Deposit Brokers

A Deposit Broker is an independent financial professional who specializes in guaranteed investment products such as Guaranteed Investment Certificates, term deposits, Registered Retirement Savings Plans, Registered Retirement Income Funds and Life Income Funds.

Generally you pay no fees for their service, Deposit Brokers are paid a commission directly by the financial institution that issues the deposit.

Depositing funds
Deposit Brokers may accept only cheques payable to the financial institution or to the client, stamped on the reverse and endorsed over to the financial institution for the purchase of fixed term deposits.

Deposit Brokers may use a trust account provided they have received authorization from the provincial securities commission or any other applicable regulatory body. In these cases cheques could be payable to the Deposit Broker in trust.

Regulation
The Registered Deposit Brokers Association (RDBA), founded in 1987, is the deposit industry's professional standards Self-Regulatory Organization (SRO). RDBA was formerly the Federation of Canadian Independent Deposit Brokers (FCIDB). The RDBA represents its members and is organized for the purpose of regulating the operations and business conduct of its members and their representatives, with a view to promoting investor protection and the public interest.

Alternatives
Deposit brokers give you access to GICs from smaller financial institutions, which may offer better rates than the big banks. However, many of these smaller financial institutions also sell GICs directly to the public and through discount brokers, so you can do your own shopping and purchase your GICs yourself. Current GIC rates are available from GIC rates comparison chart, along with GIC rates from a few deposit brokers. When comparing rates, make sure to take into account the minimum investment required, and what type of deposit insurance is offered (CDIC or a provincial program).