Sometimes you don’t see anything you want to invest in for the US dollar side of your portfolio. Meanwhile, dividends and distributions keep rolling in and you start accumulating a stash of US cash. That’s been happening this year for me in my RRSP so I thought I’d better look at getting the best possible return for my US dollars while waiting to make an investment decision. Here’s how I parked my US dollar cash in a high interest savings account mutual fund at BMO InvestorLine.
What Fixed Income Investments Could I Park My US Dollars In at BMO InvestorLine?
There are two basic fixed investments commonly used for parking cash for the short term in a BMO InvestorLine account: cashable GICs and high interest ( ! their name not mine!) savings accounts.
High Interest Savings Accounts at BMO InvestorLine
BMO InvestorLine only offers two pseudo-high interest savings accounts, one in US dollars and one in Canadian dollars. They are actually run like mutual funds but with no fee to buy or sell units and no required minimum holding time.
The US dollar fund is called AAT780. You have to buy at least $1000 USD units of the fund initially. For subsequent purchases, you can invest in $50 USD increments.
Cashable GICs at BMO InvestorLine
At the time I wrote this, September 26 2017, InvestorLine was not offering any cashable GICs in USD online. I suspect if you had a very large amount of cash and phoned in, though, you could probably arrange something. Given the current low rates for cashable GICs, though, it may be just as beneficial to put the money in a HISA.
Be Aware: US Dollar Savings are NOT Insured by CDIC!
Just as a public service, I’d like to remind readers that CDIC does not insure deposits held in foreign currencies, which includes US dollars. If something goes terribly, terribly wrong with the financial institution holding your US dollar assets, you may lose the money. Check before investing whether any other kind of assurance or insurance is provided for your savings.
What Are AAT770 and AAT780 Paying for CAD and USD Deposits at BMO InvestorLine?
Today, October 3 2017,
- AAT780 the USD high interest savings account is paying an annual rate of 0.50%.
- AAT770 the CAD high interest savings account is paying an annual rate of 0.95%.
That’s the influence of the recent increases in the federal prime rate.
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