# 500K Help



## JackJac (Mar 13, 2017)

Hi everyone,

I'm new to the forum. I have a good problem: I have no idea what to do with my 550K bank draft. It's just sitting on my desk. I have very little financial knowledge and I don't know where to begin. A bit about me: I am 30 years old. Temporarily off work (minimum wage job), living with parents, no debt or any significant expenses. 

I want this 550K to be protected, so nothing high risk. So far I've considered Robo Advisors, parking it in a credit union with insurance on any amount of savings (Accelerate Financial), or splitting it between the big 5 banks - 100K each to get the CDIC coverage. Any more ideas? Additional wisdom and advice would be greatly appreciated as well.

Thanks!


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## My Own Advisor (Sep 24, 2012)

I have no idea what the money is for, so given you have very little (admittedly) financial knowledge - that's a huge chunk of money to protect while you figure things out.

While you do some research with a Robo - I think splitting it between the big 5 banks - 100K each to get the CDIC coverage is a good call. Mind you, none of the big 5 banks are going anywhere anytime soon but you never know.

Robo CEOs I've interviewed:
http://www.myownadvisor.ca/hassle-free-investing-modernadvisor/

http://www.myownadvisor.ca/wealthsimple-new-investing-service-launches-think-robo-advisor-north/

Take a year to figure things out (maybe beyond Robos) including reading lots on this forum; some very bright folks here. 

There is a sticky for best books for beginners etc. on this forum. Check that out for sure. Here is another post with some free ebooks including _If You Can_ - a gem:
http://www.myownadvisor.ca/saving-investing-resources-newbies/

Take your time and good luck to you. You have an excellent problem to have.


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## none (Jan 15, 2013)

Splitting between banks isn't really necessary
http://www.theglobeandmail.com/glob...ve-if-your-broker-goes-broke/article19783968/


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## Spudd (Oct 11, 2011)

none said:


> Splitting between banks isn't really necessary
> http://www.theglobeandmail.com/glob...ve-if-your-broker-goes-broke/article19783968/


This article is talking about brokerages, not banks. For banks it is good to split it up, just in case.


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## none (Jan 15, 2013)

"just in case' That's a bit silly. Dump it into a brokerage instead - you can buy something that'll give you some interest but going to 5 different banks (which will never fail) is paranoid overkill


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## JackJac (Mar 13, 2017)

My Own Advisor said:


> I have no idea what the money is for, so given you have very little (admittedly) financial knowledge - that's a huge chunk of money to protect while you figure things out.
> 
> While you do some research with a Robo - I think splitting it between the big 5 banks - 100K each to get the CDIC coverage is a good call. Mind you, none of the big 5 banks are going anywhere anytime soon but you never know.
> 
> Take your time and good luck to you. You have an excellent problem to have.


Thanks muchly! I'm off to read "If You Can" right now.


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## steve41 (Apr 18, 2009)

OK.... you are 30 years old with $500K. What part of "Party Time" don't you understand?


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## JackJac (Mar 13, 2017)

steve41 said:


> OK.... you are 30 years old with $500K. What part of "Party Time" don't you understand?


Haha, not my style. I'm more of a "simple pleasures" type of guy.


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## OnlyMyOpinion (Sep 1, 2013)

i.The most important first thing, don't let your Mom clean up your desk.

ii.The second most important thing is to get the paper to a bank and deposit it. Expect some questions as to where it came from, expect a hold on the funds, expect to be steered to a bank 'advisor' to try to convince you to invest the money into one of their high cost mutual funds - do not do this. 
Keep the money in your existing bank account for now. I would not be fussed about the CDIC $100k limit. Spreading the funds around will just make it harder to keep track of and deploy when the time comes. 

iii.You need a financial plan and then an investment plan (http://www.finiki.org/wiki/Creating_a_financial_plan). Read the books noted above. Read about the easily established and maintained Canadian couch potato portfolio (http://canadiancouchpotato.com). 
$500k can be the seed capital to early financial independence, or it can be quickly pissed away - whichever way you go, you get to live with the results.


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## james4beach (Nov 15, 2012)

JackJac said:


> I want this 550K to be protected, so nothing high risk.


What do you mean by "protected" ? This means different things to different people. For example:

(a) I don't want this balance to decline below 550,000 under any circumstances
(b) I am OK with the risk of moderate declines (say 100,000 decline) if it means higher returns
(c) I am OK with significant declines (say 300,000 decline) if it means even higher returns

As you read material and talk with others, keep in mind that everyone has a different interpretation of what an acceptable risk is.

Starting point -- I agree, deposit that money in a bank. Don't let the bank people talk you into investing it. I would encourage you to make sure the money is fully CDIC insured.


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## none (Jan 15, 2013)

^ Your points are meaningless without an associated timeframe.


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## JackJac (Mar 13, 2017)

james4beach said:


> What do you mean by "protected" ? This means different things to different people. For example:
> 
> (a) I don't want this balance to decline below 550,000 under any circumstances
> (b) I am OK with the risk of moderate declines (say 100,000 decline) if it means higher returns
> ...


I would be open to short-term losses, if long-term growth was more-or-less guaranteed. I'm thinking index funds would therefore be the way to go. I'm still undecided as to whether or not I should hold on to the draft as I increase my financial IQ or deposit the whole sum in a bank and have 400K uninsured for a little while, until I decide what to do with it all. I don't think any of the big 5 are going belly up anytime soon, and the interest on 500K would be nice.


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## Dilbert (Nov 20, 2016)

Yes, I would get a brokerage account set up with TFSA, SDRSP and unregistered accounts and get the money deposited as per your allowances in the registered accounts first and put the rest in an unregistered account or maybe just an HISA. Watch out though, the rules for HISA can be brutal at the major banks...do your homework first.

And, as others have pointed out: beware of [email protected] ( the nice lady at the bank!). Never get advice from those who sell investments...


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## Koogie (Dec 15, 2014)

Dilbert said:


> Yes, I would get a brokerage account set up with TFSA, SDRSP and unregistered accounts and get the money deposited as per your allowances in the registered accounts first and put the rest in an unregistered account or maybe just an HISA. Watch out though, the rules for HISA can be brutal at the major banks...do your homework first.
> And, as others have pointed out: beware of [email protected] ( the nice lady at the bank!). Never get advice from those who sell investments...


Best advice so far, in my opinion. Mostly because it is immediately actionable. Putting all that cash in GICs or HISAs may seem bland or lame but at your current level of knowledge it is absolutely the best thing to do. Open and stuff some registered accounts as above and get the money working making more money. 

Then take your time and read the books, forums and Finiki as advised above. Learn first and then invest in equities by eventually using the HISA and GIC money. Do not do it the other way around.

I agree with the poster who said that if you handle this right now, it could set you up for life ! Think about that and don't squander the opportunity.


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## jargey3000 (Jan 25, 2011)

Watch out though said:


> can someone elaborate?


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## Dilbert (Nov 20, 2016)

jargey3000 said:


> can someone elaborate?


Sure, I was referring to fees for withdrawals and transfers, etc. Tangerine and other 'virtual' banks have way better flexibility and rates too, IMHO.


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## agent99 (Sep 11, 2013)

It's not likely a good time to invest in markets and interest rates are low. You do have a Good Problem, but not one with an easy solution if you want to protect your funds.

At a bank, you can put the money in a savings account and earn something like 0.4-0.8%. You can buy cashable or short term GICs with perhaps slightly higher interest. Longer term GICs would pay up to 2% (5yrs), but then your money would be locked in. https://www.ratesupermarket.ca/gic_rates There are also so-called High Interest Savings Accounts. https://www.highinterestsavings.ca/chart/

If you provided some idea of when you might need the funds, then more options could be suggested.


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## Eclectic12 (Oct 20, 2010)

JackJac said:


> I would be open to short-term losses, if long-term growth was more-or-less guaranteed. I'm thinking index funds would therefore be the way to go.


Nothing except GICs and a few items are guaranteed. 

If indexing interests you, there's http://canadiancouchpotato.com/ for info.




JackJac said:


> ... I'm still undecided as to whether or not I should hold on to the draft as I increase my financial IQ or deposit the whole sum in a bank and have 400K uninsured for a little while, until I decide what to do with it all.


No reason you can't go with one bank in the short term and in parallel setup other accounts with other banks. Once the hold period is over, you can transfer them or write a cheque to have the full $500K CDIC covered, which learning.

The main risk is that when setting up accounts or dealing with the bank that has the $500K lump sum, you likely will get suggestions/pressure to invest. As long as you make sure to insist on what you want, it should not be a big deal.


You say you are 30 ... how much TFSA contribution room do you have?
If you have qualified since the TFSA began and haven't used any up, that will allow something like $52K to be in a HISA, earning interest Canadian tax free.
http://www.taxtips.ca/tfsa/contributions.htm

Just make sure to remember that any withdrawals this year won't become contribution room until next year. Withdraw $10K from one's TFSA in 2017 then on Jan 1st, 2018 - in addition to the 2018 TFSA allotment, the $10K withdrawal becomes contribution room - boosting what is available.


Cheers


*PS*
If the plan is to earn interest while learning, I'd suggest checking out virtual banks such as Presidents Choice Financial (PCF) or Tangerine. Except for a few periods of promotions - usually the virtual banks offer better interest. 

For example, both PCF and CIBC are running TFSA interest promotions of 2.25% on new deposits until the end of March. If a new promotion does not start then PCF's TFSA is paying 0.80% on any balance while CIBC's TFSA pays 0.45% on a minimum balance of $25.

If you figure it will take you a while to sort out what to invest in, you could also assign a percentage to a couple of multi-year GICs.


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## agent99 (Sep 11, 2013)

Eclectic12 said:


> You say you are 30 ... how much TFSA contribution room do you have?
> If you have qualified since the TFSA began and haven't used any up, that will allow something like $52K to be in a HISA, earning interest Canadian tax free.


If he is out of work, or on min wage, he likely won't be paying much, if any tax. Unless he has income from other sources or if the $500k will be considered income (we don't know the source). Only $52k of the $500k could be put in tfsa if he has never contributed. Interest on $500k could be in the $5-10k range. If that is only income, or most of it, he may still not pay any tax.


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## Eder (Feb 16, 2011)

I'd make sure no part of that 500k is taxable then proceed with all the good advice above.


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## humble_pie (Jun 7, 2009)

.

from a nearby thread ... another case of a brand-new cmffer with zero posting history who declares that he's suddenly got a lot of money but no clue how to invest so could everyone please suggest ...




doctrine said:


> Isn't it amazing how many people with $500k+ show up on forums like this, ask for very basic advice, and then disappear? It's almost like everyone suddenly comes into hundreds of thousands of dollars through sheer luck and clearly don't spend even a few hours doing basic investing research, but instead consult random strangers on financial forums.



this thread looks like it might be an engineered promo infomercial designed to advertise a newish robo-service named Modern Advisor.

hmmmn would there be any cmf members who are business partnering with Modern Advisor, now ... each:


.


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## peterk (May 16, 2010)

Spudd said:


> This article is talking about brokerages, not banks. For banks it is good to split it up, just in case.





none said:


> "just in case' That's a bit silly. Dump it into a brokerage instead - you can buy something that'll give you some interest but going to 5 different banks (which will never fail) is paranoid overkill


Generally I don't agree with none about much , but for this I do.

Splitting all the money up is way overkill and a headache, keep it simple.

If you were to invest ANY money at all, that extra protection would be pointless.

I'm sure if people much smarter than me did the math, the risk of having say 20k in a stock ETF and 480k cash spread over 5 banks, would far outweigh the risk of having 500k held in cash at a single bank, no?


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## Spudd (Oct 11, 2011)

peterk said:


> Generally I don't agree with none about much , but for this I do.
> 
> Splitting all the money up is way overkill and a headache, keep it simple.
> 
> ...


I don't disagree that it's very unlikely for one of the big 5 to fail. But if instead of big 5, one was using little banks to chase higher interest rates, it becomes more important.


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## Eclectic12 (Oct 20, 2010)

agent99 said:


> If he is out of work, or on min wage, he likely won't be paying much, if any tax ...


Missed that part ... but then again, as the TFSA can hold index ETFs/MFs - getting familiar with it plus evaluating which offering meets one's needs investment as well as expense-wise, is likely not a bad move. 

One of the nice things about the TFSA is that should the OP decide to move $$ out of the savings TFSA to a brokerage TFSA that offers index funds, all that has to be done is withdraw in mid to late Dec and then when the calendar changes in Jan, there are no worries about an over contribution as $10K withdrawn in Dec adds in Jan $10K of contribution room to absorb the full $$$.

Compared with making an RRSP contribution at a low income level where the future withdrawal is likely at a higher income level / tax rate ... I don't see any downside to using the TFSA.


Cheers


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## humble_pie (Jun 7, 2009)

stashing $500k temporarily in one bank is fine, onlyMO said so as well.

but the thing is, we may all be talking to a cipher
i mean, this thread looks like a robo service promotion

remember that thread about investing in shipping containers? the OP was a brand-new cmffer but lots of members on here took him seriously, started giving all kinds of prudent advice (most were saying don't invest in containers)

finally i said It's a container salesman.

some fun things then happened. The salesman appeared & laughed that yes he was, in fact, a container salesman.

mukhang pera appeared from his remote island in north georgia strait & talked about sea wolves.

onlyMO had the last laugh. Is mukhang able to see that container ship steaming in the channel, far out at sea, OMO wanted to know.

.


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## Eclectic12 (Oct 20, 2010)

peterk said:


> Generally I don't agree with none about much , but for this I do.
> 
> Splitting all the money up is way overkill and a headache, keep it simple ... the risk of having say 20k in a stock ETF and 480k cash spread over 5 banks, would far outweigh the risk of having 500k held in cash at a single bank, no?


If the goal is to invest as well as keep it simple - why not put the $500k into a brokerage then buy less than $100K chunks of the broker's preferred HISA MF?
http://www.canadiancapitalist.com/high-interest-savings-accounts-at-discount-brokers/

The $100K and under allotments as I understand it are CDIC covered. If it is the broker's preferred suite, there's no buy/sell costs. As the OP decides to invest in other investments, some brokers will read the $$ value of these MFs to allow one to buy the stock/ETF/MF/REIT with simply a warning that if the trade goes through, some of the HISA MF will need to be sold.


Cheers


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## lonewolf :) (Sep 13, 2016)

JJ I would go with accelerate financial or any of the Manitoba online credit unions. CDIC insurance makes banks weak as they can risk money & still get people to loan them money (GIC is a loan to the bank) After deleveraging drops the markets 80+% maybe start scaling in. It is the safe play as well as the path that will most likely to make you the richest. No conflict of interest @ credit union


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## Mukhang pera (Feb 26, 2016)

humble_pie said:


> .
> 
> from a nearby thread ... another case of a brand-new cmffer with zero posting history who declares that he's suddenly got a lot of money but no clue how to invest so could everyone please suggest ...
> 
> ...


I dunno hp, perhaps that shipment of cocaine romped home and the money has to be parked somewhere pending the next deal.


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## Mukhang pera (Feb 26, 2016)

humble_pie said:


> mukhang pera appeared from his remote island in north georgia strait & talked about sea wolves.
> 
> onlyMO had the last laugh. Is mukhang able to see that container ship steaming in the channel, far out at sea, OMO wanted to know.
> 
> .


Yes, I see it. But it has capsized and a lot of containers are drifting toward our shore. I guess I'll be getting into the container salvage business.


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## agent99 (Sep 11, 2013)

> So far I've considered Robo Advisors,


*Steer Clear* of ROBO ADVISORS. 

Learn how to invest for yourself and fully understand what you invest in. 

In no way allow a computer to tell you what you should be doing.


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## JackJac (Mar 13, 2017)

Alright I decided I'm just going to toss it all into Scotia or CIBC for the time being. If I find myself becoming too indecisive in regards to investments, I'll just split it between the big 5. 

In regards to when I'll need the money or what it's for: I really don't know. I have no immediate pressing obligations or any in the foreseeable future.


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## CalgaryPotato (Mar 7, 2015)

humble_pie said:


> .
> 
> from a nearby thread ... another case of a brand-new cmffer with zero posting history who declares that he's suddenly got a lot of money but no clue how to invest so could everyone please suggest ...
> 
> ...


I don't really get that sense, he did briefly mention it in his first post as a possibility, but hasn't brought it up again since.

And there aren't really a lot of free places where you can ask for unbiased information on your personal finance situation on the web. I'm not surprised people are drawn here for that.


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## Argonaut (Dec 7, 2010)

It would be interesting to run the probabilities on that question. How many active CMF users are there? 100? 200? The odds of any one of us running into $500k out of nowhere is very low. But if you think about the entire population of Canada, the odds of it happening to someone in this country would be higher. And then they could find this website somehow, sign up, and post. The odds of Mr. or Ms. Windfall just-so-happening to be a CMF user already is about 0.5%, assuming every user who has signed up is both a unique individual as well as a Canadian (which is highly unlikely).


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## CalgaryPotato (Mar 7, 2015)

Honestly I signed up to this site, because I had a $200K+ inheritance coming.

It isn't that rare.


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## gibor365 (Apr 1, 2011)

JackJac said:


> Alright I decided I'm just going to toss it all into Scotia or CIBC for the time being. If I find myself becoming too indecisive in regards to investments, I'll just split it between the big 5.
> 
> In regards to when I'll need the money or what it's for: I really don't know. I have no immediate pressing obligations or any in the foreseeable future.


All big 5 banks will give you around 0.8% interest, except maybe CIBC who give 1.75% on Saving account , but only until Mar 31. 
I'd put your money into Tangerine (it's belong to Bank of Nova Scotia - so very save), they will give you 2.4% for 6 months and after you can decide how to proceed.


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## JackJac (Mar 13, 2017)

CalgaryPotato said:


> Honestly I signed up to this site, because I had a $200K+ inheritance coming.
> 
> It isn't that rare.


Just ignore them. Their nonsense only serves to derail the thread.


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## humble_pie (Jun 7, 2009)

CalgaryPotato said:


> I don't really get that sense, he did briefly mention it in his first post as a possibility, but hasn't brought it up again since.




calgary i was not referring to the OP at all. If you look at my post, you would see that the reference is to another forum member.

in point of fact, i believe that a robo-advisor might serve this OP very well, certainly in the beginning while he explores whether he's willing to put in the work of learning how to DIY an investment portfolio himself.

an initial robo investment portfolio could last for one or several years, or possibly even forever. A client could certainly choose a conservative investment strategy.


.


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## JackJac (Mar 13, 2017)

humble_pie said:


> calgary i was not referring to the OP at all. If you look at my post, you would see that the reference is to another forum member...


I find that very hard to believe, actually. One merely needs to survey your posts in this thread and it becomes quite apparent that you were referring to me as a plant or "cipher" and referring to this thread as a robo-ad. Moreover, in the other thread entitled: "Leveraged investing - general questions" in post #41 you stated the following: _"ok you might know lots of people who think like this, but how many of them suddenly wake up to find a cheque for $550,000 sitting on their desk.."_ 

Now, can you tell me precisely which member you were referring to? Actually, don't bother -- you'd be better off taking a slice of your humble pie and apologizing for your baseless accusations and bald-face lie. But that is, of course, your choice. Now, I think I shall take my own advice and not get caught up in this nonsense.

Thank you very much.


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## james4beach (Nov 15, 2012)

JackJac said:


> Alright I decided I'm just going to toss it all into Scotia or CIBC for the time being. If I find myself becoming too indecisive in regards to investments, I'll just split it between the big 5.


There's an easier way to keep it all CDIC insured without going to many banks. Let's talk about Scotia for example. Here's what I would do with the 500K -- this is meant to be an interim solution while you figure out strategies.

Scotia has 4 different issuer names, each qualifying separately for CDIC insurance:
The Bank of Nova Scotia
Scotia Mortgage Corporation
Montreal Trust Company of Canada
National Trust Company

(a) With 100K, use Scotia Online to purchase a 5 year annual compounding GIC at 2.0% interest under "Scotia Mortgage Corporation" (you can actually choose this as a field in the web form)
(b) With 100K, buy a 2 year annual compounding GIC at 1.7% under "Montreal Trust Company of Canada"
(c) With 100K, buy a 1 year GIC at 1.4% under "National Trust Company"
(d) Another 100K in a cash savings account, which falls under "The Bank of Nova Scotia"
(e) Remaining 100K into CIBC or whatever your second bank is

With this approach, all your money is CDIC insured. Some of the money is locked away for a few years (which is good), but you still have 200K accessible today, and 300K accessible in just a year. You could even stash away more of it in 5 year GICs, perhaps 2 x 100K in two separate 5 year GIC deposits.

That's the general idea anyway. Except for step (e), you can do all of this at Scotiabank and can even set it all up through Scotia Online, once you have an active account that permits GIC purchases. All the GICs would live inside that.

If you'd like more details or an example, send me a private message and I can show you a screen shot of what it looks like to hold multiple GICs within Scotia Online.


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## JackJac (Mar 13, 2017)

james4beach said:


> There's an easier way to keep it all CDIC insured without going to many banks. Let's talk about Scotia for example. Here's what I would do with the 500K -- this is meant to be an interim solution while you figure out strategies.
> 
> Scotia has 4 different issuer names, each qualifying separately for CDIC insurance:
> The Bank of Nova Scotia
> ...


That's great James, thanks! I'll definitely be looking into this and probably shoot you a PM.


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## AMABILE (Apr 3, 2009)

I personally would not tie up the money in gic's (esp 5 yrs ) 
I prefer gibor's idea - go with tangerine - backed by bank of nova scotia


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## gibor365 (Apr 1, 2011)

AMABILE said:


> I personally would not tie up the money in gic's (esp 5 yrs )
> I prefer gibor's idea - go with tangerine - backed by bank of nova scotia


True! No point to buy 5 years GIC and get only 2%, when in Tangerine you gonna get 2.4% for 6 months for regular saving account (100% liquid) and also get good rate after those 6 months ... my mom got Tangerine promo 3.25% (I transfered all my available cash also to her account). If you scared to exceed 200K CDIC limit, you may have another joint account with any of your family members (or personal TFSA) and have another 100K completely insured by CDIC. Or put 100K into EQ bank that gives 2% of regular saving account... Transfers in/out Tangerine or EQ bank is very easily done online.


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## james4beach (Nov 15, 2012)

These promotions offer short term boosts, but GICs still pay off better. We can calculate both and see which is better, easy enough. Let's say your choice is between cash in Tangerine, and a 2 year Scotia GIC at 1.7% since both of these are pretty short term.

Tangerine: gets you 2.4% for the first 6 months followed by their usual 0.80% rate for the remaining time. The resulting *average interest rate is 1.20%* over the entire time period. And insufficient CDIC insurance due to a single issuer name.

2 year Scotia GIC: pays you 1.7%

Therefore the GIC (even just a 2 year one) offers you higher interest than Tangerine, and you can keep up to 400K of your money insured within a single container account, instead of opening multiple joint accounts with other banks.



gibor365 said:


> Or put 100K into EQ bank that gives 2% of regular saving account


This sounds interesting and this may be a good second bank to put some of your money into, though you should not surpass 100K due to the CDIC limit.

Maybe the best solution is to put 400K into Scotia (mostly GICs and some cash) and 100K into EQ bank (cash at 2.0%). This gives you a high overall interest rate, keeps all your money CDIC insured, and still provides you 100K of immediately available money. That's not a bad result and involves only dealing with only two banks.


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## gibor365 (Apr 1, 2011)

James, you have wrong link  , go to https://www.eqbank.ca/personal-banking/features-rates and you'll see that EQ banks gives 2% ....



> Tangerine: gets you 2.4% for the first 6 months followed by their usual 0.80% rate for the remaining time. The resulting average interest rate is 1.20% over the entire time period.





> Therefore the GIC (even just a 2 year one) offers you higher interest than Tangerine.


No, you are wrong! And you continue to give this wrong info! My MIL finished 2.4% in February and got 2% for another 3 months .... my mom got 3.25% for 3 months... 
I'm more than 5 years is dealing with online banks and never got less than 1.9% ... my average 5 years rate is around 2.3-2.4% ... 
btw, Oaken that also CDIC secure gives now 1.95% for 2 years GIC https://www.oaken.com/gic-rates/
Peoples Trust (also CDIC insured ) also 1.95% for 2 years.... - so it's additional $1,250/year comparing to your 1.7% Nova Scotia GIC...
However, I wouldn't buy those GICs, simply because OP can easily get 2.4% now in Tangerine (it's additonal $1,750 for 6 months for 500K! and money 100% liquid) .... If OP scared to have 500K in Tangerine (that btw belong to Bank of Nov a Scotia) , he can put part of money with 2% in EQ bank ...

P.S. With GIC , I'm searching for promos.... last year Oaken had promo , all GIC from 18 months and up for 2.75% ....
P.P.S. btw, CIBC give 1.75% practically every year for 3 months period


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## james4beach (Nov 15, 2012)

So Tangerine makes various offers to people at hidden promotion rates? Their web site only shows 2.4% promo and then 0.8% regular rate.


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## gibor365 (Apr 1, 2011)

james4beach said:


> So Tangerine makes various offers to people at hidden promotion rates? Their web site only shows 2.4% promo and then 0.8% regular rate.


Sure! There were several threads about it on CMF. Yes, in theory they may give you 0.8%, but they never did it to me or my family members or several CMF guys who use Tangerine ,
in the worst case, if they would offer me ONLY 0.8%, I'd right away move all cash to EQ Bank 2% or CIBC 1.75% .... and wait to another promo in Tangerine or PCF (that you used by yourself)...

P.S. imho now it's the worst time ever to buy GIC longer than 2 years (unless you get promo GIC like I got in Oaken), the rates for GICs are the lowest in last 20 years

Just checked, in 2016 my average interest on HISA /GIC was 2.42%


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## Eclectic12 (Oct 20, 2010)

humble_pie said:


> calgary i was not referring to the OP at all. If you look at my post, you would see that the reference is to another forum member ...


It is not clear to me ... I don't recall the other forum member requesting help for investing big $$$. I recall specific questions where the refusal to accept what long time investors were saying was the answer triggered people to speculate that the other member had no money or investing experience where the response I recall is that they had $400K.

Intended or not, the $500K plus likely puts into most people's mind that this thread's OP is who is being referred to.




humble_pie said:


> ... in point of fact, i believe that a robo-advisor might serve this OP very well, certainly in the beginning while he explores whether he's willing to put in the work of learning how to DIY an investment portfolio himself ...


??? ... this doesn't fit with the comments, as I read them.

If a robo-advisor is potentially good then questioning whether going with one that is established with a longer track record than a recent newbie makes a lot more sense than the speculation about a possible "engineered promo infomercial designed to advertise a newish robo-service named Modern Advisor" or wondering about what CMF members who are business partnering with the newbie.


Regardless ... with one mention of the newish robo-service as one of three options then zero mention over another four posts - I don't see engineered promos going on.


Cheers


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## JackJac (Mar 13, 2017)

James my man, I'm heading to the bank today and we're thinking along the same lines when you stated: "Maybe the best solution is to put 400K into Scotia (mostly GICs and some cash) and 100K into EQ bank (cash at 2.0%). This gives you a high overall interest rate, keeps all your money CDIC insured, and still provides you 100K of immediately available money. That's not a bad result and involves only dealing with only two banks."

Although, I'm not too keen on chasing the highest interest rates for savings accounts because we all know how quickly that can, and does, change overnight. 

Thanks once again, everyone.


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## james4beach (Nov 15, 2012)

If it's useful, here's a screen shot of Scotia Online. On mine, there's an investment container account and I can buy GICs underneath it.

Because you're talking about large amounts of money, I suggest that you go to a branch and see if they can offer you higher than the posted GIC rates. Here are the posted rates (e.g. 5 years at 2.00%) - http://cgi.scotiabank.com/rates/gic.html

If they don't offer you more than the posted rates, just buy them online yourself. Make sure you are only looking at "traditional" GICs: annual compounding


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## JackJac (Mar 13, 2017)

james4beach said:


> If it's useful, here's a screen shot of Scotia Online. On mine, there's an investment container account and I can buy GICs underneath it.
> 
> Because you're talking about large amounts of money, I suggest that you go to a branch and see if they can offer you higher than the posted GIC rates. Here are the posted rates (e.g. 5 years at 2.00%) - http://cgi.scotiabank.com/rates/gic.html
> 
> ...


OK James bear with me as I ask elementary questions: 

1) How many GICs can I hold?

2) In what type of account do I hold the GICs? 

3) If I have 5 different GICs with 100K in each -- would each GIC be insured by the CIDC?


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## OnlyMyOpinion (Sep 1, 2013)

A person should definately ask for and receive 0.25% over the bank's best posted rate for a given term, especially when dealing with larger amounts. Otherwise go elsewhere.


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## james4beach (Nov 15, 2012)

JackJac said:


> 1) How many GICs can I hold?


I don't think there's any limit, but I've only held up to 10 of them.



> 2) In what type of account do I hold the GICs?


It's a Scotia Investment account. Once that type of account is opened, it will appear in the online banking portal along side chequing and savings accounts (you should definitely also get set up with a savings account such as Momentum Savings).

I opened this a long time ago so I can't remember how the Investment account came to be. You can try phoning Scotia ( 1-800-472-6842 ) or talk with the branch to see how they do this these days. In any case I'd talk with them to try and get a better rate than their posted GIC rate. When putting 100K into a GIC, you should really press them to give you a higher rate than what's posted. Keep saying things like "I can take this to many other banks that pay higher rates", or "Can you give me an incentive to deposit this here instead of at your competitor?"



> 3) If I have 5 different GICs with 100K in each -- would each GIC be insured by the CIDC?


Short answer: no, because Scotia only has 4 issuer names. At 100K limit each, the total CDIC insurable deposits with Scotia are 400K.

CDIC insures up to 100K with any one of the issuer names that is registered with CDIC. They don't count the number of GICs but rather, add up the total value under any one issuer's name. For example if you have 20K cash, 50K in one GIC and 30K in another GIC all under issuer "X", this total of 100K under issuer "X" is CDIC insured.

Large banks like Scotia have multiple issuer names and can provide GICs under each one of these names.

I count 4 different CDIC issuer names under the Scotia umbrella: The Bank of Nova Scotia, Scotia Mortgage Corporation, Montreal Trust Company of Canada, National Trust Company

Therefore the maximum insured deposits you can keep within Scotia is 4x100 = 400K. I don't see any way to insure all 500K at Scotia unless (as gibor mentioned) you open an additional joint account with someone.

The chequing/savings account you have will probably be under "The Bank of Nova Scotia", so you might as well keep 100K under that name. Their Momentum account seems to pay 1.3% which isn't bad at all. Doing this will exhaust the CDIC limit of one of the issuer names.

That leaves you with 3 other issuer names remaining. You could open one GIC with each (3 x 100K), and have up to 300K of GICs insured that way, by using the different issuer names. Or open two GICs with each (3 x 2 x 50K)... doesn't matter how many.

That brings you to a total of 400K fully insured deposits with Scotia. I think for the rest of it, you might as well deposit money at a second bank that also pays high rates.

It's a good idea to stagger the GICs. You can set it up so that over the next 5 years, every 6 months there will be one GIC maturing. This means that although your money is locked up, ever 6 months a big chunk of money will become available. As you gain more knowledge you can then invest this money in different ways, keep it as cash, or roll it back into GICs if you want.

Here's an example arrangement that could work:


 at Scotia, 100K in chequing + Momentum savings (cdic: The Bank of Nova Scotia)
 at Scotia, 100K in two 50K GICs (cdic: Scotia Mortgage Corporation)
 at Scotia, 100K in two 50K GICs (cdic: Montreal Trust Company of Canada)
 at Scotia, 100K in two 50K GICs (cdic: National Trust Company)
 at EQ Bank, 100K in savings account (cdic: Equitable Bank)


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## james4beach (Nov 15, 2012)

I should add that I don't intend to endorse Scotia. But I do personally hold some GICs with them and have for about 20 years, and you mentioned Scotia in one of your earlier posts.

You can do this same kind of thing at many other different banks. In any case you will want a big bank that has multiple CDIC issuer names.

I agree it's a bit of work to get it all set up. My only word of caution is that Scotiabank, by default, automatically "re-invests" GICs when they mature into another GIC of the same term. You have to phone before the maturity date and instruct them to change the instructions so that the thing does not automatically renew into a new GIC.


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## Spudd (Oct 11, 2011)

If you hold the GIC's in an investment account, you shouldn't be limited to just Scotia GIC's, right?


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## CalgaryPotato (Mar 7, 2015)

james4beach said:


> I should add that I don't intend to endorse Scotia. But I do personally hold some GICs with them and have for about 20 years, and you mentioned Scotia in one of your earlier posts.
> 
> You can do this same kind of thing at many other different banks. In any case you will want a big bank that has multiple CDIC issuer names.
> 
> I agree it's a bit of work to get it all set up. My only word of caution is that Scotiabank, by default, automatically "re-invests" GICs when they mature into another GIC of the same term. You have to phone before the maturity date and instruct them to change the instructions so that the thing does not automatically renew into a new GIC.


Every bank does that, but usually you can change the instructions online.


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## AMABILE (Apr 3, 2009)

Jack, sorry for repeating myself, but i also had 500k to
invest after selling a rental property

placed 100k with EQBANK

placed 400k with TANGERINE (backed by BNS, so not too worried about CDIC)


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## gibor365 (Apr 1, 2011)

AMABILE said:


> Jack, sorry for repeating myself, but i also had 500k to
> invest after selling a rental property
> 
> placed 100k with EQBANK
> ...


I agree! DOn't see a points why for GIC/HISA to deal with this mess of opening discount brokerage account and buying 5 different GICs from different issuers and getting much less interest from simple HISA in Tangerine/EQ bank....
Banks like Tangerine or PCF, not only give you better rates, they give you debit card, free cheques and no fee accounts...


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## james4beach (Nov 15, 2012)

My suggestion does not involve using a discount brokerage account. Any branch can open the appropriate container account that holds the GICs, as I describe


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## gibor365 (Apr 1, 2011)

james4beach said:


> My suggestion does not involve using a discount brokerage account. Any branch can open the appropriate container account that holds the GICs, as I describe


Not sure you can buy


> (b) With 100K, buy a 2 year annual compounding GIC at 1.7% under "Montreal Trust Company of Canada"
> (c) With 100K, buy a 1 year GIC at 1.4% under "National Trust Company"


 having just bank account


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## JackJac (Mar 13, 2017)

james4beach said:


> I don't think there's any limit, but I've only held up to 10 of them.
> 
> 
> 
> ...


That's great James, thanks again for all your help!


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## james4beach (Nov 15, 2012)

gibor365 said:


> Not sure you can buy having just bank account


I'm able to do it from Scotia Online banking, all within the single "Investment" account.

I think it's possible because these are all sub issuers under the Scotia family. Those aren't external bank issuers, such as TD or Home Trust... the names look weird but they are parts of Scotiabank.


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## Jaberwock (Aug 22, 2012)

If you want be rich, invest it in dividend paying stocks with an emphasis on stocks that regularly increase their dividends. By the time you reach 50, you will have more money than you know what to do with.

If you want to be poor, invest it in GICs which don't even keep up with inflation and sit back and watch your money evaporate.


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