# How do you allocate your savings?



## DollaWine (Aug 4, 2015)

Hey everyone, just curious to know how everyone divides their savings/investment accounts. My main questions are:

1. How much % of your income do you save in CASH versus how much do you INVEST?
2. How many savings and investment accounts do you have and what are they for?


Mine is as follows and was curious to know if it's good as is or should I consolidate some of them:


1. Daily Chequing account

2. Emergency fund (HISA - cash)
3. Short-term savings account (HISA - cash) - this will change every few years depending on what I'm saving for. Right now it's savings for a car to buy in cash
4. Long-term savings account (TFSA - cash) - future house down payment

5. Scotia iTRADE account (TFSA - ETFs)
6. Scotia iTRADE account (RRSP - ETFs)


Wondering if #4 and #5 should be merged. Would I just be better off with only the Scotia iTRADE TFSA and keep a % of it in cash and a % in investments? Is there even a point to having a TFSA for an account that is 100% cash?


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## CalgaryPotato (Mar 7, 2015)

I guess it depends, if your TFSA cash is in an account that pays a higher percentage than your scotia iTrade does then it probably makes sense to keep them separate.

I'm going to make some assumptions here, your RRSP & TFSA are both full? In that case you could consider keeping your cash completely in your RRSP and move some of your Canadian ETFs into unregistered? That is the traditional thinking, however cash is paying such a low percentage right now it may not be worth doing. The way you are doing it now probably makes the most sense. 

2,3,4 could be the same account. But if it helps you keep your goals straight keeping them separate than it doesn't hurt anything. 

My accounts are a slight mess:

1) Chequing
2) US savings
3) Canadian Savings
4) Wife's GIC RRSP 
5) Wife's RBC RRSP
6) My RRSP
7) My TFSA
8) Wife's TFSA
9) Kids RESP
10) Child RDSP
11) Child 1 savings
12) Child 2 savings

Makes yours look simple by comparison.


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## DollaWine (Aug 4, 2015)

CalgaryPotato said:


> I guess it depends, if your TFSA cash is in an account that pays a higher percentage than your scotia iTrade does then it probably makes sense to keep them separate.
> 
> I'm going to make some assumptions here, your RRSP & TFSA are both full? In that case you could consider keeping your cash completely in your RRSP and move some of your Canadian ETFs into unregistered? That is the traditional thinking, however cash is paying such a low percentage right now it may not be worth doing. The way you are doing it now probably makes the most sense.
> 
> ...


Hmm yeah I should find out the interest rate for cash in an iTRADE TFSA. And nope, my TFSA's and RRSP are far from maxed (24 years old).

That's a lot of accounts!

Edit: Just live-chatted with an iTRADE rep - no interest on cash within an iTRADE TFSA


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## OnlyMyOpinion (Sep 1, 2013)

As CP said, whatever works best for you. My caveat would be - are you paying fees on any of these accounts that could be eliminated by consolidating some accounts?
As to how much cash, that depends what is on the horizon for the next few months or the year. Because savings-type rates are so abysmal we don't get fussed trying to shop around to get the best few points. We just leave it in our no-interest chequing account, but if it gets large enough we do move it from our chequing into our self-directed trading account and put it into a high interest savings fund or longer term fixed income. But we always leave enough ($2000) to prevent monthly chequng fees.
We are on the older end of the spectrum and like to keep things simple as a couple. So we have one joint chq account, one joint trading acc, and each have one self-directed RRSP, one self-directed TSFA, and a shared credit card, all with TD.
So I guess as an individual that would be 4 accounts plus the credit card.


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## AltaRed (Jun 8, 2009)

DollaWine said:


> Hey everyone, just curious to know how everyone divides their savings/investment accounts. My main questions are:
> 
> 1. How much % of your income do you save in CASH versus how much do you INVEST?
> 2. How many savings and investment accounts do you have and what are they for?
> ...


Think it is just fine to keep #4 and #5 separate since you can get much better interest on a HISA TFSA with an online bank (e.g. upwards of 2%) than you can with any brick and mortar bank or discount brokerage. I'd be more likely to combine #2 and #3 and that could be at the same insitution as #5 (but different account of course).

Added: Each of my brokerage accounts has some slush cash sitting around awaiting investment but it is not material. Cash in brokerage accounts does not earn any interest unless you have enough cash to purchase the broker's in-house ISA, most of which currently pay about 0.75%


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## CalgaryPotato (Mar 7, 2015)

DollaWine said:


> Hmm yeah I should find out the interest rate for cash in an iTRADE TFSA. And nope, my TFSA's and RRSP are far from maxed (24 years old).
> 
> That's a lot of accounts!
> 
> Edit: Just live-chatted with an iTRADE rep - no interest on cash within an iTRADE TFSA


Why don't you keep your medium to long term cash inside a TFSA then if you still have room?


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## DollaWine (Aug 4, 2015)

CalgaryPotato said:


> Why don't you keep your medium to long term cash inside a TFSA then if you still have room?


I figured the downside to this would be that it's "wasted" contribution room, as I wouldn't want my house downpayment money in the market, it would stay as pure cash sitting in a TFSA growing at 0.9%. Instead, I could slowly contribute to my iTRADE TFSA and invest everything inside it. Sure it would take a while to max out, but at least everything in it would be growing at a good investment rate. Unless I'm missing something...


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## LXG (Feb 16, 2017)

> Is there even a point to having a TFSA for an account that is 100% cash?


Yes because interest from a non-TFSA HISA is still taxable income.

My accounts are a bit of a mess:
1. Personal Chequing
2. Joint Chequing (with my ex, which we kept open for a year after separation with $1000 in case we had any automatic payments set to come out)
2. Savings
3. Other savings (with a $0 balance that I really ought to close)
4. Cash TFSA (this is my emergency fund)
5. BMO Investorline RRSP
6.a. Work RRSP (part of the ESPP, contains only company stocks)
6.b. Work Vested account (part of the ESPP and share bonuses, contains only company stocks)
6.c. Work Options (from options bonuses)
7. RESP for the first kid


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## CalgaryPotato (Mar 7, 2015)

DollaWine said:


> I figured the downside to this would be that it's "wasted" contribution room, as I wouldn't want my house downpayment money in the market, it would stay as pure cash sitting in a TFSA growing at 0.9%. Instead, I could slowly contribute to my iTRADE TFSA and invest everything inside it. Sure it would take a while to max out, but at least everything in it would be growing at a good investment rate. Unless I'm missing something...


Well why not keep it in there, until you run out of room? 

I don't see a point in paying taxes (even a small amount) while you have RRSP and or TFSA room available.


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## AltaRed (Jun 8, 2009)

I agree except if the OP finds it easier to manage them separately. Sometimes ease and convenience (the buckets concept) is worth a few Starbucks.


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## CalgaryPotato (Mar 7, 2015)

AltaRed said:


> I agree except if the OP finds it easier to manage them separately. Sometimes ease and convenience (the buckets concept) is worth a few Starbucks.


Well I agree, but it really depends on the amount and the time period.

If he has enough for a car in cash, a house down payment, and an emergency fund saved up for a couple of years, that could add up to a lot of Starbucks in lost taxes. (also of course depending on his tax rate)


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## OutofBounds (Dec 7, 2016)

I'm a pretty big rookie on finances and am revamping everything as I learn but here's how mine are set up right now. Naturally I'm also open to suggestions on streamlining and better things:

1. Scotiabank Chequing account - main account for bills, day to day expenses etc
2. Scotiabank Momentum Savings account - currently not being used but it was for a home downpayment before that was drained to pay down debt.
3. Scotiabank RRSP account - haven't put money into it in years due to not understanding RRSPs
4. Scotiabank TFSA - this was my first TFSA and is now the cash one. Home downpayment money will probably be put in here to earn interest tax free.

5. RBC Chequing account - this is my play/toy/fun money account. 
6. RBC joint Savings account with my girlfriend - our combined vacation savings. 

7. Tangerine Chequing account - emergency cash funds (vehicle/appliance/house repairs etc)
8. Tangerine Savings account - emergency savings (job loss)
9. Tangerine TFSA - invested in an Equity Growth Portfolio as my retirement savings. 

I also have a Line of Credit and Visa card through Scotiabank. 

Crap, that's alot of accounts!! LOL


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## AltaRed (Jun 8, 2009)

To respond to the OP, I am in retirement withdrawal mode. I hold about 10% (of my financial net worth) in cash and cash equivalents. A significant part of it is a reserve to fund big purchases like an expensive trip or new vehicle and another significant part of it is for opportunistic investment equity purchases. The list:

- Scotiabank chequing
- Scotiabank chequing (joint)
- HISA online banking accounts (PCF, PT, CDF, Zag) A few have zero balance with Zag currently paying the best (1.65%) and it holds the reserve to fund big puchases. I move the money to the one of the 4 mentioned that pays the best. PT should (and will) be closed as it has not been competitive for some time. PCF occasionally has a 2+% promotion. CDF may be gone in a year if it stays non-competitive. I don't like account proliferation.
- Scotia iTrade Cash Account - all equities/ETFs
- Scotia iTrade RRSP - smallish account - all fixed income GIC/Bonds/Debentures
- Scotia iTrade TFSA - all equities
- BMO Investorline Cash Account - all equities/ETFs + BMO Savings Builder (currently 1.2%) that holds cash for opportunistic equity purchases in BMO IL + BMO AccountLink Chequing attached to the Investorline Account


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## Earl (Apr 5, 2016)

I keep about $3000 in cash in my checking account, and have no cash other than that.

I already own a house and am not saving up to purchase anything, so I don't see any reason to keep a lot of money in cash. I have a LOC for any emergencies. Other than that, I have a TFSA and an RRSP, which are entirely full of stocks and ETFs. If I need to make a big purchase (eg a car) I would pay for it with my LOC and then pay down my LOC as aggressively as I can.


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## james4beach (Nov 15, 2012)

A thread from a year ago but I couldn't find a better fit.

I maintain a 25% allocation to "cash and cash-like" things which include GICs in a ladder. I consider the GICs cash-like because I stagger them to mature every few months.

I'm currently using Simplii which has the 3% promotion until the end of this month. After that I'm thinking of transferring the cash back to Outlook Financial. I just noticed today that the cash interest rate is up to 2.0%

According to my records the last time their cash rate was this high was Dec 2014. Even Outlook is slightly shy of where they should be right now. Back in Dec 2014, the BoC overnight rate was 1.00%. Today the BoC overnight rate is 1.25%, so if Outlook is consistently staying 1% above the BoC rate, I'd expect them to be at 2.25% today.

Perhaps more noteworthy is that Outlook's 5 year cashable GIC is now 3.10%. According to my records the last time it was this high was December 2013.


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## gibor365 (Apr 1, 2011)

james, why you don't use Tangerine?! imho it's more safe than Outlook... and in last 5 years I don't remember when I wa getting less than 2.5% on HISA


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## canew90 (Jul 13, 2016)

Retired and we have joint accounts for all our cash.
1. Bank Chequing joint
2 Tangerine Savings joint where $25k - $30k is held
3. Computershare for Non-Reg dividends stocks deposited to bank
4. Computershare with Non-Reg DRIP stocks, joint
5. All investment accounts at ShareOwner Investments, 2 TFSA, 2 RRIF and Joint stocks

No bonds or GIC's


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