Tag Archives: BMO

Where Can I Get the Best Rate of Return on my RRSP GIC?

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If you’re planning to take money out of your RRSP for the Home Buyers’ Plan or Lifelong Learning Plan you may need to keep it safe in either a cash account of a short-term GIC. Or you may just want to keep some of your fixed income RRSP investments in GICs. Whatever the reason, it’s getting harder each year to find a decent interest rate for your GICs. Today I went searching around the internet to see what types of rates are on offer. I was disappointed to find that very few places are offering a promotion with a good rate for this RRSP season. Here’s where I found the best (and worst) rates for RRSP GICs.

RRSP GIC Rates Vary Daily: Be Wary

These are the rates being offered on Monday February 9 2015. They are subject to change without notice but may give you some idea of where to start looking. Please be sure to call and confirm a rate before applying!

A Comparison of RRSP GIC Rates February 2015

Place Cash deposit rate 1 year GIC 5 year GIC Insurance and Other Comments
BMO 0.1% 1.0% min $1000 1.5% min $1000 A 5-year RateRiser Max GIC has an annual equivalent rate of 1.82%CDIC insured
CIBC 0.25% 0.65% min $500 or0.75% on Bonus Rate RRSP GIC min $500 1.5% min $500 or1.5269% on Escalating Rate GIC min $500 CDIC insured
DUCA n/a 1.8 % min $500 2.6% m in $500 DICO insured
Meridian n/a 1.4% min $500 2.1% min $500 3 month term GIC with an annual rate of 3% min $500 DICO insured
Oaken Financial n/a 1.9 min $1000 2.6 % min $1 000 1.75% min $2500 cashable after 90 days CDIC insured
PC Financial 0.50 % 1.05% 1.8% CDIC insuredFee to transfer out
People’s Trust n/a 2.4% min $1000 2.65% min $1000 Currently no transfer fees! CDIC insured
Tangerine 1.05 % 1.05 1.8 % CDIC insuredFee to transfer out
BMO InvestorLine 1.00 % min $5000 1.5% min $5000 2.05% min $5000 CDIC insured
CIBC Investor’s Edge 1.1% min $1000 1.4% min $5000 2.05% min $5000 CDIC insured
RBC Direct Investing 1.0% min $500 1.5 % min $3500 2.05% min $3500 CDIC insured

Note: None of these GICs can be cashed before maturity unless otherwise noted. Be sure to check the terms and conditions before buying any GIC.

People’s Trust Is Offering the Best RRSP GIC Rate and Deal (At Least for Today!)

So the best rate I could find today for a 1-year term, RRSP GIC was from People’s Trust. They are offering 2.4%. They are also insured by CDIC. That’s the same one that insures big bank GICs like those offered by BMO and CIBC.

At this time, People’s Trust is also advertising that it does not charge any fees for transfers. That’s great news but always be aware that they could change that just like Tangerine did.

Upon maturity, your People’s Trust RRSP GIC will be re-invested for the same term if you don’t give alternate instructions. You can also change the instructions for 10 days after it matures. I’m not quite sure how you are supposed to handle it if you want to transfer the money out to another RRSP at maturity. I think you could do it by specifying on your transfer form that you want the transfer to be effective on the date the GIC matures. (It may also be possible to transfer the GIC in kind to a brokerage. You can discuss that with your brokerage ahead of time.)

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Comparing Canadian to US Dollar Cash Exchange Rate Options

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A reader was checking recently about how to use Tangerine to buy USD and then transfer them to another bank to withdraw the US cash. It made me realize it’s been a while since I compared exchange rates offered by various banks. Now that Scotiabank owns Tangerine (formerly ING Direct) does it still offer a reasonable US dollar exchange rate or not? Here’s a comparison of some US dollar exchange rates.

Where Should I Buy My US Dollars?

Note: Exchange rates change frequently. Always check with your bank before you make a big exchange in case a better deal is out there. Also, for those with non-registered brokerage accounts and a large amount of money to exchange, consider using Norbert’s Gambit.

Here, in order of “getting the most US dollars for your Canadian dollars” are the banks and credit unions I compared.

All of these rates were posted online rates on December 26 2014. Rates change frequently. These rates are how many Canadian dollars and cents you would have to pay to buy ONE US dollar.

  1. Tangerine buy USD at 1.185
    http://www.tangerine.ca/en/rates/index.html
  2. Vancity buy USD at 1.1852
    https://www.vancity.com/Rates/ForeignExchange/
  3. National Bank buy USD at 1.1880 Includes a mysterious comment about checking the rate that your branch can offer. I’m not sure if that means it will cost more at the branch or less!
    https://www.nbc.ca/en/rates-and-analysis/interest-rates-and-returns/exchange-rates.html
  4. RBC buy USD at 1.1894
    http://www.rbcroyalbank.com/cgi-bin/travel/currency-converter.pl?tabset=table&ProspectID=FBD04E151BAD443DA6FE69802DC489DC
  5. BMO buy USD at 1.1895
    http://www.bmo.com/home/personal/banking/rates/foreign-exchange
  6. Scotiabank buy USD at 1.190500
    This appears to be for cheques not cash in which case the actual rate is worse than this.
    http://www.scotiabank.com/ca/en/0,,1118,00.html
  7. TD buy USD at 1.1930
    (No wonder my TD stock keeps going up in value!)
    http://www.tdcanadatrust.com/customer-service/todays-rates/rates.jsp

CIBC, Meridian and PC Financial seem to need you to phone in for their rates so I didn’t include them here.

So Tangerine does still seem to be offering a good rate.

Other Factors Determining the Exchange Rate

Some banks and credit unions offer a better exchange rate for non-cash exchanges. For example, if you are “cashing” a cheque payable in USD into CAD they may offer a better exchange rate because they never have to actually handle US paper dollar bills.

The more money you have to exchange the better rate you can get. Tell them you need to convert $1 million and you will get a much better rate offered than if you have to convert $100.

If a currency is unusual and little used in Canada, the exchange rate offered will usually be quite poor. Getting or getting rid of the paper currency will be a nuisance for the bank and they will charge more for their hassle.

If you have a large amount of money to convert and have a non-registered brokerage account you may want to use a method of buying and selling a mutual fund or stock that is listed on both a Canadian and an American stock exchange to convert your cash. This procedure is commonly called Norbert’s Gambit after the person who first wrote about it as a cost-saving tool.

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How do you convert your Canadian dollars to US dollars? Do you use a bank because it’s quick and convenient? or a forex service? or a brokerage? Please share your technique with a comment.