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How much do you know about financial independence?

Dec. 15, 2022, 7:37 a.m.
Posts: 505
Joined: June 17, 2016

Posted by: heckler

Have you investigated the interest rate being offered on your savings lately?

I found my big blue canuck bank "Smart Saver" account kept offering a paltry 0.5%, but they stopped offering it to new clients, instead created a new "Savings Amplifier" account which offered a whooping 1.6%. So, if you were a lazy banker and just kept your "Smart" money where it was, they didn't have to increase your interest rate, whilst happily increasing your mortgage rates!

I have a name for them that rhymes with "duckers".

I dug deeper, and the investment arm of the same bank also offers a 3.65% "High Interest Savings" account that sells like a mutual fund (today offering 3.9%, where the Savings Amplifier is at 1.8% and the good old Smart is 0.8%!).

Lesson learned - shop around and move around, even if it's within your own bank. They will duck you over for any penny of interest if you let them.

Quack.

All the banks have their own version of these HISA "mutual funds" that you can buy through their brokerage.

If you use an independent brokerage you can also buy HISA ETFs with even higher interest rates: https://www.pwlcapital.com/high-interest-savings-account-etfs/

I've never used them. We use EQ Bank for our cash buffers, they consistently have a reasonable interest rate (2.5% currently) although never the highest but their HISA is convenient because you directly pay bills from it etc.

We also both hold the minimum chequing account balance to waive fees at TD so that's pretty inefficient at todays interest rates but again convenience is worth something.

The good thing about the big banks screwing their loyal customers over with interest rates on their cash savings is the profits flow through to the shareholders in the form of dividends. The big 5 banks make up ~20% of VCN.


 Last edited by: niels@nsmb.com on Dec. 15, 2022, 7:51 a.m., edited 1 time in total.
Dec. 15, 2022, 7:46 a.m.
Posts: 1677
Joined: Sept. 10, 2012

Posted by: niels@nsmb.com

The good thing about the big banks screwing their loyal customers over with interest rates on their cash savings is the profits flow through to the shareholders in the form of dividends. The big 5 banks make up ~20% of VCN.

Ha! I feel bad, but every time I hear about big banks gouging their customers I think about the next fat dividend I'll get from my bank stocks.

Dec. 15, 2022, 8:14 a.m.
Posts: 18444
Joined: Oct. 28, 2003

I looked at HISA ETFs like CASH but they would cost me at $9.95 commission unless I set up yet another trading account.  Neither is gonna happen.

Dec. 15, 2022, 9:12 a.m.
Posts: 346
Joined: March 14, 2017

Posted by: Vikb

Posted by: niels@nsmb.com

The good thing about the big banks screwing their loyal customers over with interest rates on their cash savings is the profits flow through to the shareholders in the form of dividends. The big 5 banks make up ~20% of VCN.

Ha! I feel bad, but every time I hear about big banks gouging their customers I think about the next fat dividend I'll get from my bank stocks.

tou.to and Gear Energy are close to 10% divy right now.  Great returns in the O & G.

Dec. 15, 2022, 9:21 a.m.
Posts: 505
Joined: June 17, 2016

Bottom line I don't worry too much about 1% more or less on the little cash I hold. In the big picture it's insignificant.

I think once you have >90% optimized your finances, that last 10% there is a rapidly diminishing return on time invested and you need to weigh against the value simplicity has to you. Everyone will have slightly different thresholds but for me I'm OK with some leakage in exchange for minimizing the time I spend on managing my finances.


 Last edited by: niels@nsmb.com on Dec. 15, 2022, 3:44 p.m., edited 1 time in total.
Dec. 15, 2022, 10:14 a.m.
Posts: 1677
Joined: Sept. 10, 2012

Posted by: LoamtoHome

tou.to and Gear Energy are close to 10% divy right now.  Great returns in the O & G.

Although I enjoy it when my quarterly dividends hit my brokerage account [only ~3 more weeks!] I don't hunt for high dividend yields in particular. I'm a boring total return index fund investor. It's a snooze-fest, but it's a dead simple and effective strategy over the long haul.

Dec. 15, 2022, 10:38 a.m.
Posts: 2594
Joined: Nov. 23, 2002

Another great deal right now is HYLD returning 13.5% and it's paid monthly. Hamilton has a number of ETFs that are worth a look.

Dec. 16, 2022, 10:11 a.m.
Posts: 346
Joined: March 14, 2017

Posted by: Vikb

Posted by: LoamtoHome

tou.to and Gear Energy are close to 10% divy right now.  Great returns in the O & G.

Although I enjoy it when my quarterly dividends hit my brokerage account [only ~3 more weeks!] I don't hunt for high dividend yields in particular. I'm a boring total return index fund investor. It's a snooze-fest, but it's a dead simple and effective strategy over the long haul.

I just do it with my "fun" money.  Most of the $ is in boring MF's.

Dec. 16, 2022, 11:34 a.m.
Posts: 15632
Joined: Nov. 20, 2002

Posted by: niels@nsmb.com

Bottom line I don't worry too much about 1% more or less on the little cash I hold. In the big picture it's insignificant.

I think once you have >90% optimized your finances, that last 10% there is a rapidly diminishing return on time invested and you need to weigh against the value simplicity has to you. Everyone will have slightly different thresholds but for me I'm OK with some leakage in exchange for minimizing the time I spend on managing my finances.

Exactly ^^ IME the main thing is that you did SOMETHING and you have or will have $ when you need it cuz alot of people out there do not

Jan. 8, 2023, 5:45 p.m.
Posts: 505
Joined: June 17, 2016

This popped up in my youtube feed today. I remember seeing this guy in Sedona maybe 11 or 12 years ago and recognizing him from a magazine article. Looks like he's still going at it in his 15th year of retirement: http://runutsadventures.com/

https://www.youtube.com/watch?v=BrhrGvHyVLI

Jan. 12, 2023, 3:01 p.m.
Posts: 1748
Joined: July 11, 2014

PSA (TSX ETF) is another decent option for cash you don't want to take any risk on. Similar to others the AUM are just cash deposits at big Canadian banks where Purpose has negotiated higher HISA rates than you get at retail due to scale. As long as you are moving decent chunks of money in/out the $6.95/tx fees don't matter too much.

Jan. 12, 2023, 5:04 p.m.
Posts: 18444
Joined: Oct. 28, 2003

Posted by: grambo

PSA (TSX ETF) is another decent option for cash you don't want to take any risk on. Similar to others the AUM are just cash deposits at big Canadian banks where Purpose has negotiated higher HISA rates than you get at retail due to scale. As long as you are moving decent chunks of money in/out the $6.95/tx fees don't matter too much.

Nice rate (4.59% today), that's for sure, but my $9.95 fee to buy ETFs that aren't on the "free to trade ETFs" list kills any ETF for my cash. Not worth it, compared to my 4.10% today with my HISA BMT104 that I've already made 4 no charge transactions with since November.

I do like the diversification from PSA though - 4 banks instead of 1.

Top 10 Investments (October 31, 2022)

National Bank Cash Account 40.0%

Scotiabank Cash Account 28.2%

CIBC High Interest Savings Account 20.0%

Bank of Montreal Cash Account 11.8%


 Last edited by: heckler on Jan. 12, 2023, 5:09 p.m., edited 2 times in total.

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