Stop the presses! I’m checking for further details on how the BMO InvestorLine high interest savings account funds operate. While it is true that the minimum initial purchase of any of the accounts is
$25,000, it is not necessarily true that a minimum balance of $25,000 must be maintained after the initial purchase. It’s possible that you may only have to maintain the minimum balance set by the issuer of the account. That may be as low as $1000.
UPDATE: As of April 11, 2013, BMO InvestorLine is offering the BMO AAT770 and AAT780 funds with minimum purchase amounts of $5,000. That basically makes this article irrelevant, except as a historical news article.
Of course, figuring out these details may be of limited interest to some investors. If you don’t have $25,000 in cash ready in to invest, and you don’t foresee having that amount for a very long time to come, you may not care.
But what if you have, or could have, $25,000 for a short time. You could create a high interest account. If, soon after depositing, you could withdraw a large amount of that investment, say $23500 and still keep the account with a balance of 1500, it might get more interesting. Then you might be able to add new contributions when you sell stocks and take them out again when you want to buy stocks. That would let you earn daily interest at a good rate on only a few thousand dollars while you wait for an opportunity to buy another stock at a good price.
Unfortunately, it is true that additional purchases for an existing account must be at least $500. So it would not be possible to add the $57.48 from a recent dividend payment immediately into the high interest account. You would have to combine that $57.48 with other dividends or cash to make up the minimum $500 deposit size. Although already I’m wondering….What if you had to keep a balance of $1000, but you kept a balance of $1501. Then, you could withdraw $500, combine it with the $57.48, and reinvest $557.48….Hmmm, obviously I need more information!
UPDATE: As of September, 2013 you can only invest in high interest daily savings account funds issued by BMO, namely AAT770 and AAT780 from what I can find on their site. The minimum balance remains $5,000.
- Investing in the AAT770 HISA at BMO InvestorLine
- Investing in High Interest Savings Account Mutual Funds in BMO InvestorLine Accounts.
Have you invested in a high interest savings account through InvestorLine or another online self-directed brokerage account? Has it been useful? Please share your advice and experiences with a comment.