Tag Archives: shares

How Much Money Will I Get at Various Rates for GICs and Dividends

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For many people, high school is a long time ago and math was never their favourite subject. Here’s a quick refresher to show how much money you will earn on money in a bank account, in a GIC or from dividends if you know the annual rate.

Rates Bank Advertise for Bank Accounts and GICs

If you go to a bank website, like at Tangerine.ca, you can see a list of the rates they pay for GICs and bank accounts. It is listed as a percentage, like 1.4%. The rate is how much money they pay for a year. Even though it may be a daily interest account, you won’t earn the advertised percentage unless you money stays in the investment for 365 days. This article will tell you how much money you would earn at that advertised rate on your savings.

Yields (Rates) for Shares or Stock in a Company

If you buy a share of a company in the stock market, it may pay a dividend. That’s a cash payment that may be paid once a month, once every three months, or once a  year. No matter which way they pay, they usually quote how much the dividend is per year as a percentage.

For example if you buy shares in Bell right now the dividend is about 5%. This article will also tell you how much money you would earn with a dividend of 5% based on the number of dollars of shares that you bought. For example, if you bought $2500 worth of shares, you would look below to see how much money the dividend is in the “you will get paid” column for $2500 at the percentage rate quoted for your dividend.

The maximum you can put into your TFSA for 2014 and beyond is $5500 a year, which is why I’ve included that amount in the tables below.

How Much You Will Earn per Year at 5% Annually on Your Bank Account, GIC or Dividend Stock

If the rate is 5% per year and

you invest you will get paid
$100 $5
$500 $25
$1000 $50
$2500 $125
$5000 $250
$5500 $275

If it’s a daily interest bank account you will actually get slightly more because you will get paid interest on the interest as well.

How Much You Will Earn per Year at 4% Annually on Your Bank Account, GIC or Dividend Stock

If the rate is 4% per year and

you invest you will get paid
$100 $4
$500 $20
$1000 $40
$2500 $100
$5000 $200
$5500 $220

If it’s a daily interest bank account you will actually get slightly more because you will get paid interest on the interest as well.

How Much You Will Earn per Year at 3% Annually on Your Bank Account, GIC or Dividend Stock

If the rate is 3% per year and

you invest you will get paid
$100 $3
$500 $15
$1000 $30
$2500 $75
$5000 $150
$5500 $165

If it’s a daily interest bank account you will actually get slightly more because you will get paid interest on the interest as well.

How Much You Will Earn per Year at 2% Annually on Your Bank Account, GIC or Dividend Stock

If the rate is 2% per year and

you invest you will get paid
$100 $2
$500 $10
$1000 $20
$2500 $50
$5000 $100
$5500 $110

If it’s a daily interest bank account you will actually get slightly more because you will get paid interest on the interest as well.

How Much You Will Earn per Year at 1% Annually on Your Bank Account, GIC or Dividend Stock

If the rate is 1% per year and

you invest you will get paid
$100 $1
$500 $5
$1000 $10
$2500 $25
$5000 $50
$5500 $55

If it’s a daily interest bank account you will actually get slightly more because you will get paid interest on the interest as well.

How Much You Will Earn per Year at 0.25% Annually on Your Bank Account, GIC or Dividend

Some bank accounts have really low interest rates. I know some actually pay only 0.25% a year.

If the rate is 0.25% per year and

you invest you will get paid
$100 $0.25
$500 $1.25
$1000 $2.50
$2500 $6.25
$5000 $12.50
$5500 $13.75

If it’s a daily interest bank account you will actually get slightly more because you will get paid interest on the interest as well.

How to Calculate How Much Money You Will Earn in One Year for any Rate and any Investment

You can calculate how much money you will earn in one year using a calculator and the following math:

  1. Type in the interest rate or the dividend yield. For example, for a rate of 3.25% type in: 3.25
  2. Press the divide ÷ or / key.
  3. Type in 100.
  4. Press the Enter or = key.
  5. Press the times * or x key.
  6. Type in the amount you have invested. For example, type in: 5500
  7. Press the Enter or = key.

For this example you would type:
3.25 / 100 = x 5500 =
and get
178.75
which means $178.75 is the amount you get for investing $5500 at 3.25% for one year.

You can see why it’s a good idea to save a lot for retirement!

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Have you ever thought you were getting $80 a year and then found out it was $8? With interest rates so low, it can be a real shock!

Setting Up a DRIP for a Stock or ETF at BMO InvestorLine

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Today I decided to start a Dividend Reinvestment Program (DRIP) for a stock I hold in a registered investment account at BMO InvestorLine. Here’s what I had to do.

How to Set Up a Dividend Reinvestment Program (DRIP) at InvestorLine

Have your Account Number and Login Password handy.
I usually login using a Userid that groups all of my accounts at InvestorLine, so I actually had to go looking for this information!

  1. Call 1 888 776 6886.
  2. Select your preferred language from English, French or Chinese.
  3. At the prompt, enter your Account Number followed by the # symbol.
  4. At the prompt, enter your Login Password followed by the # symbol.
  5. Listen to the voice mail menu as it changes from time to time. For my call, I had to press 0 and 3.
  6. Wait on hold. I waited for 5 minutes, which they had warned me was the expected wait time.
    • I was calling mid-morning on a Thursday.
    • The hold music wasn’t as strange as ING Direct’s version of “Money for Nothing.”
    • Instead of selling products to me, the voice-overs offered tips for using InvestorLine to research stocks.
  7. Once the call was answered the assistance was super speedy. In less than one minute, the person
    • Confirmed my account number.
    • Confirmed the number of shares of the stock I hold that I want to enroll in the DRIP.
    • Warned that it usually takes 2 weeks for a DRIP to be created. Any dividends received during that two week period would be paid in cash not DRIPped.
    • Confirmed that the usual dividend payment for my holding was “Y” and that the cost per share is “Z” and therefore that I would receive several shares with each dividend payment and the balance would be paid in cash.
      If the dividend paid by a stock is less than the amount required to buy 1 share, then the entire amount will be paid as cash even if the stock is enrolled in a DRIP.
    • This was a good reminder that InvestorLine offers a synthetic DRIP. You cannot buy fractional shares. All shares must be purchased as whole shares.
  8. Gave me a Reference Number for the request.
  9. Wished me well.

Rating the DRIP Enrollment Process for a Stock Held by BMO InvestorLine

Overall, I would give this system 4.5 out of 5. The customer service was excellent. The wait time could be improved.
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Do you DRIP any stocks or ETFs using BMO InvestorLine? Are you satisfied with their service? Please share your experiences with a comment.