Better "bang for our buck"

[nadiabreckon]

I hope somebody can help me with this...

We have a savings account that we needed to open in order to have a joint account, and have quite a bit of money in it already. The thing is, this account doesn't have much return for us, and it's costing us more to make 1 transaction per month than we are getting in interest (ie, last month it cost us 60cents to transfer money to my MIL, and we got 40cents interest on 5K, so we lost 20cents in order to keep 5000$+ in there, pretty sad, eh?! )

Anyway, I'm wondering what kind of account we should put our money in in order to get more "bang for our bucks" as the title mentions... DH deals with HSBC (which is where the joint account is) and I deal with CIBC, and we don't want to have to go to another bank in order to get this done.

Suggestions?

[kduever]

If you don't want to change banks, I suggest you talk to your bank. Perhaps they can put you into a different type of account that better suits your needs.

If that's not possible, you could go with something that is entirely online such as Solutions Banking (London Life) or ING Direct.

[DaniDeals]

I agree going with ING is great...the interest you earn is much higher than the standard bank interest rate...regular bank interest rates are around 0.05 to 0.25. you might be able to open a GIA (guaranteed investment account) at your current bank the rate at my bank for that type of account is 0.75 on balances $5k and greater...still not that great. At ING their ISA (investment savings account) rate is 1.20%...you can access your money any time and are only charged a fee if you use your bank card to take money out (I think it's $1.50...you can transfer to and from your accounts(even between financial institutions online for free).The interest you would earn on this account would be between $4-5 per month . ING also has a TFSA (tax free savings account which you can deposit up to $5k per year tax free...the rate on that account is 3.00% - pretty good rate (again you can access the money any time). Online transfers between banks usually take a couple of business days though.

Maybe switching is your best bet??? Hope that helps a little...

[lalita1985]

I'm personally a fan of the GIC and at most financial institutions when you are putting a large amount of money in a GIC you can access that money at anytime. It's only when you put small amounts in (under 5k) that it gets locked in.

[brunt]

We have our main accounts at Scotia. PowerChequing account (http://www.scotiabank.com/cda/conten..._LIDen,00.html) has no fee if you have more than $3,500 in it and it includes 15 transactions per month.

We also have an ING account for the savings. All savings accounts have pretty pitiful returns on them right now. One of many reasons I suggest that people just pay down their mortgage instead - after having a 3 months savings cushion of course.

[ashedfc]

Longer duration instruments will offer higher rates. You can still have access your money. Like 4.1% for a 10yr GIC in Canadian dollar. Have a look at RRB (Real Return Bond where the returns increases with inflation).
Talk to your existing banker, they should be able to guide you.

[travelgeek]

If you have 5K to spare, the best value account at the moment is the select service account at TD. Yes it doesn't pay any interest, but in exchange you get unlimited transactions, a free primary/supplementary *premium* credit card, free safety deposit box, free US borderless service which includes a free US credit card.

If you choose the Gold Elite as the free premium credit card, it includes a deluxe auto club membership, which is worth at least $100 right away since you wouldn't have to subscribe to CAA. The safe deposit box is worth $40. So if you use these services, you will get more value than the lost interest (which you have to pay tax on anyways).

on the 'other' message board, this account is highly touted.

[nadiabreckon]

We have our main accounts at Scotia. PowerChequing account (http://www.scotiabank.com/cda/conten..._LIDen,00.html) has no fee if you have more than $3,500 in it and it includes 15 transactions per month.

We also have an ING account for the savings. All savings accounts have pretty pitiful returns on them right now. One of many reasons I suggest that people just pay down their mortgage instead - after having a 3 months savings cushion of course.

Well, we would pay down our mortgage with some, if we had one...lol

We are still on the fence of what to do, and haven't been able to get to the bank to talk it over with them since hubby works "bankers hours" being in the military... But we're hoping to get in there soon as it makes me upset not seeing anything come back to us....

[mpbabes]

hmmm...frst of all, I would talk to both banks (HSBC & CIBC) to find a better solution. You should be able to get some sort of account with no fee.

How...this savings account, how easily do you need to access it? putting it in a GIC would be better in terms of interest, but if you do need to get a hold of the cash but can stand to wait...2 days before getting it, then open an account with ING. I have one and I LOVE it. No fees...better interest...and since it's kinda like, outta sight, outta mind, it's a pleasant surprise each time I do go check it out....lol

I'm saving up for a coat so I'm sending over $50 a month just because I know I'll make more interest on it.

[super_e]

If you are comfortable with online banking, then I would suggest you surf your bank's website to see if they offer a High Interest eSavings/Online type account.

These accounts are only accessible through online banking or phone banking, not at the teller. If you pay bills or use the bank machine to withdraw money from these accounts, the fees are usually astronomical. What you can do for free is transfer money to and from your chequing account from these online accounts.


I know Royal Bank has it: http://www.rbcroyalbank.com/products...e-savings.html

And Scotiabank as well: http://www.scotiabank.com/cda/conten..._LIDen,00.html

I'm sure the other major banks have these types of accounts.

[ashedfc]

Whatever you choose - always diversify to reduce your risk.
Real Estate - you already have it (& I believe mortgage free)
Your employment income - (is the employer exposed to economic downturn)
Fixed Income instruments (GIC, Savings, etc) - Interest rates will go from here & how it will impact your total return. Ex, 2% interest is good when BOC interest rates are 0.25%, what happens when, BOC takes the rates to 4%, then a 2% GIC is the worst investment (maybe you can look at laddered GIC, or an RRB).
Equities & commodities - it depends on your personal risk tolerance.

[brunt]

This is actually a topic near and dear to my heart right now. My wife and I are very fortunate, and have done well for ourselves over the last 12 years. Before that was another story altogether, but sticking to the topic at hand...

I did a quick search of the major banks, and a couple of them offer 1% interest in their "high interest" accounts (an oxymoron if there ever was one). So, you give them $5,000 (for argument's sake) for a year. They give you $50. Good ole Revenue Canada takes $25. So I have to keep on top of the current interest rates (Scotia's high interest account that I used to have has had its "high" rate lowered to 0.2%), move my money around as required, and put the extra T3 on my income tax for a lousy $25.

My wife and I are now looking at some solid dividend paying stocks instead. It's not hard to get 3%, and with the way the tax laws are, you almost don't pay tax on that income (depending on the rest of your income). It's starting to look like a far better route to take.

[ashedfc]

This is actually a topic near and dear to my heart right now. My wife and I are very fortunate, and have done well for ourselves over the last 12 years. Before that was another story altogether, but sticking to the topic at hand...

I did a quick search of the major banks, and a couple of them offer 1% interest in their "high interest" accounts (an oxymoron if there ever was one). So, you give them $5,000 (for argument's sake) for a year. They give you $50. Good ole Revenue Canada takes $25. So I have to keep on top of the current interest rates (Scotia's high interest account that I used to have has had its "high" rate lowered to 0.2%), move my money around as required, and put the extra T3 on my income tax for a lousy $25.

My wife and I are now looking at some solid dividend paying stocks instead. It's not hard to get 3%, and with the way the tax laws are, you almost don't pay tax on that income (depending on the rest of your income). It's starting to look like a far better route to take.

If you are thinking of stocks than look at VXX-NYSE (its the volatility index, it goes up when the markets go down, you can buy it with a trailing stop & when it reverses it will close the position automatically protecting your profits). Dividends can be painful -example C-NYSE Citigroup world's largest bank in 2007 became 0.99 cents in 2009, & even today its 90% below its 2007 value. Just dividend is not enough, capital appreciation is also necessary.

[awongtse]

its the volatility index, it goes up when the markets go down, you can buy it with a trailing stop & when it reverses it will close the position automatically protecting your profits

I'm not investment-savvy enough to understand that sentence!!

Can someone explain? What is a "trailing stop"?

[ashedfc]

I'm not investment-savvy enough to understand that sentence!!

Can someone explain? What is a "trailing stop"?

Your trading desk should be able to explain you, each ones have a different set-up for trailing stops. This is a way in which you can protect your profits.