Just wanted to quickly update you in a new post to point out changes to the old posts, namely the HISA (high interest savings account) post and the Questrade USD Transfer post.
Extra Interest, say what?
Canadian Tire bank has recently unveiled a limited-time bonus interest rate incentive on two of its personal banking services (you get an extra 1%).
April (a Y&T.ca reader) wanted me to let you guys know about this new promotion going on a Canadian Tire bank:
The Canadian Tire High Interest Savings account and the Canadian Tire Tax Free High Interest Savings account are perfect for people who are looking for the flexibility of earning interest on their savings, with no monthly fees, no lock-in period and 24/7 online banking. For the first 90 days from when money is deposited into a new account, customers will earn a special interest rate of 2.50% (if the account is a Canadian Tire High Interest Savings Account) or 3.50% (if the account is a Canadian Tire Tax Free High Interest Savings Account).
After the 90 day period, the extra 1% they gave you won’t be applicable anymore (so it will go back to 2.5% for a HISA TFSA and 1.5% interest earned for a regular HISA).
Just remember not to over-contribute to the TFSA (e.g. don’t withdraw and think you can put it back in immediately) like the 70,000 other Canadians that accidentally did this year.
Questrade USD Transfers:
A reader and subscriber (thanks for writing to me!) wrote to me about her experience with the USD Transfer with Questrade. I also had the same experience, but the amount I transferred was quite small, though I was still peeved about it. Looks like we shared the same issue. She had started up a registered account (just like I did) and had specified the currency preference to Canadian dollars (because who wouldn’t, it IS an RRSP/TFSA after all). She then proceeded to transfer the USD as a pre-authorized deposit. Then, checking to see how the deposit went, it turns out that the USD was automatically converted back to CAD dollars at the end of the day.
The same thing happened to me. I was befuddled. It didn’t make sense that the reason someone WOULD transfer USD to a trading account is to avoid the currency conversion, but they screwed that up by transferring your money back into CAD, hence you the investor, will have to pay the currency conversion twice. Which sucks big time- can you say OUCH? The thing is, they don’t have a pop up box that warns you or cues you to tell you your money will be transferred back to Canadian dollars at the end of the day.
The lesson learned here is that you need to set your currency preference to NEUTRAL when you first register for your account (and if you don’t know how to do this, ask! They are pretty accessible by their online chat option or by phone) to avoid the currency hits!
It is pretty awesome that Questrade allows you to trade with USD (I believe the only registered account in Canada that lets you hold foreign currency) but you just need to make sure it’s not converted back to Canadian money, which beats the point of wanting a USD registered account in the first place.
Happy Trading and Saving, guys!
Readers, any other mishaps like this happen to you?
Great post. I use Questrade as well and have been know to chat with their support staff quite often over currency exchanges. I found that i simply put my deposit in CAD and then permanently changed it to USD as to avoid the need for currency exchanging.
As for the bank account–I would not touch Canadian Tire bank with a ten foot pole. I have played the savings account game, always looking for the best rate–until I find the bank that always gives it.
I wrote about the bank on my blog http://www.dividenddollar.com/saving/2-bank-accounts-you-need/ but if you just want to know the bank, it is Peoples Trust. They give the highest standard savings rate. 2.5% from Canadian Tire looks good but if it is only for 90 days I would rather just earn 2.1 knowing that it will higher then any other bank.
@Dd- yeah, I know. I wasn’t trying to promote Canadian Tire in any way, just being the messenger for their new promotion. Weird that merchants are getting into the banking business, eh? Canadian Tire, now Walmart (with their credit card). I don’t think I would use Canadian Tire myself. I’m not much of a “best savings rate” type of person either. If you think about it, an extra 1% on $5000 is around $50 in a TFSA. I’d rather stick to something I know and works for me (easy to transfer in and out etc). I hear People’s Trust is quite popular for high savings rates too. Thanks for the link.
I looked into the USD currency thing as well because I wanted to buy ATVI in USD in my RRSP account at Questrade. I researched it a fair bit before doing so and discovered the very same thing. People were getting hit with currency conversion fees left and right through automatic currency conversion.
I think I was able to find the right option like you mention here to avoid extra conversion fees before I did the transaction. I guess I got lucky on that one because, as you say, it wasn’t very intuitive! Definitely a good thing to make people aware of. I hope they make it more intuitive in the future.
@SavingMentor- cool, I have ATVI too. Did you end up buying it? Yeah, its something to be wary about. Hopefully they make it more intuitive and at least warn you. Perhaps if we all collectively write in to Questrade, maybe things will get moving and shaking?
@Saving Mentor- but the point is to get USD into the account that you have converted previously at a better currency rate, in order to not be hit by conversion fees during periods when the Canadian dollar is weak against the USD, right?
[...] http://www.youngandthrifty.ca: Talks about Questrade (the same broker I use) and ways to make USD Deposits. [...]
[...] youngandthrifty.ca warns about transferring US dollars into a Questrade RRSP [...]
I saw the recent Financial Post article on “Young bloggers spread the word on money management” and I want to congratulate you, As an elected MLA, I have been trying to promote more “financial literacy” programs in Alberta schools and other places. Unfortunately the schools do not provide enough time in their curricula for the essentials of financial management which is something that is so important throughout your life, particularly in your early years right out of school when you get that first credit card.
Keep up the good work – you are providing a great service to assist your peers.
@Ken Allred- Thank you very much, Ken! It means a lot coming from an MLA. I learned something from that article too- I didn’t know that BC had financial literacy in high schools now. I unfortunately graduated before that came into effect, but they say the best learning is done via trial and error and via your own experiences