Tag Archives: GICs

How to Buy a GIC at BMO InvestorLine with the New (2015) Fixed Income Investment Screens

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When one of the GICs in my children’s RESP matured recently, I decided to re-invest the money in a new 1-year-term GIC. Since the last time I bought a GIC, BMO InvestorLine has re-designed their fixed income investment screens so the procedure has changed: here’s how I bought the guaranteed investment certificate.

Buying a Guaranteed Investment Certificate at BMO InvestorLine

  1. Sign in to your InvestorLine account.
  2. From the drop-down list at the right side of the screen, make sure you are looking at the information for the account within which you want to buy the GIC. For example, I made sure it was our RESP account, not my RRSP account.
  3. Hover the cursor on the Trading tab and from the list, click on Fixed Income.
  4. Click on the blue View GIC Offerings button.

GIC Offerings Page

The GIC Offerings screen has become much more complicated. Down the left side of the screen are the choices:

  • Quick Picks
  • Cashable
  • 1 year
  • 2 years
  • 3 years
  • 4 years
  • 5 years

And across the top of the data are tabs for:

  • Annual Pay
  • Compound
  • Semi-annual Pay
  • Monthly Pay

I wanted to buy a 1-year annual pay GIC, so from the list on the left side of the screen, I clicked on the 1 year box, then clicked on the Annual Pay tab.

Although I had not requested to see Cashable GICs, I notice three BMO cashable GIC products lead the list. All the other listed GICs are N/A for Cashable. In other words, they cannot be cashed before maturity.

Fortunately, BMO InvestorLine still lists the GICs in order from highest paying to lowest (if I ignore the BMO cashable products.)

Click on the name of the company offering the rate you want. For example, I clicked on Home Trust Co.

GIC Order Entry Page

The familiar GIC Order Entry screen opens.

  1. In the Amount box, type how much you want to invest in this GIC with a minimum purchase of $5000 in a RESP.
  2. Ensure the interest rate and payment terms you want are the ones beside the selected radio button.
  3. In the Daytime Phone Number box, type where you can be reached.
  4. Click on the button: Review Order
  5. Read the disclosure statement that warns you that BMO InvestorLine gets a commission from the sale. (You do not pay this separately. It is built into the lower interest rate you are getting for the GIC. So you will get the interest rate advertised and they will get some $$$ from the vendor.)
  6. Click on the Continue button if that’s ok.

The GIC Order Review Page

  1. Review the details of your request.
  2. If it all looks good,
    Type your trading password in the field: Please enter your trading password to submit this order:
  3. Click on the button: Submit Order

GIC Order Confirmation Page

Make a note in a secure location of the Order Reference Number in case of any problems.

As usual, your Cash Balance does NOT immediately reflect your purchase.

You’re done!

Does the New BMO InvestorLine Fixed Income Process Work Better for GICs Than the Old One?

Personally, I didn’t find it any easier. In fact, it took a few more clicks to get started with the purchase. It does look prettier, though. I’m glad they still show the GIC interest rates in the useful format of highest to lowest with no required clicks.

Overall, I’d rate the change as neutral, neither better nor worse, for GICs.

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Do you buy GICs in your RESP to keep the cash safe during the last few years before the educational institute gets it all? Please share your strategy with a comment.

What Will Happen When My Oaken Financial GIC Matures?

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A year ago, we decided to divide our emergency fund into 12 parts, and invest the money in a series of GICs that would mature one per month for a year. We knew we wouldn’t need the emergency money all at once but rather in monthly amounts to replace a pay cheque. We looked for GICs offering a good interest rate with CDIC insurance and easy online purchase access. We chose to buy our GICs from Oaken Financial and now the first GIC is maturing and I wondered what will happen.

Setting the Instructions for a GIC with Oaken Financial

When I purchased a GIC from Oaken, both online and by phone, I was asked what I wanted to happen to the principal and the interest when the term ended. I decided to have both the principal and interest deposited to our Oaken Savings account. This instruction was listed on the confirmation certificate I received in the mail for my GIC.

Why Did I Get a Letter from Oaken Asking Me to Send Them Instructions for My Maturing GIC Investment?

I was a bit surprised to receive a letter in the mail from Oaken a few weeks before my first GIC matured. It correctly described the instructions on file to pay out my GIC at maturity, both principal and interest, to my savings account. But it also said “Please indicate your instructions for your maturing investment.” And in the fine print under PLEASE NOTE it said “If no maturity instructions have been received…the mature investment may be…renewed for the same terms and conditions as the existing investment…”

Red alert! I hate having GICs rollover. I like to re-invest the funds myself if and when I choose.

Were my instructions properly on file? Or did I need to check a few boxes on this form and return it in the provided pre-paid return envelope? I phoned Oaken Financial to check.

The Renewal Letter is a Courtesy to Customers

I was reassured to find out that the renewal instructions letter is primarily a courtesy to customers. It reminds them that they have a GIC maturing (which could be forgotten after 5 years!) and offers them the variety of choices at maturity such as reinvesting at various terms in both cashable and non-redeemable GICs, or re-investing only part of the funds, or sending a partial or total payment by mail.

Because I already have the instructions I want on my file, I do NOT need to send in the letter.

So it’s all good.

I will watch my Oaken Savings account, however, later in the month to see if the principal and interest are paid out as instructed. If so, I will probably just re-invest the principal for another year: but I will enjoy the security of choosing at that time.
UPDATE: The results are in; the first GIC has matured.

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Does your bank or trust company warn you in writing (no annoying phone calls!) that a GIC is maturing? Is it easy to get your instructions on file? Please share your experience with a comment.