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How to Invest in the AAT770 High Daily Interest Savings Account Fund, HISA, at BMO InvestorLine

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Recently BMO InvestorLine updated its HISA offerings with a daily interest savings account fund of its own called AAT770. (It also offers AAT780 for US dollar transactions.) This is a no-load purchase. It’s also CDIC insured.As of October 3, 2017, it is paying 0.95% and the minimum holding of this investment is $1 000. As of February 20, 2014  April 12, 2013 it is paying 1.25%  1.27% per year.  UPDATE: On March 18, 2017 AAT770 is paying 0.75%. The minimum holding of this investment is $5000, considerably less than the minimum $25,000 holding for other HISAs. Of course, BMO could have just started paying interest on cash balances over $5000 as it used to do in the past and saved investors a hassle. Presumably they expect many investors to overlook this possibility and save themselves some money. Luckily, an observant investor noticed it and advised me which led to me writing the post Investing in the AAT770 Daily Interest Savings Account for InvestorLine RRSP and TFSA Accounts.

UPDATE: As of November 2013, AAT770 is only paying 1.25% per year. Grrrr.
UPDATE: As of January 2015, AAT770 is only paying 1.20% per year.
UPDATE: On March 18, 2017, AAT770 is paying 0.75%.
UPDATE: On October 3, 2017, AAT770 is paying 0.95% per year.
Here’s how to invest in AAT770:

Sign in to your BMO InvestorLine account.

  1. From the drop-down menu, select within which account you wish to purchase the high interest savings account fund.
    For example, I selected my LIRA.

How to Buy Units of AAT770 the BMO High Interest Savings Account Fund

  1. From the Trading tab, select Fixed Income.
    1. Under the Inventory Search section, click on the High Interest Savings link.
    2. Click on the BMO CAD High Interest Savings Account link.

    OR

    1. From the Inventory Search menu, select GICs.
    2. Click on the Search button.
    3. Click on the link: Looking for an alternative for the cash in your portfolio?
    4. Review the list (especially in case InvestorLine comes up with a better offer!).
    5. As of April 11, 2013, the best The only Canadian dollar choice is the AAT770 BMO CASD High Interest Savings Account, so click on that named link.

The Mutual Fund Order Entry screen opens.

  1. Check that the Action is Buy. If not, select it from the drop-down list.
  2. Confirm that the Fund Symbol is AAT770.
  3. If desired, click on the Recent Closing Price button.
    This should show a value of 1.00 and state that the fund is No Load.
  4. In the field Amount in Dollars, type in the amount you want to invest in Canadian dollars.
    For this test, I typed 5523.
    (I actually tested it first entering 550 as the Amount in Dollars.
    It came back with the error message:
    Your order was not processed. There is a problem with your order:
    Quantity entered does not meet minimum purchase levels.)
  5. Select where the interest should be paid: to
    • your cash account, or
    • reinvested in more units of the fund,

    by clicking on the radio button beside Cash or Reinvest.

  6. Type your telephone number in the Contact Phone # field.
  7. Click on the Review Order button.

The Mutual Fund Order Review screen opens.

  1. Read through the Mutual Fund Order Review screen to be sure you know what you are buying and the terms.
  2. If everything looks ok, type your password in the field labeled:
    Please enter your password in order to submit your order.
  3. Click on the Submit Order button.
  4. Highlight the information about your order on the Mutual Fund Order Confirmation and paste it into a document.
  5. Save it for reference until the order is successfully filled.

If you want, click on the Trading menu and select Order Status.
You should see a description of your recent transaction.

Be Aware It Will Take Time for the Transaction to be Reported Properly
Today, the first business day after I placed my order:

  • my cash balance is too high.
    It states I still have the cash that I spent yesterday buying the HISA fund.
    Be careful you don’t spend the same cash twice!
  • my Holdings does not include the HISA fund yet
  • if I check my Order Status, however, by clicking on the Trading tab and selecting Order Status, it shows my purchase order as Filled.

I expect to check tomorrow and find that both my Holdings and my Cash balance have been updated.

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Do you occasionally need to park cash in a HISA fund in your brokerage account? Has it ever caused an unexpected problem or delay? Please share your experiences with a comment.

Investing in the AAT770 Daily High Interest Savings Account Fund, HISA, for BMO InvestorLine RRSP, TFSA and Other Accounts

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Sometimes you have cash sitting around in your investment account. You may be waiting for a market pullback. You may be waiting for fixed income rates to improve before locking in for a longer term. You may need to make a withdrawal from your RRIF or your TFSA soon and need to keep the money handy in cash. Till recently, that meant getting no interest at BMO InvestorLine, or getting a very low interest rate if you could risk locking the money in for 30 days in a cashable GIC with a minimum $10,000 investment. Or, if you had $25,000 or more, you could have purchased units of a high interest savings account fund such as ATL5000. Now, in April 2013, BMO InvestorLine is offering a new choice in daily high interest savings accounts with a somewhat better minimum.

A Vote of Thanks to a Reader for Highlighting this New Option

I’d just like to publicly thank John who pointed out this new option is available. It is much appreciated both by me and I’m sure by other readers!

Investing in BMO AAT High Interest Savings Account Funds

The new offering is two funds:

  • AAT770 the BMO AAT CAD High Interest Savings Account
  • AAT780 the BMO AAT USD High Interest Savings Account

Each fund has a value of 1.00 dollars per unit. AAT770 is Canadian dollars. AAT780 is US dollars.

What is the “High” Interest Offered on These Funds?

“High” in these days of record low interest rates is a bit of a stretch.

UPDATE: On October 3, 2017, AAT770 is paying 0.95% and AAT780 is paying 0.5%.
UPDATE: On March 18, 2017 AAT770 is paying 0.75% and AAT780 is paying 0.5%.
UPDATE: On January 29, 2014 AAT770 is paying 1.25% and AAT780 is paying 0.25%.
UPDATE: On November 2013, AAT770 is paying 1.25% and AAT780 is paying 0.20%.

The rates offered as of April 11, 2013 are: AAT770, 1.27% on Canadian dollar investments;AAT780, 0.25% on US dollar investments.

What is the Minimum Investment Required to Buy Units in AAT770 or AAT780?

For both funds, the minimum initial purchase is $5,000. Subsequent purchases can be $500 or more. UPDATE: 2017 10 03, minimum purchase is $1 000 and subsequent purchases can be $50 or more.

While I haven’t tested it yet, I expect to find that you must keep a minimum balance of $5,000 (UPDATE now $1000) per fund. With the old $25,000 minimum funds like ATL5000, if you tried to sell a few units and drop below a holding of $25,000 it would refuse the transaction, telling you to either sell all or none.

I will test this minimum in the future, but first I have to buy some!
[UPDATE: As of April 2013 when I tried a partial sell that would take my balance below $5000 the system would not let me enter the order. It said I had to keep a balance of $5000 or sell all.]

I have tested whether the system will let you purchase less than $5000. It won’t.

NOTE: Although a $5,000 minimum is much better than the previous $25,000 minimum required by InvestorLine, it’s still quite high. You can invest in ATL5000 with a $1000 minimum at CIBC. UPDATE: As of 2017 10 03 you can also invest in AAT770 with a minimum of $1 000.

Is There an Early Redemption Fee for AAT770 or AAT780?

As with ATL5000 there should not be an early redemption fee. I will also be testing this in future.
[Update: As of April, 2013 I redeemed all units in my RRSP account. There was no fee deducted from my account either for the buy or the sell. I redeemed fewer than 7 days after purchasing.]

However, with any daily interest product the interest is calculated daily but paid monthly. So if you redeem all of your units before the interest is paid for that month, you will forfeit that interest. This is similar to withdrawing all of your money and closing a daily interest bank account. (I hope to test the options Cash and Reinvest, however. Perhaps you can still get your interest paid out to your cash account even if you sell all of your units before month end. I will report on that if and when I get a test done.)

[Update: To my amazement, when I did a test redemption in April 2013, they actually paid out the interest accrued during the very short time (less than 1 month) that the money was invested. Apparently I’ve been wrong about this and I apologize to BMO InvestorLine for my misguided thinking.]

Is There a Commission or Fee to Buy AAT770 or AAT780?

There does not appear to be any fee or commission to purchase these units. The fund is described as “No Load” on the purchase order screen. I will be testing this, too.
[Update: I did a purchase and sale within a few days of each other and was not charged any fees in April 2013.]

What Next?
I’m off to test the product with a buy and, after it settles, a sell. I also want to make a buy and hold it to see how the interest gets paid.

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PLEASE share your experiences with high interest savings accounts at InvestorLine or other online brokerages. One reader already brought this new option to light through a comment. Your thoughts may be equally useful to other investors.