Tag Archives: BMO

How to Set Up a US Dollar Ledger or Side for a BMO InvestorLine RRSP Account

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If you have an InvestorLine RRSP account you can buy US stocks paying for them in Canadian dollars and receiving any dividends, interest or distributions they pay out in Canadian dollars. You will have to pay InvestorLine a foreign exchange fee, though, each time you buy a US stock or each time you receive money in US dollars that has to be converted back to Canadian dollars. There is an alternative: you can set up a US Dollar account within your existing InvestorLine RRSP account.

Why Might You Want a US Dollar Sub-Account within your RRSP?

Every time you listen to the business news on the radio or skim a news website, you will hear or see what the current exchange rate is for the Canadian dollar versus the American dollar. That’s because the exchange rate changes constantly. As recently as 2002 the Canadian dollar was only worth about 62 cents US; in 2007, the CAD was worth $1.10 US. That’s quite a range. (This is information from the Bank of Canada website at http://www.bankofcanada.ca/rates/exchange/can-us-rate-lookup/.)

This variability means you may pay more to buy one US dollar on one day than on another. Or, conversely, you might get more Canadian dollars for each US dollar you earn in dividends in one month than in another.

If you have a US dollar sub-account you can do all of your US business using US dollars. You can keep any US cash in a US cash account ready to re-invest. If you need more US dollars, you can choose when to buy them based on a good exchange rate. Similarly, you can wait till the foreign exchange rates are favourable before moving money back into your Canadian currency account.

For example, if you hold shares in Walmart in the US dollar side of your RRSP account, you will receive the dividend payment in US dollars into your US dollar cash account. You can then use it to buy more US dollar investments without ever paying a foreign currency exchange fee.

How Do I Set Up a US Dollar Sub-Account within my InvestorLine RRSP?

At first I thought I could do this by selecting something online but I can’t.

To set up the US side of my account, I phoned BMO InvestorLine at 1 888 776 6886.

As usual, I needed to provide my InvestorLine account number and my access password.

When I spoke to an InvestorLine representative, he assured me the US side of my account could be set up quickly and easily based on my phone call.

How Soon Will I See a US Ledger or Journal for my BMO InvestorLine Account?

If I understood correctly, I will see this new part of my account tomorrow, one business day after I requested its creation. I’ll update this post then.

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Do you use a US side or ledger for your InvestorLine account? Do you wish CIBC Investor’s Edge accounts had one? Please share your experiences with a comment.

Testing a Buy (and Sell) of AAT770 in a BMO InvestorLine Account: Part One, the Buy

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Stock prices for some of my favourites for “month trading” (like TD) have been soaring, diving and swooping back up off the grass like my favourite Penguin kite. (You do know Penguins can’t fly, right?) So I have a small pile of cash sitting in my trading account at BMO InvestorLine. I think I’ll buy some AAT770, the BMO high interest savings account fund, and then if one of my favourites starts heading for the dandelions I’ll sell it to fund a stock purchase.

Since stock prices are high on my favourites today, I can start this test now. If they start to plummet, though, I’ll want to bail quickly. So for this first stage, I’ll put in the buy order.

Tracking a Request to Purchase AAT770 from InvestorLine

Following my own instructions on how to buy AAT770,  I’ll place an order today.

At 12:55 ET on Monday, July 8 2013 I placed the order.

Immediately, when I select Order Status from the Trading Tab, I am provided with the following information:

  • the original order number
  • the symbol: AAT770
  • a description: BMO High Int Sving Account(BIL)
  • the order type: Buy
  • the original order quantity: $2,000,000 (Why don’t you believe me?!)
  • the outstanding quantity: blank
  • the entry date mm/dd: 07/08 (Good thing they clarify which one is the month)
  • the expiry date mm/dd: blank
  • the average fill price: blank
  • the status: submitted

The word submitted is a link but if I click it what opens is a definition of the term.

The original order number is also a link. If I click it the Order Status Details screen opens. That screen has the following information already (minutes after I placed the order.)

  • Original Order Number
  • Symbol: AAT770
  • Fund Name: BMO High Int Svng Account(BIL)
  • Reference Number: this is the same number as the original order number
  • Order Type: Buy
  • Order Quantity/value: $2,000,000 (Honest! Would a Crooks lie to you? OK maybe I exaggerate sometimes.)
  • Load Type: No Load
  • Most Recent Closing Price: $1.00
  • Dividend Option: Reinvest (which is what I asked for when I submitted the order)
  • Settlement Funds: CAD
  • Status: Submitted (same link to the definition)
  • Activity Date/Time: 2013-07-08 12:56

And an informational note:
“This order cannot be changed or cancelled for the following reason:
•  Mutual Fund and/or Fixed Income orders cannot be changed or cancelled online.”

My account balance is also shown in a small box in the upper right side of the screen. At this point it still shows a Cash Balance that *includes* the amount I have just committed to invest in the high interest savings account fund, AAT770.

If I click on the My Portfolio tab, I also still see the amount I just spend included in my Cash balances. That means it’s important to be careful not to overestimate how much cash I have left to spend on equities or other investments today.

At this time, the HISA fund is not appearing on my list of Investments on the My Holdings page.

If I select Transaction History from the list under the My Portfolio tab there is not yet any transaction listed. It does not list the order to buy the fund.

Stay Tuned
Tomorrow, I will check these reporting mechanisms again and see what BMO InvestorLine reports to be happening with my request to purchase this HISA fund. In the meantime, I will have to write a reminder on a sticky note on my monitor not to spend the $2,000,000 I just committed to buying the fund. ; )

Welcome Back: The Buy Continues
On Tuesday, July 9

  • By selecting Order Status under the Trading tab I reviewed my order to buy AAT770. It has now been updated to the Order Status of Filled.
  • Under My Portfolio, I selected Holdings.
    • My Cash Balance has still not been reduced by the amount I spent on the HISA. This is where having that sticky note on the monitor could be very important!
    • My purchase of the AAT770 is still not reported anywhere under My Holdings.
  • Under My Portfolio, I then selected Transaction History.
    Nothing is reported here yet either.

On Wednesday, July 10

  • Under the Trading Tab and selection Order Status I can still see the same Filled information as yesterday and nothing new.
  • Under My Portfolio, after I select Holdings, I see
    • my Cash Balance has finally been reduced by the amount of dollars I deposited in my High Interest Savings Account fund, and
    • under Investments, there is a line item for BMO High Int Svng Account (BIL) – AAT770
  • (If I select Categorize by Asset Class and click the Go button, the line is listed in the Cash equivalents section under the subheading Mutual funds. This is somewhat amusing to me as when I emailed MyLink about these accounts they replied in writing that these are not actually mutual funds. They sure look like they are when you buy them and sell them using the Mutual Funds screen and they report their values under the Mutual Funds subheading!)
  • Under My Portfolio, if I select Transaction History I can now see the line item for the Buy order. Although this is the first time it has shown up, on July 10, it states the activity had a Transaction Date of July 9 and a Settlement Date of July 9.

After the Purchase, the Sale
Now I will enter an order to sell some of my units. I will follow my own instructions in How Fast Can I Sell my BMO InvestorLine AAT770 HISA to Generate Cash to Re-invest?

You have to maintain a balance of at least $5000 but I deposited enough to remove a $5000 portion of the units and still leave over $5000 in the fund. $1,995,000 to be exact. (What do you mean you don’t believe me? Sheesh. I guess I won’t be selling you my shares in Nortel.) UPDATE As of 2017 10 03 the minimum balance is $1 000.

To find out what happens, please read Testing a Buy and Sell of AAT770 in a BMO InvestorLine Account Part Two: the Sell.

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Are you parking your cash waiting for a sweet deal? Do you use a HISA account to try to earn a few bucks while you wait? Please share your experiences with a comment.