cashable GIC may be fully redeemed online. A partial redemption must be completed by phoning an InvestorLine representative on business days between 8 a.m. and 8 p.m. ET.

Rates for GICs cashable after 30 days

  • ranged from 1.15% to 1.25% on April 11, 2013
  • were 1.15% on February 2, 2014.[updated]

Rates for GICs cashable after 90 days

  • ranged from 1.15% to 1.35% on April 11, 2013.
  • This product was not available on February 2, 2014.[updated]

 

What Mutual Fund High Interest Savings Accounts Does BMO InvestorLine Sell?

As of November 2012 and April 2013, InvestorLine was offering to sell:
BMO AAT770

As of February 2014 the following products were no longer available without discussion with an InvestorLine sales representative. They may be available if you have exceeded your $100 000 CDIC insurance limit for BMO products.
Altamira NBC100
Dundee DYN500
ICICI IBN100
Manulife MIP710
Manulife MIP510
RBC RBF2010
Renaissance ATL5000
TD TDB8150

In April 2013, all were offering a 1.25% interest rate except BMO AAT770 which was offering 1.27% and ICICI which was offering 1.2%.

UPDATE:

  • As of February 2, 2014, BMO ATT770 is offering 1.25%.
  • As of April 11, 2013 InvestorLine was offering to sell BMO AAT770 at a 1.27% interest rate.

There is a minimum purchase and  holding requirement of $5,000 for the BMO AAT770 fund.

What USD Mutual Fund High Interest Savings Accounts Does BMO InvestorLine Sell?

They were also offering to sell $25,000 purchases of US dollar high interest savings account mutual funds from the following companies:
BMO AAT780

As of February 2014 the following products were no longer available without discussion with an InvestorLine sales representative.
Altamira NBC101
Dundee DYN400
ICICI IBN200
Manulife MIP511
RBC RBF2014
TD TDB8152

UPDATE:

  • As of February 2, 2014, BMO’s ATT780 is offering 0.25%.
  • As of April 11, 2013, they are offering BMO AAT780 which is paying a rate of 0.25%
  • On April 2013, all were paying 0.2% except BMO AAT780 which was paying 0.25% and IBN200 which was paying 0.15%.
  • As of November 2, 2013, each was paying 0.2% interest.

Why Not Just Connect to Another Institutions High Interest Savings Account?

This article focuses on investors with RRSP, RESP or TFSA accounts at self-directed brokerages. For these accounts, there is a high fee for transferring funds out to another institution. HISA funds offer an important option.

See also:

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Do you find it difficult to find a place to park a small amount of cash while waiting to re-invest it? Have you found another way to optimize your investments? Please share your experiences with a comment.

7 thoughts on “Investing in High Interest Savings Account Mutual Funds in BMO InvestorLine Accounts

  1. Pingback: High Interest Savings Accounts at Discount Brokers | Canadian Capitalist

  2. Stumbled on your posts on Investorline, very relevant and informative. Thanks

    FYI that BMO has their own high interest savings accounts with only $5k mins now. $25k mins are ridiculous. At least this option is better although still not ideal compared to Waterhouse minimums.

    AAT770 BMO-AAT CAD HIGH INTEREST SAVINGS ACCOUNT @ 1.27%
    AAT780 BMO-AAT USD HIGH INTEREST SAVINGS ACCOUNT @ 0.25%

    They did a poor job informing their clients as I just came across it while browsing the GIC section, so not sure how long they’ve been available.

    • Many thanks! I’ll check into this right away, test it out, and put up the new information. The interest rate looks reasonable, too, which is a pleasant surprise.

  3. Update to the BMO InvestorLine info as of 2013-11-22

    I called the number provided by BMO InvestorLine for clients who will exceed the $100K CDIC coverage limit and spoke to a live person about other Fund-based Investment Savings Accounts. The following were available:

    AAT770 BMO HIGH INTEREST SAVNGS ACCOUNT(BANK OF MONTREAL)
    ATL5000 RENAISSANCE HIGH INTEREST SAVINGS ACCOUNT(CIBC)
    DYN1300 BNS INVESTMENT SAVINGS ACCOUNT(SCOTIABANK)
    DYN500 HOLLIS INVESTMENT SAVINGS ACCOUNT (DUNDEE BANK)
    BTB100 B2B BANK HIGH INTEREST INVESTMENT ACCOUNT (LAURENTIAN BANK)
    IBN100 ICICI Bank HIIS
    MIP710 MANULIFE TRUST INVESTMENT SAVINGS ACCOUNT (MANULIFE FINANCIAL)
    MIP510 MANULIFE BANK INVESTMENT SAVINGS ACCOUNT (MANULIFE FINANCIAL)
    NBC100 ALTAMIRA HIGH-INTEREST CASHPERFORMER (NATIONAL BANK)
    RBF2010 RBC INVESTMENT SAVINGS ACCOUNTSERIES A(ROYAL BANK OF CANADA)
    RBF2020 RBC INVESTMENT SAVINGS ACCOUNTSERIES A(ROYAL BANK MORTGAGE CORPORATION)
    RBF2030 RBC INVESTMENT SAVINGS ACCOUNTSERIES A(ROYAL TRUST CORPORATION OF CANADA)
    RBF2040 RBC INVESTMENT SAVINGS ACCOUNTSERIES A(THE ROYAL TRUST COMPANY)
    TDB8150 TD INVESTMENT SAVINGS ACCOUNT(THE TORONTO-DOMINION BANK)
    TDB8155 TD INVESTMENT SAVINGS ACCOUNT(TD MORTGAGE CORPORATION)
    TDB8157 TD INVESTMENT SAVINGS ACCOUNT(TD PACIFIC MORTGAGE CORPORATION)
    TDB8159 TD INVESTMENT SAVINGS ACCOUNT(THE CANADA TRUST COMPANY

    If you want to buy a third-party Investment Savings Account (ISAs) at BMO InvestorLIne, you have to talk to a live person. Once the third party ISAs are in your account, you can redeem them online.

    • Thank you for sharing this information. It’s very interesting.

      Does the old $25,000 minimum purchase requirement still apply?
      Is there any penalty for redeeming within the first 90 days?
      (I’ll try to check into those limitations myself if you’re not able to reply.)

      Thanks again!

  4. When I recently looked at my investorline account, I noticed something really unusual. I had an unrealized loss in my HISA (high interest savings account). The amount of the loss was not too much, but, I would expect a zero unrealized loss or gain in this type of account. Does anyone know how this is possible?

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