E*Trade Canada has announced that it will be offering an online high-interest savings account offering 4.15% for Canadian dollar accounts and 4.75% for U.S. dollar accounts. The accounts can be used to park cash temporarily from an investment account instead of buying a money market fund. E*Trade’s interest rate is one of the best around and handily beats ING Direct’s current rate of 3.5% and even PC Financial’s highest rate of 4.0%. However, it looks like cash in a self-directed RRSP cannot be parked in the savings account.
It is hard for me to get excited about this new account because I rarely have a lot of cash sitting in a taxable account (I use free cash to pre-pay our mortgage). Also, TD Waterhouse is still my first choice for our RRSPs because it offers the ability to wash U.S. dollar trades and E*Trade, to my best knowledge, still doesn’t.
FD: I own shares in E*Trade (ET)
Note: Don’t forget to enter your name in the second anniversary giveaway, if you haven’t done so already. There are two books up for grabs and your chances of winning are excellent.
Bookmark: del.icio.us Digg StumbleUpon
5 responses so far ↓
1 Eric // Nov 23, 2006 at 10:33 am
I’ve looked at number of the discount brokerages, and although the trading costs can be low, they often have a $100 or more fee for transfering money from a bank. In fact all the fees, except for trading, are on the high side. I’m also not sure if any cash parked in that account would be protected by CDIC.
As such, I’ve decided to stick with CIBC’s investor’s edge. Not because I think its the best, but most of my other banking is through CIBC and the nuisance of changing to somewhere else is greater than the shortcomings of the service. (ps. no charge for transfers)
2 StingyJoe // Nov 23, 2006 at 11:23 am
I believe that all cash in your investing account with a brokerage is covered under CIPF (up to $1million).
The only downside of ETRADE that I can see is that they charge $19.99/trade unless you have $50k in assets. The brokerage that I like the best is Interactive Brokers. $2CAD/trade for Canadian stocks, and $1USD/trade for US Stocks. IB also has competitive cash balance interest also, however, they require a HIGH balance before they start paying interest.
Joe
http://www.StingyFinance.com
3 Canadian Money Blogs Reviewer // Nov 23, 2006 at 2:11 pm
another interesting fact that E*Trade just announced is that they can give you a SecureId gizmo to login. I think it’s a great way to prevent illegal access to your account which could have disastrous consequences …
——–
btw: if you want to give me feedback on my new blog, I would be grateful if you visited:
http://www.canadianmoneyblogs.com/
4 Wayne // Nov 24, 2006 at 10:39 pm
I use TD waterhouse, and there is no fee to transfer money between TDW and PCF accounts. For just 0.15% more I will stick to TDW.
5 E*Trades Cash Optimizer Investment Account :: Newstack // Dec 7, 2006 at 11:27 am
[...] Read more: here [...]
Leave a Comment