Personal Finance

Where to put house funds from house sale

  • Last Updated:
  • Sep 20th, 2020 3:33 am
[OP]
Deal Addict
Mar 12, 2008
1627 posts
184 upvotes
Toronto

Where to put house funds from house sale

Hello all,

We sold our house before finding a new one so we will need to store the proceeds from the sale for a few months somewhere. id hate to have the large amount sitting getting .05% interest in some chequeing account.

would only be for 1-3 months max

any advice/suggestions?
8 replies
Deal Addict
Jan 2, 2015
1533 posts
528 upvotes
Toronto, ON
redzone wrote: Hello all,

We sold our house before finding a new one so we will need to store the proceeds from the sale for a few months somewhere. id hate to have the large amount sitting getting .05% interest in some chequeing account.

would only be for 1-3 months max

any advice/suggestions?
EQ Bank has the highest consistent interest rates, but I heard Tangerine currently has the highest rates for new savings accounts.
[OP]
Deal Addict
Mar 12, 2008
1627 posts
184 upvotes
Toronto
eq has a cap on account size though.

will check tangerine too
Newbie
Aug 18, 2009
14 posts
3 upvotes
Ottawa
redzone wrote: eq has a cap on account size though.

will check tangerine too
Correct, $200k per account but $500k for a GIC, they have a 3 months GIC at 1.8%.
Newbie
Apr 13, 2019
29 posts
30 upvotes
redzone wrote: Hello all,

We sold our house before finding a new one so we will need to store the proceeds from the sale for a few months somewhere. id hate to have the large amount sitting getting .05% interest in some chequeing account.

would only be for 1-3 months max

any advice/suggestions?
My suggestion would be don't worry about where your money is.

Let's say you leave it for the full three months. Let's say you get 1.5% interest, which would mean shifting the money to one of the most generous HISAs. Let's say you have $500,000.

Three months of interest on those terms is $1,875. BUT ...
You have to pay tax on that amount. And you won't get the full three months; you need to allow time to apply and get the new account opened. Plus it might not even be three months -- it might be one month. Which would be $625 in interest -- before taxes.

If you're pretty sure it's for such a short period of time, don't sweat it. Go for simplicity. You can direct the saved time and energy toward finding a new place.
Deal Fanatic
Dec 5, 2006
8297 posts
3751 upvotes
Markham
fireseeker wrote: My suggestion would be don't worry about where your money is.

Let's say you leave it for the full three months. Let's say you get 1.5% interest, which would mean shifting the money to one of the most generous HISAs. Let's say you have $500,000.

Three months of interest on those terms is $1,875. BUT ...
You have to pay tax on that amount. And you won't get the full three months; you need to allow time to apply and get the new account opened. Plus it might not even be three months -- it might be one month. Which would be $625 in interest -- before taxes.

If you're pretty sure it's for such a short period of time, don't sweat it. Go for simplicity. You can direct the saved time and energy toward finding a new place.
Might be OP house is worth 2 million;))

That could be easily 5000 different. That 5000 can do a lot things
Deal Addict
Dec 20, 2018
3611 posts
2869 upvotes
fireseeker wrote: My suggestion would be don't worry about where your money is.

Let's say you leave it for the full three months. Let's say you get 1.5% interest, which would mean shifting the money to one of the most generous HISAs. Let's say you have $500,000.

Three months of interest on those terms is $1,875. BUT ...
You have to pay tax on that amount. And you won't get the full three months; you need to allow time to apply and get the new account opened. Plus it might not even be three months -- it might be one month. Which would be $625 in interest -- before taxes.

If you're pretty sure it's for such a short period of time, don't sweat it. Go for simplicity. You can direct the saved time and energy toward finding a new place.
The tax argument makes no sense

Do you rather get $1800 and say 30% tax and end with net $1260

Or do nth and pay no tax and net $0?

And if OP has a house, most likely worth more than $500k, more like 2-3x that or more
Jr. Member
Jun 6, 2014
194 posts
65 upvotes
Toronto, ON
StatsGuy wrote: The tax argument makes no sense

Do you rather get $1800 and say 30% tax and end with net $1260

Or do nth and pay no tax and net $0?

And if OP has a house, most likely worth more than $500k, more like 2-3x that or more
fireseeker has a point. It would be more that the money is locked in a GIC. It would affect the closing date for the new house. If you have a more flexible closing date, you can negotiate a bit more. And if you're renting a place to live in the interim, if you can close a month earlier, you'd net even between interest and rent.

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