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

CIBC Market Linked GIC - Guaranteed Returns, Higher Potential Growth - But Read the Fine Print

CIBC is offering you a chance to be a pig in shining armour with their Market-Linked GICs!

Let's break down the graphic for you. Pigs want more, more, more ...let's say it applies to investment earnings too.  But they are scaredy pigs so they need protection like the armour (i.e., guaranteed principal).

CIBC's says Market-Linked GICs offer these key benefits:

• Higher return potential than regular GICs based on the
performance of Canadian or global market indices
• Your principal is fully protected
• Choice of 3- or 5-year terms (35 or 59 months for
CIBC Stock Market Advantage RRSP GIC)
• Low minimum investment of only $500
• Available as CIBC RRSP and non-registered investments
• Diversification in one easy step

They come in  few flavours depending on whether you want a minimum return: Guaranteed Market Return - Guaranteed repayment of your principal at maturity along with annual interest payments.

Whether you want more upside: Market Return - Guaranteed repayment of your principal at maturity with the potential to benefit from any gains in the underlying index.  

Or something else: Monthly Income Fund-Linked  Guaranteed repayment of your principal at maturity along with a potential return linked to the quarterly performance of the Class A units of the CIBC Monthly Income Fund.

These may be of interest to short term investors as a replacement to meagre GIC interest rates at the bank (especially with the recent cut in Bank of Canada and likely savings rates).  But its not a replacement for participating in the stock market : because participation rates are so low a long term investor would rather be in the market and ride out the ups and downs.  Read the fine print: even a participation rate of 90% - sounds great! - may only give you 45% of the returns at the end of the term, because your earnings are based on the average of the quarterly returns over 5 years.  Meaning if the market doubles in a steady trend upward +100%, the average over the term is only half of the end value, meaning +50% of which you get 90% of that, meaning only 45%.

Key disbenefits would be:

  • you are getting taxed as interest whereas the underlying holdings would give you a dividend that is more favourably taxed
  • long term investors are giving up more than half of the underlying returns with the participation rate based on average quarterly fund and index values

Bank of Canada Drops Rate 0.25%- one quarter point to 0.75% !!!

Borrowers rejoice!  The Bank of Canada (BoC) met today and decided to drop the overnight lending rate by a quarter percent to 0.75%.  So any existing variable rate mortgages that you hold now will be 0.25% less than they were yesterday.  Keep an eye for a notice in the mail from your lender advising of this rate change.

As you know, the overnight rate has not changed in over four years!  This announcement not given references to oil prices, the global economy, and weakening inflation.  Stay tuned for the next BoC meeting March 4, 2015.