I am very annoyed with TD and their portfolio size discrimination. I have less than $50,000 so all my trades with TD Waterhouse are $29 instead of the discounted $9.99 that people with $50,000 get. I closed my TD run RRSP (registered retirement savings plan) mutual fund and moved that money in to my TD RRSP savings account in hopes of moving it to Questrade. Questrade has low cost trades for everyone and all you need is $1,000 to open an account.
I want to put more money in to a Vanguard ETF (exchange traded fund) and I wanted to save myself the overpriced TD fee and move my RRSP money from the TD RRSP savings account to Questrade but TD charges $135 to transfer RRSPs to other financial institutions. With only $4040 to move the $135 transfer fee could eat up the entire first year or more of gains I would make buying the Vanguard ETF shares at Questrade. Of course there is a tax penalty for withdrawing the money so that was out of the question. I was very tempted to just give up and pay the $29 TD trading fee and buy the shares inside a TD RRSP but I am angry that they will not give me the discount fee so instead I bought a TD Market Value GIC.
TD still gets to keep my money but I am not going to pay any fees. There is no fee for purchasing a GIC (guaranteed investment certificate). GICs are guaranteed by CDIC, the Canadian Deposit Insurance Corporation, so I am guaranteed that the money I invest will not be lost. I don’t have much money and I have less than a decade to save for retirement so guaranteeing my principal is a sensible decision even if it means a lower return on investment.
I could have played it safe and gone with a 5 year 2.3% return. No chance at losing my money but not much chance of travelling to Hawaii during retirement on that very small return. Instead I have decided to take a chance and buy a Market Growth GIC. ( http://www.tdcanadatrust.com/products-services/investing/gics-term-deposits/GICTable_c.jsp?s_tnt=161953:2:0 )
I am investing in the stock market but not risking my principal. The downside is that, while the principle is guaranteed, the rate of return is not. I could invest for 5 years and come out with my principal and nothing more. If markets tank I will have earned nothing. It is taking a real chance with my funds with no way out because the money is locked in for 5 years.
I have narrowed it down to these choices:
: Security Plus GIC – minimum return is 5%. Maximum return is 20%. This is the safest option because it is the only Market Value GIC that guarantees a return for my investment but the guaranteed amount is not much better than a savings account and I can’t change my mind once I buy the GIC.
: Financials GIC Plus – maximum return is 25% and the money is invested in major Canadian financial institutions. There is no minimum guarantee for a return but it seems to me that banks charge fees for everything and their stocks never seem to go down so this could be a good investment.
: Utilities GIC plus – maximum return is 25% but there is no minimum return on this one either. Utilities should be a part of everyone’s portfolio but they are not yet part of mine.
And the winner is the Utilities GIC Plus.
I am not prepared to take the guaranteed lower rate of the Security Plus GIC. Why take a chance on earning 20% when you can earn 25% with the other 2 GICs.
I decided to pass on the Financial GIC Plus because I am going to be buying more of the Vanguard high dividend ETF TSX code VDY in the next few years (inside an RRSP at Questrade – no more of my money for you TD Canada Trust Waterhouse) and it is invested in a lot of financial institutions as well as utilities. If I go with the Financial GIC then I would have the bulk of my money invested in financial institutions and I am a believer of the old saying don’t keep all your eggs in 1 basket.
Utilities supply energy and there is a constant demand for that. Until someone starts selling shares in the world’s supply of water energy might be a top investment. $4,040 of retirement funds locked up for 5 years in hopes of earning a 25% return in a TD Canada Trust Market Growth Utilities GIC Plus. Fingers crossed everyone. I can’t afford an investment misstep.
Volusia County is somewhere in Florida and 1 of their road signs is the exact same as the amount of money that I had to invest in retirement today.
My debt as of Saturday September 28, 2013 is still $12,761.