Fund Library Q&A with Gordon Pape

Questions on BCE in RRIF, preferred shares, high interest accounts

Time to open this month’s mailbox. Here are some interesting questions readers have submitted recently.

BCE in RRIF

QUESTION: Could you please comment about the suitability of BCE Inc. (TSX: BCE) in a RRIF account? – Pierre C.

ANSWER: After the company slashed its dividend in the spring of 2025, the stock ended its long slide and stabilized in the $30-$35 range. The new quarterly dividend is $0.4375 per share ($1.75 per year) to yield 5.75% at the recent price of $30.41.

The yield would make BCE a suitable RRIF holding if the share price stays within the current range or climbs higher, as some analysts expect. However, the price has been wobbly, and we’ve seen it dip below the $30 level on a few occasions this summer. Year-to-date, the shares are down almost 6%.

That doesn’t mean don’t buy. But recognize that the market remains uneasy about the company, and there still could be some downside from here. I think the dividend is secure at the current level.

Preferred shares

QUESTION: I see very little written about preferred shares as an income option. I am 81, retired, with an adequate portfolio to see me, optimistically, through another 25 years. My conservative portfolio consists of about 40% rate resets and split corp. preferreds (but no bonds). What is your opinion about this asset class as an alternative to bonds? – Peter J., Guelph ON

ANSWER: Preferreds used to be an excellent option for older investors seeking safety and income. Their share price has always been subject to interest rate movements, but the cash flow is higher than you’d get from common share dividends or most bonds.

However, the flood of new rate reset preferreds in recent years has complicated the picture. RBC Global Asset Management describes these as “hybrid securities that pay a fixed dividend for a set period (usually five years) based on a spread over a benchmark rate, such as the 5-year Government of Canada bond. After this period, the dividend rate resets to a new rate, and investors can often convert to floating-rate shares.”

The rate resets introduced more volatility into the preferred share market, catching many investors by surprise. They introduced a new factor in the form of “reset risk” – a potential drop in the dividend at reset time if interest rates fell. Some investors found the calculations too difficult to deal with and lost interest.

We track several preferreds and split preferreds in my Income Investor newsletter.

High-interest accounts

QUESTION: When I have cash in my RRSP that I want to hold, how do I get it into the high interest savings accounts you recommend without having to take it out of my RRSP? – Art L.

ANSWER: Ask the administrator of your RRSP. The company should have access to at least one and probably more high-interest accounts that can be used. Ask for the one with the best rate.

Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.

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Notes and Disclaimer

Content © 2026 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.

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