# TD Money Market Funds??



## cannadian (Dec 30, 2011)

Hey folks, so my portfolio brings in about $100 every quarter in dividends, so with $29 commissions until my account is worth $50k this is clearly not enough money to buy stock with.

My plan is to let the dividends keep accumulating until I have about $1000 worth of them before I buy any stock at this point, except my TFSA barely pays any interest so I'd like to let that cash sit and grow in a money market fund.

I'm somewhat new to the investing world, and I've never purchased a money market fund before, so does anyone know if TD charges you a commission to buy their money market funds if you're using TD Waterhouse? (I believe I heard that they dont?) And if not, does anybody have any advice on selecting a money market fund etc? From what I know they're guaranteed, you can trade them out whenever you want, and they pay a better interest rate than my TFSA...

Does this sound like a good plan? If not, what would you suggest I do with my dividends until the pool becomes large enough (I don't want to do a DRIP).

Thanks!


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## avrex (Nov 14, 2010)

That is correct. 
TD Waterhouse does not charge you to purchase their own Canadian Money Market Fund (TDB164).
However, after the 0.75% MER is applied, you're return is almost nil. (i.e. 0.42%)

Another alternative is to purchase a High Interest Savings Account fund through your TD Waterhouse account. 
These will currently pay you 1.25%, with no commission to purchase.

[Edit: I just reread your post. You are accumulating up to $1000 before you redeploy to stocks. Then yes, I would stick with the money market fund, or even cash until you are ready to deploy. The High Interest Savings Account funds that I mentioned, typically have $1000 minimums to purchase.]


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## cannadian (Dec 30, 2011)

avrex said:


> That is correct.
> TD Waterhouse does not charge you to purchase their own Canadian Money Market Fund (TDB164).
> However, after the 0.75% MER is applied, you're return is almost nil. (i.e. 0.42%)
> 
> ...


Is that 0.42% per month or per year..? And do they pay monthly? Does the high interest savings account fund pay monthly? I may just let it build to $3000 or so anyways as it's always nice having cash on hand when the stock market corrects.

Just trying to figure out the best place to let the cash accumulate in the meantime (money markets, etc...)


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## Spidey (May 11, 2009)

The money market fund return is so low that you may as well just leave the cash sitting there. I'm in a similar situation with dividends, so since almost all my dividends come from Canadian equities, I pick a fund that I consider reasonably uncorrelated - the NASDQ-e fund. It's worked out pretty well. If you must have a fixed-income fund, I would consider the TD Short term bond fund or perhaps the bond fund -e. You can withdraw your funds, without penalty, after 3 months from the deposit.


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## fatcat (Nov 11, 2009)

open an account at ally bank
you can link it to your checking account and get 1.8% cdic insured
otherwise i'd get the td hisa which pays 1.25%

why not roll it into a td e-series etf which you can buy commission free and reinvest the proceeds of that for free ?
put the e-series into your tifsa


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## Soils4Peace (Mar 14, 2010)

You can buy TD e-series mutual funds. There is no commission. The MER is in the range of ETFs (~0.3% to 0.5%). The minimum purchase is $100. You can look them up. They are TDB900 thru TDB911. And they will give you good diversification until you have more money to invest.


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