-
Purpose High Interest Savings Fund (PSA $50.09)
-
RBC Investment Savings Account Series A (RBC) (RBF2010 $10.00)
-
Global X High Interest Savings ETF (CASH $50.06)
Q: Hi Team:
I have some cash sitting in RIF acct. Presently in RBF2010 paying 2.3% interest, with unlimited charge for buy or sells..
Would I be better to spent the $9.95 and buy into something like CASH or PSA? Then I would also have to pay $9.95 to get out.
As a follow-up to that question how about if this was in an 'open account' , Where the interest is taxed at 100% income whereas CASH or PSA would act like a dividend income and therefore taxed at roughly 66% income.
OR do you have a better suggestion for larger amounts of $$
Thank you. :-)
I have some cash sitting in RIF acct. Presently in RBF2010 paying 2.3% interest, with unlimited charge for buy or sells..
Would I be better to spent the $9.95 and buy into something like CASH or PSA? Then I would also have to pay $9.95 to get out.
As a follow-up to that question how about if this was in an 'open account' , Where the interest is taxed at 100% income whereas CASH or PSA would act like a dividend income and therefore taxed at roughly 66% income.
OR do you have a better suggestion for larger amounts of $$
Thank you. :-)
5i Research Answer:
Though they are ETFs and trade, both CASH and PSA distributions are taxed as interest and do not get a dividend tax credit. The either/or question largely depends on the amount of money involved. CASH has an indicated yield of 2.55% and is likely better, but for a small amount of money then the commissions will add up. But even at $100,000 then the net in/out cost would be 0.02% and CASH would still be better. PSA yields 2.43% today.