Tag Archives: TFSA

How to Buy a GIC in a BMO InvestorLine Account

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UPDATE: In late 2015, BMO InvestorLine changed its GIC purchase procedures. Please see the newest article: How to Buy a GIC at BMO InvestorLine with the New (2015) Fixed Income Investment Screens

If you keep a base of GICs in your RRSP portfolio like I do, you may decide to buy and manage them through your online brokerage account. Doing so makes renewals simpler and helps ensure you get a competitive rate without phoning your bank time and again to complain. There is no fee or commission to purchase GICs through a BMO InvestorLine account. The rates, perhaps surprisingly, are the same as those offered directly from the same financial institutions. For a list of which institutions InvestorLine lets you buy from, please check the article Comparing GIC Rates for BMO InvestorLine, CIBC Investor’s Edge. When you’re ready to spend your money, here’s how to buy a GIC from InvestorLine.

How to Purchase a GIC in your BMO InvestorLine Account

Sign in to BMO InvestorLine

  1. Go to https://www.bmoinvestorline.com/
  2. To sign in, type your User ID or Account Number, and Password and click on the Go button.
  3. If you have more than one trading account, from the drop-down list select the account within which you want to buy the GIC. For example, I selected my RRSP account.

Review the List of Available GICs and the Terms of Sale

  1. From the Trading Tab, select Fixed Income.
  2. From the Inventory Search column, select GICs.
  3. Unless you have some specific search criteria you wish to use, on the Inventory Search – GICs screen, click on the Search button. This will generate a list of all available GICs. For details on what types are offered look near the end of this article.
  4. If you don’t remember the details, read through the conditions which apply to GIC purchases. For example, the trading hours are 9:30 a.m. to 3:45 p.m. except on early closing days. GIC purchases close the next business day. (T+1)
  5. The list is sorted by Type and Cashable, then by Term, then by Interest Rate.
  6. When you spot the GIC you want to purchase, click on the corresponding name of the financial institution offering the GIC in the column on the left.
    For example, I selected a 1 year annual interest GIC from Home Trust Co at 1.85%.
  7. If you are not sure who the financial institution is, it’s worth taking a minute to visit their website and look at the company details. Also, you can always check whether they are covered by CDIC insurance by checking the list on the CDIC website, www.cdic.ca/.

To Order a Listed GIC

  1. On the GIC Order Entry screen,
    In the Amount box, type the amount of the face value of the GIC you wish to purchase. The minimum is usually $5000. You can choose odd amounts like $5023 if you wish, for instance if you are re-investing interest, income or dividends.
  2. In the Contact Phone Number, type the number you can be reached at to discuss this purchase.
  3. Click on the Review Order button.
  4. The GIC Order Review screen will open.
  5. Please note: Once submitted GIC orders can NOT be cancelled! If you choose a non-cashable GIC (which is most of those offered) your money will be locked in for the term of the certificate. Most GICs are not cashable!
  6. Review the amount, term, interest rate, interest payment terms, and issuing company.
    If everything looks fine, in the Please Enter Your Password to Submit This Order field, type your password.
  7. Click on the Submit Order button.

Be aware that the money will not be removed from the display of your Cash account until the second next business day! Be careful not to spend the same money twice, accidentally.

What Happens After You Purchase a GIC from BMO InvestorLine

You will receive confirmation that the order is filled in your Transaction History in 2-3 business days.

Usually, you will also receive a paper statement in the mail confirming the purchase and its terms.

When any interest is payable, it will appear in the Cash section of your trading account. It usually appears one business day after it was payable, but is back dated to the date it was paid. For example, if the certificate matures on April 10, 2013 (a business day), the cash will be in your account on April 11, but the posted date in the transaction history will say April 10. NOTE: BMO states that interest payments can take 1-5 business days to be received.

When the certificate matures, the original principal will be returned to your Cash balance in your trading account. Certificates do NOT rollover or re-invest. You will receive a message on your MyLink secure email about a week before a certificate matures to remind you to reinvest the money.

As with interest payments, the capital usually arrives in your cash account on the business day after the certificate matures. In the transaction history, this payment will be back dated to the date the certificate matured.

Typical Types of GICs Offered for Purchase by BMO InvestorLine

  • GICs cashable after 30 days with a term of 1 year (all other GICS are NOT cashable!)
  • 1 year GICs that pay interest when they mature
  • 1 year GICs that pay interest twice per year (note they offer lower interest rates than those that pay interest only once per year)
  • 1 year GICs that pay interest monthly (note these often have interest rates comparable to the semiannual GICs)
  • 2, 3, 4, or 5 year GICs that pay interest at the end of each year
  • 2, 3, 4, or 5 year GICs that pay interest at maturity, and the interest compounds after each internal annual payment of interest
  • 2, 3, 4, or 5 year GICs that pay interest twice per year (note they offer lower interest rates than those that pay interest only once per year)
  • 2, 3, 4, or 5 year GICs that pay interest monthly (note these often have interest rates comparable to the semiannual GICs)

NOTE: No GICs are listed with terms longer than 5 years. This is good as CDIC only insures GICs with terms of 5 years or shorter.

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Have you purchased GICs through an online brokerage? Were you satisfied with the process? Please share your experiences with a comment.

Find out your TFSA Contribution Room Using the CRA Telephone Information Phone System, TIPS

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You can not double-check when you contributed to your TFSA using the Canada Revenue Agency’s Telephone Information System, TIPS. What you can check is how much contribution room was left at the start of the current year.

How Up to Date is the TFSA Contribution Room Information from the CRA?

Unfortunately, financial institutions are only required to report your TFSA contributions to the tax department at the end of December each year. That means the info the government has can get out of date quickly. If you make a contribution on or after January 1, they won’t necessarily know about it so they don’t report it whether they know or not.

The TIPs option to review your Individual Tax Free Savings Account can only tell you the amount of unused TFSA room you had on January 1 of the current year.

So if you’ve made several small contributions this year, the TIPs system will not be of much use to you.

Information You Need to Check your TFSA Contributions Using TIPs

You will probably need the following info to use TIPS

  • your Social Insurance Number (SIN)
  • your full date of birth
  • the amount you reported on line 150 (Total Income) of your last tax return that has been filed and processed by the CRA. The number you need is what you reported, not what the CRA reported on your Notice of Assessment. Sometimes the CRA came up with a different value than you did.

When Is TIPS for TFSAs Available?

For TFSA information, TIPs is available from mid-February to the end of December. (In January and the first half of February, this option is unavailable as the previous year’s contribution information from the banks and other institutions is being input.)

In months when TIPs is available for TFSAs, the service is available 24 hours per day, 7 days a week.

To Check your TFSA Contributions and Contribution Room Using CRA’s Telephone Information Phone System

  1. Call 1-800-267-6999. (for free)
  2. Select the option for Tax Free Savings Accounts.
  3. Select the option for your Individual Tax Free Savings Account.
    Do not select the General Information option. The General Info option just tells you about how TFSAs work, what the penalties are for mis-use etc.
    The Individual Tax Free Savings Account service lets you know the amount of unused TFSA contributions as of January 1st of the current year.
  4. When prompted, enter and confirm your Social Insurance Number, SIN.
  5. When prompted, enter and confirm your month and year of birth.
  6. When prompted, enter and confirm the amount from line 150, Total income, from your previous year’s completed and accepted tax return. Do not just use the amount from your Notice of Assessment, use the value from your actual return.

The telephone system will respond with your TFSA contribution room as of January 1 of the current year.

If you have any concerns, like some Questrade customers did, it might be worth checking your TFSA contribution room for mistakes.

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Did you ever check your TFSA contribution room online? Was it useful or was it hopelessly out of date? Please share your experiences with a comment.