LF: Best U.S. Account

[ghettogal]

I have a few thousand dollars in U.S. dollars and was wondering what account is best to let it just sit there and collect interest. I don't want to transfer them back into cdn until their dollar goes back up. I have a td account right now and the interest is next to nothing. I wouldn't mind purchasing gic and havin' it locked up for awhile. I don't see myself using it anyways. Please let me know which bank could give me the best interest rate. Thanks!

[Lyrrad0]

The problem with USD in Canadian banks is that it's not covered by CDIC, so you have to be careful what bank you invest it in.

ICICI offers 2.5%, but some people on this board don't like them.

Since you're with TD, the easiest thing to do would be to open a TD Waterhouse account, and purchase a USD Money Market account. (No fees if you subscribe to eServices). For example, the RBC Money market fund (RBF261) is currently yielding 2.204%. That seems to be the best mutual fund available for USD for amounts less than $100K. (Someone post if there's a better one available). I assume that TD Waterhouse will also allow you to buy USD term deposits, but I'm unsure what their rates are now.

[HammerRFDer]

Or you could buy US stocks, or even a Canadian stock that is traded in US$ (most of the bigger ones are listed on both the NYSE and TSX). The Canadian banks are cheap these days, and the dividend should still be eligible for tax credits.

Though keep in mind, if the stock is mainly held by Canadians, it would likely rise and fall with the strength of the Canadian currency. However, companies like RIMM, though Canadian, will not be as impacted by changes in Canadian currency valuations, since they're mostly US-owned. (My guess anyways)

[ber0]

ING offers short term (90 days for 2%) and long term (1yr for 2.65%, 5 yrs for 3.75%) US GIC accounts... check their rate at:

http://www.ingdirect.ca/en/accounts-...alenusdgic.jsp

However, I believe you need to have an account with them to be able to have those kind of US$ GICs (you need to login and then choose from the open menu US GIC account)... I don't know why they don't market it on their main website like their CDN GIC and savings accounts or their US savings accounts.

[bonzo]

The problem with USD in Canadian banks is that it's not covered by CDIC, so you have to be careful what bank you invest it in.

ICICI offers 2.5%, but some people on this board don't like them.

Since you're with TD, the easiest thing to do would be to open a TD Waterhouse account, and purchase a USD Money Market account. (No fees if you subscribe to eServices). For example, the RBC Money market fund (RBF261) is currently yielding 2.204%. That seems to be the best mutual fund available for USD for amounts less than $100K. (Someone post if there's a better one available). I assume that TD Waterhouse will also allow you to buy USD term deposits, but I'm unsure what their rates are now.

Thank you for posting the RBC US money market (RBF261) I have been looking for a better paying US money market than TD's.

Do you know what the highest paying Cdn money market...is it Altamira?

[Fallschirmjagr]

Thank you for posting the RBC US money market (RBF261) I have been looking for a better paying US money market than TD's.

Do you know what the highest paying Cdn money market...is it Altamira?

Try PH US Money Market US$:


http://www.morningstar.ca/globalhome...sp?fundid=4960



But I agree with the above poster in regards to investing in Canadian Bank stocks listed in the NYSE(BMO has great valuations and a high dividend yield, RY is still RY) instead.


Dividend income from a canadian corporation beats interest income not only for the higher yield but for favorable taxation.



regards,

[Lyrrad0]

Try PH US Money Market US$:


http://www.morningstar.ca/globalhome...sp?fundid=4960

Looks like the minimum is $5000 for that fund, so it might not meet the initial poster's needs. Also, I don't see it available from TD Waterhouse (just the regular fund, Series B and F seem to be available there).

[Fallschirmjagr]

Looks like the minimum is $5000 for that fund, so it might not meet the initial poster's needs. Also, I don't see it available from TD Waterhouse (just the regular fund, Series B and F seem to be available there).

Try a search for PHN500. If it's available at RBC Direct Investing then I'm sure that TD Waterhouse would have it.


As for the min, forgive me, I equated "a few thousand" to five. It's a shame because that Money Market fund has a low MER(.6) and Fee(.5) with No Load.



regards,

[Lyrrad0]

Try a search for PHN500. If it's available at RBC Direct Investing then I'm sure that TD Waterhouse would have it.

I guess $5000 will be close to what the poster has. Strangely when I search for PHN500 in TDW, I get a fund with a current yield of 1.34%. That's why I thought it was different than the fund you indicated, since it looked like a better fund than the RBC one from the MorningStar page.

It appears that the PHN one has done better in the long run, over the past several years, but the RBC one has been doing better for the past few months.

[Fallschirmjagr]

I guess $5000 will be close to what the poster has. Strangely when I search for PHN500 in TDW, I get a fund with a current yield of 1.34%. That's why I thought it was different than the fund you indicated, since it looked like a better fund than the RBC one from the MorningStar page.

It appears that the PHN one has done better in the long run, over the past several years, but the RBC one has been doing better for the past few months.

Indeed.


But always consider the fees(MERs and Mgt). The good funds become even better funds when less is skimmed off your return(real).


In case some of you Mutual Fund investors didn't know yet, Morningstar.ca is highly recommended. Normally I don't recommend Mutual Funds considering that I haven't invested in Mutual Funds for over 15 years and I'm all invested in stocks but that site offers fabulous research material for canadian Mutual Funds.


On an ending note, Philip Hager & North(PH&N) is owned by RBC.


regards,

[Fallschirmjagr]

Forgot about this one:

Do you know what the highest paying Cdn money market...is it Altamira?

I'd say it's a tie between Altamira T Bill(AIS 928) and PH & N Canadian Money Market(PHN120).


Altamira: http://www.morningstar.ca/globalhome...sp?fundid=2670
PH&N: http://www.morningstar.ca/globalhome...sp?fundid=3814


But again, I'd recommend Canadian Bank stocks(in CAD) instead for dividend yields.


regards,

[s.m.c]

Try a search for PHN500. If it's available at RBC Direct Investing then I'm sure that TD Waterhouse would have it.

I was not able to purchase the PH&N $US MM fund through TDW when I tried a few months back. I purchased the RBC fund instead.

[Lyrrad0]

Of course, if you can, you could also open a Savings account at a US bank. Some banks are offering 3.50% and higher with FDIC insurance, but it's difficult for Canadians to get those rates. I'm finding for CAD that savings accounts usually offer comparable or better rates than Money Market funds unless you qualify for those premium MM funds (usually >$100K).

[ghettogal]

I do have 5000, i have about 7. I'm reading through the thread and I really don't understand any of the finance terms. I was thinking highest interest rate in GIC. If I sign up at TD Waterhouse or purchase PHN500, would that also mean that I could lose some money? I just want something that will build interest...don't want to take too much risk w/ the money.

[Lyrrad0]

I do have 5000, i have about 7. I'm reading through the thread and I really don't understand any of the finance terms. I was thinking highest interest rate in GIC. If I sign up at TD Waterhouse or purchase PHN500, would that also mean that I could lose some money? I just want something that will build interest...don't want to take too much risk w/ the money.

Well, money market funds are historically very safe. But, there are risks. I use them to store money in a safe place, but you should make the determination yourself. It is assumed that if a MM fund is about to lose money, the company sponsoring it will attempt to put some of their own money into the fund to avoid "breaking the buck" (having the unit value drop below $1 or the regular unit value of the fund).

With a USD GIC in Canada, it is guaranteed by the bank you are buying it from.

I personally used a USD MM fund when I wanted to have my money in a safe investment.