Tag Archives: GICs

CIBC vs ING Direct to Investor’s Edge RRSP: the Race is On

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As I keep droning on and on about till I start foaming at the mouth and fall over backwards (although I’m not a Candidate for the Conservative party), we have/had a lot of RRSP GICs and similar cash investments scattered around that needed consolidating in our brokerage accounts. The problem is that most GICs cannot be transferred intact. Instead, we have to wait until they mature, direct to have them cash out into a RRSP daily interest savings account, then transfer them to our brokerage RRSP. It’s very slow; there’s lots of paperwork; and it’s very dull. So recently, I decided to set up a little race for my own amusement. I requested the cash in our RRSP DISA at CIBC be transferred into our Investor’s Edge account at the same time as I requested a transfer of cash from our ING Direct Tangerine RRSP DISA. Then I started the clock ticking.

Who won the RRSP Transfer Race?

Well, as you probably guessed CIBC did. Actually I was surprised at how quickly that transfer went through. It was much faster than last time. Anyway, here are the facts:

Saturday September 14, we had the CIBC branch staff complete their part of the T2033 and fax it to CIBC Wholesale Brokerage Operations.
We also had them complete and mail an original T2033 to ING Direct Tangerine and send a copy of that request to CIBC Wholesale Brokerage Operations.

On Thursday September 19, the CIBC DISA cash appeared in our RRSP brokerage account, back dated to September 18. That means the transfer took only 3 business days to complete. (It was in the account on the 4th business day.)

At that point there was still no sign of the ING Direct Tangerine money yet. But to be fair, CIBC had to mail the request to them and it probably didn’t even go into the mail until the end of the day on Monday, September 16.

Today, Wednesday, October 2, the money arrived in the brokerage account from ING Direct Tangerine. So that transfer took 12 business days. (It was in the account on the 13th business day.) That’s still a very respectable time for an inter-bank transfer!

Of course now we have to wait till 2015 to make the next transfer from CIBC. So I guess that will be the last race for a while….

UPDATE: Please be aware that as of January 2015, Tangerine has started charging a fee if you transfer your RRSP or TFSA from Tangerine to another bank, credit union, brokerage or financial institution.

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Which Brokerage is Better for GICs: InvestorLine or Investor’s Edge?

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Just because you don’t want to buy stocks does not mean you don’t want to have a discount brokerage account. If you keep a large amount of money in GICs for any reason, a self-directed account can allow you to easily “shop” for the best interest rate by just scanning a list and clicking on your choice. Which may lead you to ask, is Investor’s Edge or InvestorLine better for buying GICs?

Today the Better Brokerage for GICs is Obvious

Some days it’s almost a draw between Investor’s Edge and InvestorLine but not today.

Today, September 23, I could buy a one-year non-redeemable GIC from Home Trust through InvestorLine for 1.96%. The best Investor’s Edge is offering for the same terms and conditions is 1.75% at ICICI Bank Canada.

(Remember that you can not get your money out of a non-redeemable GIC early.)

That’s only a 0.21% difference in rate. But with rates this low every point counts.

Remember the Minimum GIC Investment Requirement at a Brokerage

One thing to remember before opening a brokerage account solely to buy GICs is that you have to have a large pool of capital to make it worthwhile. Generally you will need $25,000 to avoid paying annual service fees to the brokerage.

The minimum purchase requirement for each GIC is also $5,000.

Why Use a Brokerage for GICs?

The advantage of using a brokerage is that you can shop from a long list of various financial institutions offering GICs at varying rates. You can actually watch day by day and see competition and other factors shifting different institutions rates higher (or lower.)

The rates are significantly better than the rates offered directly at a branch of any of the Big 5 Canadian banks. And you don’t have to phone and beg or demand for an extra .25 or .5% each time a GIC comes up for renewal. You just shop the list, pick and pay. (GICs are cashed out into your cash account at maturity. They do not automatically re-invest.)

What Did I Buy Today?

Obviously, I made my purchase today at InvestorLine. Which practically guarantees tomorrow the best rate will rise to 2% or higher. But that’s ok; I have another one maturing in a week and a half.

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Do you use a brokerage for GIC investing or do you prefer to use a Fiscal Agent? Please share your strategy with a comment.