Tag Archives: Investor’s Edge

How Can BMO InvestorLine and CIBC Investor’s Edge Offer GIC Purchases and Sales with No Commission Fees?

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In 2012, I was surprised to see the annual interest rates for GICs offered for sale on InvestorLine and Investor’s Edge were the same or higher than the posted rates for GICs purchased directly from the respective financial institutions. Since BMO and CIBC didn’t directly or noticeably charge a fee or commission for the purchase of GICs, in 2012, how could they make any money by offering this service?

UPDATE: As of January 2019 (and probably before then) I can NOT buy a GIC inside my brokerage accounts with the same rate as one bought directly from the financial institution. Big BAD change!

Written: 2012
Reviewed: 2023
Revised: 2023

A Hidden Fee When Buying a GIC

Whether you buy a GIC from a bank or trust company directly or whether you buy it through a broker like InvestorLine, you are paying a hidden cost.

You are agreeing to an interest rate that is less than the value of your money to the financial institution. Part of the profit they are making selling you the GIC at that rate is used to pay a commission to the seller. The commission might be paid to a local branch office, to a broker, or to InvestorLine or Investor’s Edge. So although it looks like you are not paying a commission or fee to purchase a GIC through a self-directed online account, you still are.

Under new rules, in 2023 if you start to buy a GIC at BMO InvestorLine, you will be shown a message telling you that a ‘hidden’ fee or commission is being paid to InvestorLine which is included in the interest rate you are receiving.

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Comparing GIC Rates for BMO InvestorLine and CIBC Investor’s Edge

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With a self-directed investing account, you can easily buy GICs online. Here’s a spot check of the available rates for 1 year non-redeemable RRSP GICs offered on BMO InvestorLine and CIBC Investor’s Edge at the same time.

The minimum purchase amount for this type of GIC for both InvestorLine and Investor’s Edge inside a Registered account (e.g. RRSP) is $5000. After that, though, the amount goes up by $1 increments, so you can buy a $5001 or a $5123 GIC if you want.

Written: 2012
Reviewed: 2023
Revised: 2014; 2023

Institution BMO InvestorLine Rate CIBC Investor’s Edge Rate
Rates in 2012
Home Trust Co 1.85 % n/a
Montreal Trust Canada 1.35 % 1.35 %
National Trust n/a 1.35 %
Pacific Western Bank n/a 1.6 %
People’s Trust 1.45 % 1.45 %
Rates on Feb 2 2014
Home Trust Co 1.65 % n.a.
Montreal Trust Canada 1.43 % 1.43 %
National Trust n.a. 1.43 %
Pacific Western Bank n.a. 1.47 %
People’s Trust 1.45 % 1.45 %
Rates on Jan 27 2023
Home Equity 4.9 % 4.9 %
Montreal Trust 4.85 % 4.85 %
National Bank 4.85 % 4.85 %
Canadian Western Bank 4.91 % 4.91 %
People’s Trust 4.6 % 4.6 %

As you can see, the two banks offer GICs from different financial institutions. Rates change daily and sometimes even within a day. Banks also add and remove financial institutions from time to time.

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Do you use a discount brokerage? From which companies does it offer GICs? Have you noticed any excellent rates on offer? Please share your experiences with a comment.