Tag Archives: RDSP

How to Buy Units in a High Interest Savings Account Fund at RBC Direct Investing

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UPDATE: This article is historical, from 2013. I no longer invest with RBC Direct Investing.

As I mentioned, if your minimum balance drops below $50,000 in market value at RBC Direct Investing, you will no longer qualify for $9.95 trades. That’s making me nervous about investing all of my money into an ETF or stocks quickly. While I’m dithering, I decided to park some of the money in a high interest savings account fund within my RBC Direct Investing RSP account.

For those who are investing in a non-registered discount brokerage account, please remember that transferring money out of a *registered* account at a brokerage to a higher-paying HISA at another financial institution is very cumbersome. It involves using a T2033 form and can often take 6-8 weeks to get the money moved in one direction. Buying units in a HISA fund is the only practical solution to this problem for registered accounts such as TFSAs, RRSPs, RRIFs, LIRAs, RESPs, RDSPs, etc.

What HISAs Can I Buy Within my RBC Direct Investing RSP?

According to information on the Canadian Capitalist website, the three Canadian dollar HISA funds available through RBC Direct Investing online are: RBF 2010, 2020 and 2030. They appear to offer the same terms.

It appears that you cannot buy units in high interest savings account funds offered by other financial institutions. A kind reader pointed out to me, though, that by speaking on the phone with BMO InvestorLine he was able to get access to other HISA funds there, as he had already bought the maximum CDIC-insured amount of AAT770, $100,000. It’s possible a similar reason might allow a customer to purchase other HISA funds by phone from RBC Direct Investing. Unfortunately, I don’t have enough funds in this RRSP to try to test this.

Buying Units of RBF2010 from RBC Direct Investing

  1. Sign in to your RBC Direct Investing account.
  2. Click on the Trade tab.
  3. From the horizontal list, click on the Mutual Funds link.
  4. On the Mutual Fund Order Entry Step 1 of 3 screen
    1. From the Account #: drop-down list, select the account within which you wish to purchase the HISA units.
      Check the Available Funds: number is what you expected.
    2. From the Action: drop-down list, select: Buy
    3. Beside the Amount: field click to select the radio button beside either
      • Dollars including Commission; or
      • Units

      Then
      in the Amount: field, type the number of dollars or units you wish to buy.

    4. In the Symbol: field, type: RBF2010
    5. Click on the Show Quote button.
      Check the details of the quote. Today for RBC Investment Savings Account Series A it says the NAVPS/Yield is 10.0000, the Currency is CAD, the Inv. Min. Initial is 500.00 and the RSP Min. Initial is 500.00.
      When I clicked on the RBF2010 link in the detailed quote, it opened a screen of information about the product. It states the fund is a No Load fund. It says to go to http://www.rbcroyalbank.com/products/isa/index.html to see the current rate.
      I did, and as of today in December 2013, the rate is set at 1.25% for the CAD funds.
      UPDATE: On March 18, 2017 RBF2010 is paying 0.75%.
      It also states that “Liquidity since your money is accessible when you want with no locked–in periods or maturity dates.”
      It all looks good, so I returned to the order entry screen.
    6. In the Contact Phone: field, type your phone number.
    7. Click on the Continue button.
  5. The Confirm Transaction – Step 2 of 3 screen opens.
    Review the details. Note it says subsequent investments can be $25 or higher. This is much, much better than InvestorLine.
    If you like what you read, click on the Confirm button.
  6. The Transaction Complete – Step 3 of 3 screen opens.
    Copy the Order ID number into a document and save it for future reference.
  7. I then clicked on the Order Status link from the horizontal list of links under the Trade tab. The order is properly recorded there.
  8. Under the My Portfolios tab, when I check the Available Funds, the amount I just spent has not been subtracted from my Available Funds. I will have to be cautious and not spend the same amount twice!

What Did I Learn From Purchasing Units in a HISA at RBC Direct Investing?

  • I found it very odd that I was not asked to enter my trading password to make this purchase.
  • I was not asked if I wanted the interest payments deposited in my HISA or paid back into my trading account cash balance. (InvestorLine asks this.)
  • I was pleasantly surprised to find that the minimum investment is $500 and the minimum additional contribution is $25. At InvestorLine and Investor’s Edge, the minimum investment is much higher.

Related Reading

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Do you park your surplus cash in a HISA in your online discount brokerage account? Does the phrase “high interest” make you laugh scornfully? Please share your views with a comment.

How to Buy Units in a High Interest Savings Account Fund in a CIBC Investor’s Edge Account

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Recently, I’ve been tidying up our investments in our CIBC Investor’s Edge RRSP account. These included some bond mutual funds that were purchased as part of a self-rebalancing mutual fund investment portfolio about 20 years ago. The actual dollar amounts invested were negligible and the returns of the funds were reasonable on a percentage basis but miniscule in a real dollar way. Instead of keeping this money in risky foreign bond mutual funds, I decided to sell them and temporarily park it in a HISA while I decide where better to invest it. Here’s how to buy units in a daily interest savings account fund, such as ATL5000, in an Investor’s Edge Account.

(This approach is intended for registered accounts where you can’t just shift the money to a conventional high interest savings account at another bank. For example, for TFSAs, RRSPs, RRIFs, LIRAs, RESPs, RDSPs, etc.)

Just How “High” Is the “High Interest” Offered in a HISA Fund?

Don’t get your hopes up.

Today, in October 2013, ATL5000 the Renaissance HISA fund, is paying 1.25% per year. Yep, that’s $12.50 if you invest $1000 for an entire year. Still that would buy me a large dim sum lunch with tax (before tip).
UPDATE: On March 18, 2017 ATL5000 is paying 0.75%.

For more info on ATL5000, you can visit Renaissance’s website.

Buying ATL5000 in an Investor’s Edge Account

  1. Sign On to your Investor’s Edge account.
  2. From the link list on the left side of the screen, click on Trading.
  3. From the link list on the left side of the screen, click on Trade Mutual Funds.

On the Mutual Fund Order Entry Screen

  1. Ensure that the Account selected is the correct one for the transaction.
  2. From the Action: section, select
    • Buy; or
    • Buy More of Holdings (if you already have some units of ATL5000 in this account)

    by clicking the radio button beside the appropriate phrase.

If You Are Buying Units of ATL5000 for the First Time

  1. In the Mutual Fund: section,
    click on the Mutual Fund Search link.
  2. In the Keyword box, type ATL5000 and click on the Search button.
  3. Review the details about the Renaissance High Interest Savings Account.
    It states that this is a Front End load fund. It is true that the issuer, Investor’s Edge, is paid a commission. It’s paid by Renaissance, though, not you, so while your interest rate will be lower because of the fee, you will not actually give up any principal to pay.
  4. Click on the Buy link.
    You will return to the Mutual Fund Order Entry Screen.

If You Are Buying More Units of ATL5000

  1. In the Mutual Fund: section,
    click on the drop-down list.
  2. You will see all of your mutual funds. Just highlight to select ATL5000.

Continuing Down the Mutual Fund Order Entry Screen in Both Instances

  1. If desired, click on the Get Quote button. Because this is a daily interest savings account, the price should always be $1 CAD per unit.
  2. In the Amount: section, type the amount you wish to put into your savings account in dollars, or in units, which is the same thing anyway!
  3. In the Dividend Section, select either
    • Reinvest in Units Of This Mutual Fund; or
    • Deposit Cash To Brokerage Account

    by clicking on the appropriate radio button.

  4. In the Pay From: section, ensure that the correct account is selected.
  5. Click on the Next button.

To have fun, I tested buying an additional $100.
The system replied “The order Amount is less than the minimum allowed value.”
In fact, it wouldn’t let me buy an additional $200, $300, $400, $500, $600, $700, $800, or $900 either. I had to buy $1000 additional units to proceed.

(NOTE: If I had only $40 to add to my HISA, I could have sold 1000 units of the HISA, and once the cash was back in my account, purchased $1040 units. It would cost me a few days of daily interest, but it could be done.)

Finalize the Purchase

  1. Review the purchase details. If they look OK, in the Trading Password field, type your password.
  2. Click on the Submit Order button.
  3. Copy and paste your confirmation including the Order Tracking Number into a document and save it until the transaction is properly reported for your account.
  4. If you are finished with your Investor’s Edge account, click on the Sign Off button.
    For increased security, clear your browser history and cache and close your browser session.

Related Reading

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Do you park your cash in a high interest account while you decide where to re-invest? Does the phrase “high interest” make you laugh? Please share your experiences with a comment.