Tag Archives: fixed income GICs

How to Buy a US Dollar GIC at Tangerine

Posted on by

We have some US dollars in a savings account at Tangerine, currently earning 0.6 % interest. We know our trip to the US to spend this money is a bit over a year away, though. So when I noticed Tangerine was currently offering 3.0% for a one-year non-redeemable US Dollar Guaranteed Investment Certificate, aka GIC, I decided to buy one.

Can I Redeem my US Dollar GIC at Tangerine Early if my Plans Change and I Need the Money?

No.

So be very sure you won’t need the money before you lock it up in a GIC. It will be stuck there until the GIC matures at the end of its term.

I know we won’t desperately need the money even if our plans change so I’m prepared to lock it in for a higher interest rate for a year.

What’s the Minimum US Dollar GIC Purchase at Tangerine?

As of November 22, 2018, the minimum size of the GIC is 10 US dollars.

What Do You Need to Have Nearby to Complete the USD GIC Purchase?

If you already have a Tangerine account, you won’t need anything.

If you don’t, you will need your banking details including your Social Insurance Number (SIN) for Tangerine to report your GIC interest to the CRA so you pay your taxes on it.

The process will be more complicated if you are not a Tangerine customer. This article only lists the steps needed for a customer with a US dollar Tangerine bank account, like me.

Buying a USD Guaranteed Investment Certificate at Tangerine If You Already Bank with Tangerine

  1. Go to the Tangerine website.
  2. Click on the Log Me In button and sign in to your account.
  3. Near the top of the screen, click on the link: Products
  4. Under the Saving column, click on the link: Guaranteed Investment
  5. Although it does not say US anywhere on it, under the heading Tangerine Guaranteed Investment (GIC) (Non-Redeemable) click on the button: Open an Account

The Confirm Accounts Step

A big messy screen is displayed listing everything from regular Canadian dollar GICs at the top, to Chequing Accounts, HELOCs, Credit Cards, and way way down almost at the bottom:
US$ Guaranteed Investment (GIC)

  1. Read through the details. If desired, click on the Learn More button.
  2. Click on the button: Add
  3. It appears nothing has happened—but it has!
    Way down at the bottom of the screen, you will see a message
    2 Account(s) added.
    Scroll way up to the top of the page.
    If it says Guaranteed Investment (GIC), click on the button: Remove.
    That one was there because when I clicked on the choice Guaranteed Investment it started a regular Canadian dollar one for me, which I didn’t want.
    You should be left with only a
    US$ Guaranteed Investment (GIC) under the heading
    Account(s) you’re opening
  4. When that’s all that is listed, click on the Next button.

The Confirm Information Step

  1. Read through and review your information is correct.
  2. If it is ok, click on the Next button.
  3. Read the information presented. Notice to make the GIC a joint one you will have to PHONE in!
    Click on the Next button.

The Set up Account Step

  1. Read and answer the Third Party Information & Intended Use question.
    I clicked on No.
  2. From the drop-down list, answer the question What is the Intended Use of this Account?
  3. Read through the US$ Guaranteed Investment (GIC) Account Terms.
    If they are acceptable, click to check the box beside them.
  4. Read through the documents electronically information.
    If it is acceptable, click to check the box beside them.
  5. Click on the Next button.
  6. From the drop-down list select the term for the GIC noting that you will NOT be able to get your money back until the end of that term.
    The interest rate for that term will be offered.
  7. Click to select at maturity to
    Reinvest the original amount in a GIC with the same term
    Or
    Payout the original amount in case to a selected account
  8. Click to select to
    Pay the interest back into the GIC annually to keep earning more interest
    Or
    Pay the interest annually into a selected account.
  9. Click on the Next button.
  10. If you are depositing the matured GIC into a bank account, click to select the account to pay it into, or click to open a new USD savings account.
  11. If you are depositing the interest into a bank account, click to select the account to pay it into. Note if you select a Canadian $ account, Tangerine will convert the USD to Canadian before depositing them.
  12. In the text box, type the amount of US $ you want to deposit in the GIC. You will not be able to get at those $$ again until the GIC matures at the end of its term.
    This is a non-redeemable GIC.
    The minimum is $10.
    As usual, note that CDIC does not insure US$ GICs or US$ savings accounts.
  13. Click on the Next button.
  14. If you’d like to buy the US$ GIC now, click on the Now button, otherwise
    Click on the In the Future button and set the date to buy the GIC.
  15. Review the details of your GIC purchase.
    Interesting to note
    They MAY allow early redemption if an application is approved for hardship reasons.
    If you do choose to have the GIC automatically renew for the same term when it matures, you will have 30 days after that to change your mind and cash it out.
  16. If it all looks ok, click on the Submit button.

The Wrap Up Step

  1. Make a note of the information about your GIC purchase.
  2. If you want to have a joint owner for the GIC, phone in to Tangerine.
  3. Click on the Done button.
    It may take you back to the “Add an Account” page.
  4. If you are finished banking, Log Out of your accounts. For increased security close your browser session and clear your cache.

Can I Have a Joint Owner on a Tangerine US Dollar GIC?

Yes. But you will have to set it up as a single owner, then PHONE IN to get the second owner listed.

And worse yet, you both have to phone in, either at the same time, or the secondary owner can phone in after the person who bought the GIC phones in. What a pain!

In each case, the person phoning in will need to know

  • their own client number
  • the co-owners client number and
  • the purpose of the GIC purchase as selected when the GIC was purchased

Hint: Make sure that the person who will be paying the tax on the interest earned is the primary holder if you want the T slips to be easier to work with come tax time.

Personally, I think that having this phone in step required is not a great design. It took me 15 minutes on hold (from 11 38 till 11 53 a.m. on a Thursday) to try to add my husband as co-owner to my GIC–and then I found out he will also have to phone in!

Overall, though, I’m glad I bought the GIC. It has increased the interest rate on that money from 0.6% to 3.0% for a year. That should be enough to buy one of us a flip flop when the time comes to spend it!

Related Reading

Join In
Do you park your US dollars in a savings account or GIC between US purchases? Please share your experiences with a comment.

 

What’s New for Tax Time for Your 2015 Return Due April 2016 If You Have Children?

Posted on by

It’s that most horrible time of year again: tax time. I got my forms in the mail and took a peek at the T1-General Guide. I don’t usually look at car accidents but somehow I can’t help but look at the tax guide once I see it sitting on the table….Here’s what I found that’s new for a 2015 tax return for filers who have children.

Why Did I Get a RC62 Universal Child Care Benefit Statement in the Mail?

If your children were 6 or older but younger than 18 you may have received payments last year of the revised Universal Child Care Benefit.  It may have been quite a while since you last received any UCCB and you may have forgotten that it is taxable. Or at $60/month per eligible child aged 6-17, you might not even have noticed the money landing in your account.

Now, unfortunately, since the election is long past, we have to pay the taxes on that money.

That’s right, they didn’t withhold any taxes at source but the “benefit” is taxable income in the hands of the lower-earning parent.

So I will get to pay back about half of what we received.

There is also no longer any non-refundable tax credit for having a child of any age.

You report the amount you received, which is reported in Box 10 of your RC62, on line 117 of your return if you are the lower-net-income spouse or common-law partner.

What Happened to My Federal Non-refundable Tax Credit for My Children?

You used to claim $2 255 per child of the appropriate age on the Federal Tax Schedule 1 form on line 367. (By the time you finished the math, it was only 15% of that amount, or $338.25 per child.) If you are looking for it on the 2015 schedule, you won’t find it.

The problem with the non-refundable credit was that if a family was really low income, they weren’t paying any tax so they could not apply the credit to save any money.

Starting in 2015, the credit has been removed and instead all families get a taxable Universal Child Care Benefit. If the family is really low income, they will not have to pay any tax on this benefit and therefore it will help them. If a family has a moderate or high income, they will have to pay back some or a lot of this benefit both as federal income tax and as provincial income tax.

If your income was $75 000 a year before the $720 a year benefit for your one 7-year-old child, you will probably only get a benefit of $483 after tax in Ontario, based on using the Ernst and Young 2015 online personal tax calculator.

That’s about $145 more than the old non-refundable tax credit gave you. But it’s a lot less than the $720 that the advertisements were bleating about before the election!

If your income was $200 000  a year before the $720 a year benefit for your one 7-year-old child, you will probably only get a benefit of $346 after tax in Ontario, based on using the Ernst and Young 2015 online personal tax calculator. That’s very close to the old $338.25 per child that the non-refundable tax credit covered.

New Tax Form: The T4-A(P) for the CPP Children’s or Child’s Benefit

Many taxpayers have been dismayed to open envelopes this month and find a new tax slip: a T4-A(P) for their child or children’s benefit received from the CPP because one of the child’s parent’s has died. In previous years the government did not automatically send out this slip.

You can read what needs to be done with the slip by the parent, or child, over on Helpful Crooks.

Stay tuned for more exciting tax news!

Related Reading

Join In
Does your mail box suddenly start overflowing around this time of year with tax slips? Did you get any new ones this year? Please share your experiences with a comment.