Tag Archives: Investor’s Edge

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.

When Will I Get My Dividends in my InvestorLine and Investor’s Edge Brokerage Accounts?

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Before I opened a self-directed brokerage account at BMO InvestorLine I owned some shares that I kept in a safe deposit box at the bank. Every quarter, about a week before it was payable, a dividend cheque would arrive from the company’s agent. On the payable date, I would deposit the cheque in my account and could spend my capitalistic largesse immediately. So I was very curious when I first bought stock in my InvestorLine and Investor’s Edge accounts to see when the dividends would appear.

BMO InvestorLine Is Not Too Swift

I was a bit disappointed to discover, and verify over many payments, that BMO InvestorLine takes one full day after receiving a dividend on my behalf to post it to my brokerage account.

For example, Cineplex, which pays a monthly dividend which is great for income seekers, paid its June dividend on July 31 this month. If I had received a paper cheque in the mail, I could have cashed it and spent the money going to a movie that night. With InvestorLine, however, the money doesn’t appear in my account ready to spend till the morning of August 1.

Frankly given this is all done electronically, I’m a bit surprised by the delay. Since the paper cheques are mailed and delivered to my home several days before the payable date, one would think the electronic file would be available ahead of time too.

Now let’s look at Investor’s Edge.

CIBC Investor’s *Edge* Isn’t a Faster Dividend Payment

CIBC may be trying to give investor’s an edge but if they are it’s not by paying them their dividends on the day they are earned. Just like BMO, CIBC is taking one full day after receiving a dividend on my behalf to show it in the transaction history and cash balance of my brokerage account.

Is There a Benefit to Brokerages In This Delay?

Having a nasty suspicious mind, I wonder whether there is any benefit to the brokerages in this delay. Where is the money during the missing one day? Still in the issuing company’s bank account? Or sitting in an undisbursed slush pile in my brokerage? I think I should send a secure email by MyLink to BMO InvestorLine and ask them.

Checking Your Transaction History for Your Dividends

I’ve mentioned before that BMO InvestorLine back dates dividend payments to when they should have been made in the Transaction History.

CIBC Investor’s Edge does the same thing in its Transaction History.

Why Does It Matter If the Dividend Shows Up a Day Late?

For ultra conservative slow poke investors like me, it doesn’t particularly matter if the dividend payment is made a day late. But I can see how it might matter to others:

  • if there is a great buy available on the day the dividend money should have been available, it must hurt to watch it slide out of reach while waiting one more day: even GIC rates flutter day by day
  • if someone is using the dividend income to pay bills, even a day’s delay might cause problems depending on how the dates line up between bills and dividend payments

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When does your brokerage pay your dividends? Remember you can’t always tell by the Transaction History. You may have to actually check your cash balance on the day the money should have appeared. Please share your experiences with a comment.