There’s a corner of Canada where the penny is still in use.
Pennies were phased out of circulation in Canada back in 2013, in part because they’re all but valueless in today’s world. But for children with the Leo Young Savers account from Royal Bank of Canada, interest has been doled out in amounts as small as one cent.
I recently asked readers for input on the best bank accounts for children and got a bunch of replies that I will share in a moment. For now, check out this statement sent by a friend and Ottawa mom of a 10-year old with a Leo account.
This statement is from 2022, when interest rates were lower than they are now. Has RBC upped the interest rate? I spent some time mining the RBC website for details on how much interest the Leo account pays and came up empty. What I can tell you is that the Leo account shown above generated 12 cents in interest for all of last year, even as rates pusher higher and higher.
“For a while, we got statements in the mail,” the mom whose son owns this account said in an e-mail. “Imagine – more money to print and send than a penny is worth.”
A children’s account that looked reasonable to me was the one offered by the online bank Tangerine. Readers also singled out Tangerine, which pays 1.1 per cent interest, and Desjardins, which offers a $10-a-year lump sum Youth Dividend to members aged 5 to 17 who meet eligibility criteria and make seven or more deposits to their account in a year. Desjardins is a Quebec-based credit union that operates nationally.
Two other names that came up a few times: Meridian Credit Union in Ontario and Steinbach Credit Union in Manitoba. Credit unions seem to get it on children’s accounts, at least more than banks do.
Subscribe to Carrick on Money
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob’s personal finance reading list
Do this with your tax refund
Five good reasons to use your tax refund to pay down debt. Almost two thirds of tax filers are getting a refund this year.
Travel rewards for everyday people
RewardsCanada has started a new Everyday Value series looking at how to use travel rewards for economy class flights, lower- to mid-level hotels, cashback and merchandise, which account for 90 per cent of points redemptions. The other 10 per cent for is for business- or first-class flights and top hotels. The first instalment highlights a hotel points program that offers strong value.
A DIY investing cautionary story
All about a court ruling against a DIY investor who unsuccessfully sued his online broker after selling more shares than he actually owned in his account. The court found that the investor should have been better informed about developments with the shares he owned.
Should you own international stocks?
I wondered about this when putting together the fourth instalment of the 2023 Globe and Mail ETF Buyers’ Guide, which covers exchange-traded funds holding stocks traded in markets outside North America. I think investors should have some international exposure, as does Mark Seed of the My Own Advisor blog.
Q: You recently wrote a piece about wills. Most often, executors are family members or close friends. The settlement process can be messy and time-consuming for the executor. Are there fee-based, trustworthy options out there like financial institutions that can act as an executor?
A: For sure. As noted in a column I wrote a few years back, the big banks have trust company arms that do this kind of work.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
A calculator for comparing the cost of a vehicle loan versus a lease.
The money-free zone
Check out this cover of Walk Away Renee by folkie Jimmy LaFave. The song was a 1967 hit for the Four Tops, but originally recorded by a band called The Left Banke. One of the great sad breakup songs.
Meet Humphrey Yang, chosen by a U.S. investing website as the top online influencer on investing and personal finance. He’s American, but a lot of what he says is of wide interest. He’s a great communicator.
From the Twitterverse
The cost of being late for a meeting is bigger than you think.
What I’ve been writing about
- Does owning a home give you a retirement advantage over lifetime renters?
- CIBC walks back mishandled letter to clients holding GICs
- Why dividend growth investors may want to pass on ETFs
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners – and opportunity for house hunters • Why more Canadians are choosing to be child-free or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You’re not bad at money – you’re suffering from money shame • Retirement might look different for Gen Z and millennials. Here’s how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn’t special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home down payment in Canada’s big cities • Property taxes are popping in some cities – how worried should you be about other tax hikes? • Our other real-estate problem – people have too much wealth tied up in houses • Borrowers and savers, here’s how to time the eventual rollback of interest rates
- 📈 Investing: Canada's top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer's guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle