Category Archives: InvestorLine

Is There a 90 Day Holding Period for the High Interest Savings Accounts Offered by BMO InvestorLine?

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When I first started investigating high interest savings account options with BMO InvestorLine I believed that they were sold as mutual funds. That made me wonder: is there a 90 day holding period for the HISAs offered by InvestorLine?

Written: 2012
Reviewed: 2023
Revised: 2023

Mutual Funds Require a Minimum Holding Period of 90 Days…
The Mutual Fund Order Entry screen includes a statement that “All mutual fund orders are subject to BMO InvestorLine Investment Policies and Minimums or third party fund company minimums.” When you read the 2022 Commission and Fee Schedule it clearly states:

“Early Redemption Fee: Exempting Money Market and TBill funds and back load (DSC) funds, an early redemption fee of 1%, subject to a minimum of $43 ($35 for electronic orders) will be charged for funds held for less than 90 days. Switch orders are subject to the same early redemption fee.”

…But Are High Interest Savings Accounts Mutual Funds?
I decided to ask BMO InvestorLine directly to clarify this using their MyLink internal email system. The reply surprised me.

“High Interest Savings accounts are not mutual funds.

“They bear variable interest rates and can be redeemed any time. There is no lock in period like GIC and no need to keep it for 90 days to avoid being charged Early Redemption Fee of $35 for redeeming it like any mutual fund trade.

“We process the trades of these High Interest Savings products through mutual fund trade platform, but they are not mutual funds.

“Unlike mutual funds, they are guaranteed by CDIC up to $100,000.”

(On the High Interest Savings Account page, BMO links to CDIC insurance information.)

I think that they need to update their system to create a new Order Entry screen for these accounts, or they need to update their Investment Policies and Minimums screen to include High Interest Savings Accounts along with Money Market funds and TBill funds as being exempt from a holding period.

High Interest Savings Accounts are Not Subject to a 90-day Minimum Holding Period

So the verdict is that the high interest savings accounts offered by BMO InvestorLine are not subject to a 90-day holding period.

This is good news.

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

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BMO InvestorLine permits investors to hold cash in certain High Interest Savings Account mutual funds. There is a minimum investment and a minimum additional investment.

Written: 2012
Reviewed: 2023
Updated: 2013; 2023

Prior to September 2013, you could invest in HISA mutual funds issued by several different financial institutions. After 2013, BMOIL only offered its own HISA mutual funds.

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 $31 in dividends where it will earn interest while I wait to accumulate enough to buy something useful.”

Be careful of using non-BMO mutual funds to park your cash for a short time in a BMO InvestorLine account. Some mutual funds charge a fee if they are bought and then sold within a short period of time, such as within 90 days after their purchase. There is no fee for buying and selling the BMO InvestorLine linked HISA funds but there is no such guarantee for other funds. Read any details and confirm by phone with InvestorLine if there is any doubt about a fund you are considering buying.

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

It did once upon a time.

So Where Can I Put My Cash at BMO InvestorLine?

BMOIL does offer some BMO Money Market and T-bill funds You can check the site for details on initial minimum purchases and minimums for subsequent additional purchases of the same fund. Be aware that Money Market funds can lose money. I am not sure if T-bill funds can lose money or not. You should check before purchasing any.

BMOIL does offer some cashable GICs. You should carefully read any terms and conditions. Some cashable GICs can only be redeemed (cashed out) at least 30 calendar days prior to maturity. Cashing early also often forfeits all of the interest earned. Make sure you understand the rules before you buy.

BMOIL offers high interest savings account mutual funds for cash deposits in both Canadian and US dollars. These funds calculate interest on the lowest daily balance and pay it monthly. The funds are CDIC insured subject to the usual limits.

What Mutual Fund High Interest Savings Accounts in Canadian Dollars and US Dollars Does BMO InvestorLine Sell?

In 2023, InvestorLine is offering 3 Canadian dollar high interest savings account funds, called BMT104, BMT109, and BMT114. In 2023 BMO InvestorLine is offering 3 US dollar high interest savings account mutual funds called BMT124, BMT129, and BMT134.

As with regular bank savings accounts, the interest rate can and does change often.

There is a minimum purchase and holding requirement of $1000 CAD for the Canadian dollar funds and $1000 USD for the US dollar funds.

Additional purchases require a minimum of purchase of $50 CAD or $50 USD respectively.

The settlement date for the purchase or sale of units of a fund are the Transaction Date plus One Business Day. Be careful that you submit the purchase or sale request early enough to meet the closing time for the mutual fund desk (which can be earlier than the close of the stock market.) Also be aware of which days are business days for the mutual fund, as this can be affected by US holidays, federal holidays etc.Just because we have to work doesn’t mean everyone is working that day!

In 2012 and 2013, InvestorLine sold units of a fund called AAT770 for Canadian dollar investments and AAT780 for US dollar investments. These funds have been re-named.

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

This article focuses on investors with LIRA, RRIF, 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 within registered accounts.

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