Parking RESP cash with high interests rates - Meridian Credit Union 1.75% RESP Savings Account

 As we are cashing in RESPs now and have to transition out of equity mutual funds due to shorter investment time horizon (Investor's Group rules) we need to find a good place to park money - Meridian's has a nice RESP savings rate of 1.75%.  You could consider this as the fruit of your loins (your kids) approach university age and you transition into something safe to preserve capital and earn a little to counter inflation.

Meridian has branches across Ontario - a new on here in the Beaches - they are promoting the credit union at the CNE this year.  Being Ontario chartered, deposits are protected through The Deposit Insurance Corporation of Ontario (DICO).  It insures Canadian currency deposits, including interest, to a maximum of $100,000  per customer. Unlike CDIC which has an insured limit, deposits held in RSP, RIF, LIRA , LIF, RESP, and TFSA accounts are fully insured with no maximum amount.   Unique trust or joint accounts are insured separately from those in your own name, to a maximum of $100,000 per account.

Sprott Private Credit Trust now Sprott-TEC Private Credit Fund - Steady Historical Returns, New Tax Structure

SPR & Co LP is a new operating company created assuming portfolio management of the Canadian diversified assets of Sprott Asset Management LP. Sprott Private Credit  Trust (SPCT) is also merging into Sprott Private Credit Trust II (SPCT II) with the combined fund renamed as Sprott-TEC Private Credit Fund.

With the changes, the new fund is no longer tax sheltered as the forward contract has ended - this means a capital gain for the unit holder in 2017. The merger FAQs indicate some of the reasons for the changes:

1) To simplify ownership structure for the relevant assets
2) To ensure unitholders’ tax liability in SPCT is in line with their economic benefit in the
same tax year.
3) To potentially lower annual fixed costs to unitholders of SPCT and SPCT II, as the merger
would increase assets under management in the remaining fund.

Returns on the trust have been steady (see example table below) and with the same sub-advisor can be expected to continue :

The following sums up how private lending decisions are made:

Investment Criteria for Private Credit Loans
VALUABLE ASSET COLLATERALSenior liens on self-liquidating working capital assets and critical business assets with realizable liquidation values
PROVEN BUSINESS MODELSound business strategy with visible product demand and capacity for cash flow generation to limit default risk
STRONG MANAGEMENTExperienced management teams committed to business and aligned through personal risk and ownership
STAKEHOLDER SUPPORTStrong customer, supplier, employee, junior creditor, and/or shareholder relationships
MULTIPLE EXITSWide range of deleveraging options not dependent on refinancing or collateral realization and liquidation

Fund details are available here. The fund is now open for new investments.

Refer a Friend $50 Bonus Tangerine - Orange Key 40132831S1

$50 Tangerine Bonus
Use Orange Key 40132831S1 to earn a $50 bonus!

From now until August 31st, open your first Tangerine Account using your Orange Key 40132831S1 with a deposit of $100 or more, you'll both get a $50 Bonus.

Click here to sign up.

IG Enhanced Client Statement

Investors Group is offering something new to quarterly statements - your rate of return !

Its called an enhanced Client Statement because rate of return was never there before, because it was not important ... I guess.

Statements now show, because the industry is not forced to show it, the 1 3 and 5 year rate of returns for those mutual funds you own and hold at IG.

Other enhancements include 'Book Cost' - the purchase price of an investment.

And the biggy - Deferred Sales Charges - investments that may be subject to a DSC are noted with an asterix now on the statement.

Bank of Canada drops overnight rate

The Bank of Canada dropped the overnight rate by 0.25% today.  Stay tuned to see what lenders will do - one lender has dropped their prime rate by 0.10%. The last BoC rate drop was in January 2015, and lenders dropped their prime rate by 0.15%, compared to the 0.25% BofC rate drop.

Your lender will usually send a notice in the mail advising of their actual prime rate change, if you hold a variable rate mortgage or line of credit.

Note - next Bank of Canda meeting is September 9, 2015.

Interactive Brokers Offers TFSA and RRSP / RSP Accounts

Looking for an alternative to Questrade?  Now RRSP and TFSA Accounts are available at Interactive Brokers

In response to the numerous requests received to offer tax advantaged accounts to Canadian clients, Interactive Brokers announced the availability of Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Accounts (TFSA). Both accounts offer tax-free accumulation of earnings, with taxes on contributions and earnings deferred until withdrawal in the case of the RSP and no tax on withdrawals of post-tax contributions and earnings from the TFSA.

Opening an account is simple and can be initiated from your existing account by logging into Account Management and selecting the Manage Account, Add or Link Accounts, and then Create Linked Account menu options. Once linked, your new RRSP and/or TFSA account will benefit from a shared user name, security device and market data subscriptions.  Yes you get that cool spy code card that Alan Turing invented in the Imitation Game so you can log on in privacy with encrypted codes!  Just kidding about that.

The minimum initial funding requirement for RRSP accounts is USD 10,000 and TFSA accounts USD 5,000 (or CAD equivalent).  Funding can be by cash deposit and/or securities transfer with funding instructions made available within the application.  RRSP accounts are subject to a quarterly maintenance fee of CAD 12.50, or $50 per year - if you hold low cost ETFs in the account and have a balance of $10,000 then the fee is only 0.5% on top of your MERs.  Note Questrade has no RRSP account fee.

Questions on opening and account? Contact our Canadian Client Service Center at (877) 745-4222 Toll free or (514) 847-3499 Direct dial.

Prime rate drops 0.15% to 2.85% - Best 5-year fixed Mortgage Rates

The big banks cut their prime lending rates by 0.15 of a percentage point to 2.85 per cent. This after The Bank of Canada cut the overnight rate by a 0.25% to 0.75%.

So a five-year fixed mortgage posted rate is 4.79 to 4.84 per cent at several big banks - most borrowers can negotiate and pay considerably less than these posted rates.  For even better 5 year fixed rates consider the following:

5-year rate

2.69%    CanWise Financial, No pre-approval, 20% Lump Sum Pre-payments

2.74%    Mortgage Alliance Company of Canada, No pre-approval, 20% Lump Sum Pre-pay

2.79%    Key Mortgage Partners Dominion Lending Centres, No pre-appr., 20% Lump Sum Pre-pay