Deposit Rates: ING etc. (2009)

Banking and Saving strategies, maximizing interest rates, budgeting, GICs, HISAs.
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Bylo Selhi
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Post by Bylo Selhi »

Drat! My parents and I just moved cash to CTFS a couple of days ago. Now this.
Pickles wrote:Rob Carrick has an article in today's G&M.
The bank formerly known as GMAC tackles Canada
The one-year GIC offered by Ally pays a highly competitive 1.75 per cent, has no minimum investment and can be redeemed penalty free, with interest paid up until the day you call to get out. With most banks, a redeemable GIC means a big sacrifice on rates. Yesterday, some financial institutions posted rates as low as 0.15 per cent for cashable one-year GICs (please, no one tell me they bought one of these).
Note, however that this feature applies only to 1-year GICs, longer (and shorter) terms are not included [click "Cash out early" tab.]

Some insight on the challenges that Ally, as well as CTFS, have in competing:
These rates do stand out, comparatively speaking. But financial industry consultant David McVay said Ally will still have to contend with what he believes is an overcrowded market for online banks. Take Canadian Tire, for example. "They have a strong brand, they're paying well above ING Direct on their savings account and they have a robust credit card base to market to," he said. "And yet they've done virtually nothing." It will be tough sledding for another bank to come in, he added.
Sedulously eschew obfuscatory hyperverbosity and prolixity.
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Post by BRIAN5000 »

12 month cashable at 1.75 % seems pretty good?

Wow their web site went live last night at 11:00.

To send them money you use a check and they do micro deposits between your external account and your Ally account then its online transfers from then on.

Can you do this with any other HISA?

I'm not sure how many days you lose between transfers?
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Post by BRIAN5000 »

Note, however that this feature applies only to 1-year GICs, longer (and shorter) terms are not included [click "Cash out early" tab.]
Looks like you get 1.5% if you cash early on the longer terms.

If you redeem a GIC over one year (18 month; 2, 3, 4, 5 year) before it matures, you will instead earn interest from the date the GIC was issued up to but excluding the early redemption date at the early redemption rate of 1.5 % per annum, with interest compounded daily at the same rate. In the case of any early redemption, any excess interest that we may have already paid you will be deducted from what we owe you on early redemption.
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Pickles
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Post by Pickles »

IdOp wrote:The daily compounding of interest on the high-interest savings account seems like a bit of a gimmick to me, since they control the rate anyway, and it makes it harder to check their work.

The site isn't opera-friendly.

Apart from these kind of nits it seems like it could become interesting, and is good to know about. Thanks for pointing it out Pickles.
I had a couple of quibbles too, IdOp. Carrick's article highlighted that you can cash in a 12 month GIC with no penalty and for full interest to cash in date. The Ally web site refers to no penalty for cashing in GICs early and receiving appropriate interest and refers you to the privacy and legal page for info on this. The first link I clicked didn't work, but I eventually got to this page to find:

Cashing in a 30, 60 or 90 day GIC early will result in NO interest being paid! This is odd since the interest rate on these is far lower than the daily interest savings account. There is clearly no reason at all to take out a short term certificate.

Cashing in a multi-year GIC early will net you only 1.5% interest. Again, this is lower than the 2% currently paid on the savings account and much lower than, for example, the 5 year rate.

It's only the 12 month GIC that can be cashed in for full value plus accrued interest. And, of course, its rate is also less than the savings account rate, so they really are not offering much. Carrick could have done a better job of clarifying this, IMHO.
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Post by NOVICE99 »

Anyone heard of Maxa? 5-yr gic at 4%. Already have some at Outlook, is this risky?

http://www.maxafinancial.com/bins/page.aspx?cid=1719

Also how good are their features online?
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Post by AltaRed »

NOVICE99 wrote:Anyone heard of Maxa? 5-yr gic at 4%. Already have some at Outlook, is this risky?
CDIC insured? If not, that is what you are paying the extra 60-70 bp for the risk over a CDIC insured 5 year equivalent.
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Post by CROCKD »

A division of Westoba Credit Union

From website
MAXA Financial, a division of Westoba Credit Union Ltd., is a Manitoba-based financial institution.

We offer our services by mail, telephone, fax, ATM or via the Internet to all consumers in Canada. Without the bricks and mortar of the traditional financial institution, we can offer superior rates for our Investment products - MAXA Savings, MAXA GICs and MAXA RRSPs.

All deposits and accrued interest are 100% guaranteed by the Credit Union Deposit Guarantee Corporation of Manitoba. There is no dollar limit to this coverage.
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Post by Shakespeare »

I hear Merle Hazard singing in the background. :roll:

Reaching for yield without consideration of underlying risk on the basis of a guvmint guarantee....
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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CROCKD
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Post by CROCKD »

DEPOSIT INSURANCE

Why are provincial government guarantees considered to be substantially less valuable than federal government guarantees? Credit union deposits are backed by provincial governments e.g. DICO in Ontario and CUDIC in B.C.

Credit unions have gone bankrupt and depositors have been made whole by these entities in the same way that some trusts and regional banks have gone bellyup and their depositors reimbursed by CDIC.

see this thread
http://www.financialwisdomforum.org/for ... light=duca
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Bylo Selhi
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Post by Bylo Selhi »

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snowback96
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Post by snowback96 »

Canadian Direct Financial just raised their savings deposit rate to 2%. I assume this is in response to the new Ally rate.

With Ally being new, I suspect Ally will keep its rate at a minimum of 2% for an extended period to generate critical mass. With CDF following suit, me thinks we have a new floor for the next 6 months or so. This also means there is no reason to buy any 1 year GICs (and effectively lock in a lower rate).

I love competition!
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Post by queerasmoi »

snowback96 wrote:Canadian Direct Financial just raised their savings deposit rate to 2%. I assume this is in response to the new Ally rate.

With Ally being new, I suspect Ally will keep its rate at a minimum of 2% for an extended period to generate critical mass. With CDF following suit, me thinks we have a new floor for the next 6 months or so. This also means there is no reason to buy any 1 year GICs (and effectively lock in a lower rate).

I love competition!
Sweet! Still in the process of opening the CDF account...

It would also be great if CDF could increase their withdrawal limit over 1/month or charge less than $2.50 per excess, but I think I can work around it just fine.
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Post by CROCKD »

ING direct now down to 1.05% in the ISA and

CTFS down to 1.2%
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Post by CROCKD »

HSBC Direct now down to 0.8%
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Post by BRIAN5000 »

Mailing checks to Ally today.

Not that impressed so far.
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Post by queerasmoi »

Canadian Direct Financial sent me my welcome package but my card hasn't been produced yet, so no online banking so far. Will report in next week when it's all set up. Will evacuate most cash from ING and HSBC as soon as I can see my balances online :)
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Post by Subby »

I've set up my account with Ally a few days ago. I also mailed them my cheque and noticed that it has already been deposited.

So far so good. Also, linking the external accounts to the Ally savings account was uneventful and straight forward. The good news here is that I will not lose the interest I would have earned by moving the funds from one account to another and then to Ally.

The current difference in interest between CTFS and Ally for instance on 100K is $800 per year (I know, that differential of 1.2% and 2.0% respectively may not last) certainly isn't insignificant.

It's not that much fun to have all of these 'high savings' accounts opened but at the same time, it's made it easier to jump from one company to another chasing the highest rate.
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Post by BRIAN5000 »

It's not that much fun to have all of these 'high savings' accounts opened but at the same time, it's made it easier to jump from one company to another chasing the highest rate.
I agree, I was actually consolidating accounts but with such low rates I've decided I better put some time on the FI side and move some money. Been neglected to long.
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Post by snowback96 »

BRIAN5000 wrote:
It's not that much fun to have all of these 'high savings' accounts opened but at the same time, it's made it easier to jump from one company to another chasing the highest rate.
I agree, I was actually consolidating accounts but with such low rates I've decided I better put some time on the FI side and move some money. Been neglected to long.
I have come to the same conclusion. As much as I have always been a big fan of simplification, it's not that much effort to have 3 or 4 online savings accounts. Once an account is open, even if the rate becomes uncompetitive, it's no extra effort to keep $100 in the account. You never know when they'll become competitive again.

Keep your capital on the move where it will be respected by the banksters!
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Post by queerasmoi »

I'm *still* slugging through the CDF process but I'm attracted to the idea that Ally is using much newer technology and less paper forms (and less fees). So I've decided, heck why not, I will open with Ally too and see how it goes.
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Post by Pickles »

queerasmoi wrote:Canadian Direct Financial sent me my welcome package but my card hasn't been produced yet, so no online banking so far. Will report in next week when it's all set up. Will evacuate most cash from ING and HSBC as soon as I can see my balances online :)
You don't need a card to access your account on line, just your account number and password.
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Pickles
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Post by snowback96 »

queerasmoi wrote:I'm *still* slugging through the CDF process but I'm attracted to the idea that Ally is using much newer technology and less paper forms (and less fees). So I've decided, heck why not, I will open with Ally too and see how it goes.
There were a couple things that didn't make sense to me during the sign-up process. I just called them and they cleared everything up. They're learning on the fly but very helpful.
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Post by BRIAN5000 »

BANQUE NOUVELLE-ECOSSE anyone know what this means?
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Post by Shakespeare »

Bank of Nova Scotia. In French.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Post by BRIAN5000 »

Thank you, thats what I figured, and the online translator says the same thing. If you sign up with Ally you need to speak french.
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