High interest rates for savings, GICs and MMFs (2018)

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Re: High interest rates for savings, GICs and MMFs (2018)

Post by AltaRed »

At iTrade, DYN500 (CAD) is now 1.05% and DYN400 (USD) is now 0.7%. Appears everyone is creeping upward.
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Re: High interest rates for savings, GICs and MMFs (2018)

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Tangerine is still showing a paltry 0.15% interest on USD savings...
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Re: High interest rates for savings, GICs and MMFs (2018)

Post by flywaysuzy »

I see Scotiabank has a 'special' 5- yr gic for 2.6%. Local CU said they are meeting to discuss higher term deposit and mtg. rates, so call back next week.
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Re: High interest rates for savings, GICs and MMFs (2018)

Post by Koogie »

As has been reported elsewhere (highinterestsavings.ca) the Manitoba CU called Accelerate is issuing a 5 yr GIC at 3.2%

With Oaken also at 3.15% and a few others at 3.0%, let's hope this is the beginning of an upward rate march benefitting savers... :thumbsup:
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Re: High interest rates for savings, GICs and MMFs (2018)

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Just curious if people are going with Oaken 5 year at 3.15% or holding off in anticipation of another rate increase. I was thinking of going with it but I am really good at buying GIC's the day before a rate increase.
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Re: High interest rates for savings, GICs and MMFs (2018)

Post by Koogie »

I am buying two of their 18 mos. special (2.5%) tomorrow for my elderly mother.

Oaken has in the past back dated rates if they go up within a week or so of when you purchase.
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Re: High interest rates for savings, GICs and MMFs (2018)

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good4u wrote: 23 Jan 2018 21:23 Just curious if people are going with Oaken 5 year at 3.15% or holding off in anticipation of another rate increase. I was thinking of going with it but I am really good at buying GIC's the day before a rate increase.
I'm holding off until the last rate hike is reflected in the GICs that are available via my discount broker, which I'm expecting any day now... I want 3.15% but I don't want to go through the administrative work to open up GICs at Oaken separately.

The BoC is announcing next on March 7, then April 18, then May 30. The forwards are indicating a pretty high probability of a rate hike by end of May, and then another one by October or December.

How long is it worth it to wait though? I guess the future value equivalent calculation is something like:
(1.0315+.0025)^(5)=(1.0315)^(5+x)
if you assume a 5y GIC, and that you earn nothing until the extra 25bp and earn 3.15 after the 5y point in the scenario where you buy right away. If you want to make it more accurate you could add a savings account rate on the left side of the equation with length of time x but whatever.
If I solve for x I get about .4 or about 4.5 months. I guess it's kind of a wash.
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Re: High interest rates for savings, GICs and MMFs (2018)

Post by Peculiar_Investor »

good4u wrote: 23 Jan 2018 21:23 Just curious if people are going with Oaken 5 year at 3.15% or holding off in anticipation of another rate increase. I was thinking of going with it but I am really good at buying GIC's the day before a rate increase.
I'm reasonably sure this is why AltaRed suggests having GIC maturities staggered a couple of time a year on a 5 year GIC ladder. Then you don't have to do the market timing dance. When a rung matures, purchase the best available 5 year GIC as a replacement and move on.
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Re: High interest rates for savings, GICs and MMFs (2018)

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Peculiar_Investor wrote: 24 Jan 2018 11:00
good4u wrote: 23 Jan 2018 21:23 Just curious if people are going with Oaken 5 year at 3.15% or holding off in anticipation of another rate increase. I was thinking of going with it but I am really good at buying GIC's the day before a rate increase.
I'm reasonably sure this is why AltaRed suggests having GIC maturities staggered a couple of time a year on a 5 year GIC ladder. Then you don't have to do the market timing dance. When a rung matures, purchase the best available 5 year GIC as a replacement and move on.
A sensible strategy - it takes an imminent rate hike to compete and even then it's probably a wash. I'm just having trouble with the fact that most GIC rates I see on my discount brokerage have not budged to reflect the rate hike, and aren't competitive with Oaken and some others, so I'd feel cheated accepting them.
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Re: High interest rates for savings, GICs and MMFs (2018)

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Peculiar_Investor wrote: 24 Jan 2018 11:00
good4u wrote: 23 Jan 2018 21:23 Just curious if people are going with Oaken 5 year at 3.15% or holding off in anticipation of another rate increase. I was thinking of going with it but I am really good at buying GIC's the day before a rate increase.
I'm reasonably sure this is why AltaRed suggests having GIC maturities staggered a couple of time a year on a 5 year GIC ladder. Then you don't have to do the market timing dance. When a rung matures, purchase the best available 5 year GIC as a replacement and move on.
This is a great strategy except that I am almost at my 100k max (for CDIC purposes) and don't want to "waste" my remaining room on a lower rate product should the rates go up in the next few days again. I know I'm splitting hairs but I am looking at the 5-year term and want to feel like I got the best rate possible.
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Re: High interest rates for savings, GICs and MMFs (2018)

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FI40 wrote: 24 Jan 2018 11:08
Peculiar_Investor wrote: 24 Jan 2018 11:00
good4u wrote: 23 Jan 2018 21:23 Just curious if people are going with Oaken 5 year at 3.15% or holding off in anticipation of another rate increase. I was thinking of going with it but I am really good at buying GIC's the day before a rate increase.
I'm reasonably sure this is why AltaRed suggests having GIC maturities staggered a couple of time a year on a 5 year GIC ladder. Then you don't have to do the market timing dance. When a rung matures, purchase the best available 5 year GIC as a replacement and move on.
A sensible strategy - it takes an imminent rate hike to compete and even then it's probably a wash. I'm just having trouble with the fact that most GIC rates I see on my discount brokerage have not budged to reflect the rate hike, and aren't competitive with Oaken and some others, so I'd feel cheated accepting them.
BMOIL's best 5 year rate at the end of December was 2.80%. It has inched up .01% at a time, so now there are 3 FIs (Equitable, HomeEquity, & ICICI) at 2.85%. Not matching Home Trust, etc offering 3.15%+
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Re: High interest rates for savings, GICs and MMFs (2018)

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Peculiar_Investor wrote: 24 Jan 2018 11:00
good4u wrote: 23 Jan 2018 21:23 Just curious if people are going with Oaken 5 year at 3.15% or holding off in anticipation of another rate increase. I was thinking of going with it but I am really good at buying GIC's the day before a rate increase.
I'm reasonably sure this is why AltaRed suggests having GIC maturities staggered a couple of time a year on a 5 year GIC ladder. Then you don't have to do the market timing dance. When a rung matures, purchase the best available 5 year GIC as a replacement and move on.
Indeed :thumbsup: Having at least 10 entries in a 5 year ladder helps mitigate the psychological effects of buyer's remorse. I suspect those who hold out and try to market time an anticipated increase only 'win' on average 50% of the time. Those with larger sums in play might even benefit, or smooth the variable effect, from 15 or 20 staggered entries in a 5 year ladder.

Added: There is not much room for rates to push higher if one looks at BoC bond yields. Recent increases in 5 and 10 year bond yields appear to have flattened out in the last week and yield of long term bonds has actually decreased. The yield curve has gotten awfully flat. The wild card is still the 10 year US Tbill which is seeing pressure from the passing of the US tax bill. Who is going to buy all that additional debt? And at what yield?
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Re: High interest rates for savings, GICs and MMFs (2018)

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2of3aintbad wrote: 24 Jan 2018 12:18 BMOIL's best 5 year rate at the end of December was 2.80%. It has inched up .01% at a time, so now there are 3 FIs (Equitable, HomeEquity, & ICICI) at 2.85%. Not matching Home Trust, etc offering 3.15%+
If you assume there is a 0.25% hidden commission paid by the GIC issuers to BMOIL, I doubt the current 2.85% is going much higher anytime soon. The hidden commission is one of the reasons why it is difficult to get the best available rate from a broker.
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Re: High interest rates for savings, GICs and MMFs (2018)

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snowback96 wrote: 24 Jan 2018 19:07
2of3aintbad wrote: 24 Jan 2018 12:18 BMOIL's best 5 year rate at the end of December was 2.80%. It has inched up .01% at a time, so now there are 3 FIs (Equitable, HomeEquity, & ICICI) at 2.85%. Not matching Home Trust, etc offering 3.15%+
If you assume there is a 0.25% hidden commission paid by the GIC issuers to BMOIL, I doubt the current 2.85% is going much higher anytime soon. The hidden commission is one of the reasons why it is difficult to get the best available rate from a broker.
I think the issue is just that at the moment BMOIL doesn't have any of the highest paying GIC providers available at all. But I mean on ratehub.ca, I can see Manulife is 2.8% and on BMOIL it's exactly the same. Also on Manulife's website it's the same. So there is no hidden commission, at least for that one. Unless I am missing something.
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Re: High interest rates for savings, GICs and MMFs (2018)

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FIs pay 25bp to brokers to sell their GICs. As I understand it, in this case Manulife is willing to pay BMOIL 25 bp just to have another sales (dealer) outlet. It obviously depends on how much an issuer wants or needs that outlet. Companies like HCG peddle their Home Trust GICs through brokers and pay the 25bp. They keep their retail arm, Oaken, separate.

My guess is the number of GIC issuers BMOIL carries depends on their willingness to be a sales outlet AND the willingness of a GIC issuer to want to pay a dealer-broker a commission and/or sell their GICs that way. When HCG was in trouble earlier this year, the brokerages dropped Home Trust from their list.

BMOIL has a reputation to manage. I suspect the brokerages only want to carry issuers that are investment grade regardless of them being CDIC insured, after all, why have the headache of account holders ragging on BMOIL if a GIC issuer goes up in smoke when there are alternatives.
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Re: High interest rates for savings, GICs and MMFs (2018)

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email just received from Oaken effective today

• 1 Year GIC – 2.50% (previously 2.25%)
• 18 Month GIC – 2.75% (previously 2.50%)
• 2 Year GIC – 2.85% (previously 2.60%)
• 3 Year GIC – 2.95% ( previously 2.85%)
• 4 Year GIC – 3.05% (previously 3.00%)
• 5 Year GIC – 3.25% (previously 3.15%)
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Re: High interest rates for savings, GICs and MMFs (2018)

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In case you didn't notice, Tangerine recently upped its "non-promo" savings rate to 1.10%
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Re: High interest rates for savings, GICs and MMFs (2018)

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AltaRed wrote: 22 Jan 2018 19:10 At iTrade, DYN500 (CAD) is now 1.05% and DYN400 (USD) is now 0.7%. Appears everyone is creeping upward.
...no rush at BMOIL with their HISA AAT770 still at 0.95%. Vaguely recall that they were slower with a rate increase the last time...
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Re: High interest rates for savings, GICs and MMFs (2018)

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It is going to depend on what BMOIL has invested the HISA deposits in. They might not be receiving enough return yet to pay higher than 0.95% at the current time (along with a 25bp trailer). IOW, I would not automatically assume they are stiffing their depositors for higher margins.
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Re: High interest rates for savings, GICs and MMFs (2018)

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AltaRed wrote: 29 Jan 2018 21:37 It is going to depend on what BMOIL has invested the HISA deposits in. They might not be receiving enough return yet to pay higher than 0.95% at the current time (along with a 25bp trailer). IOW, I would not automatically assume they are stiffing their depositors for higher margins.
Who are they paying the trailer to?? Head office??
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Re: High interest rates for savings, GICs and MMFs (2018)

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To BMOIL, or whoever the brokerage is in which the asset is held. That is the sad state of affairs with our financial industry. Discount brokerages are only order takers, that is, they provide no advice, but they are not permitted to offer F series mutual funds that have no trailer fees.

Some tried back pre-2000, E*Trade Canada was one of them, but they were shutdown. Word has it the full service brokerage industry put pressure on the mutual fund companies which in turn caved to pressure and refused to let discount brokers offer F series. Try buying F series anything with most brokerages. Some investors and financial planners submitted comments to the CSC and OSC a few years back on the perversity of this but the financial industry is powerful and nothing is being done.

That said, there are some mutual fund companies like Mawer which do not pay trailer fees to anyone. Some discount brokerages offer these funds, effectively F series though they are still called A series, while others do not.
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Re: High interest rates for savings, GICs and MMFs (2018)

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Forced into it by some maturing GIC's and maxed out CDIC limits I had another look at BNS's Momentum Plus Savings account. First discouraged dug a little deeper and it's a keeper short term at least not fantastic but they may offer another bonus for new money which may bring rates to about 2.25% for 90 days.
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Re: High interest rates for savings, GICs and MMFs (2018)

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I hate moving money around so have stayed with E.Q. Bank for some time now with their 2.30% daily interest rate...we have two accounts,because they do not allow joint accts. However yesterday I tried to call them and it was like TD all over again, after trying to call them twice I gave up and send an email, when I tried to log in I kept getting a message that I was logging in on a different device and I would not access the account. I originally would sign in on my laptop, but yesterday I did it from my ipad. frustrating.

E.Q had sent an email re T5's, and I was able to download one. Eventually I got to view the T5 from the other account and found it had an error in amount of interest they reported, so hopefully they will get back to me. Will let everyone know how long this takes. :roll: :roll:
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Re: High interest rates for savings, GICs and MMFs (2018)

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lacrosse905 wrote: 01 Feb 2018 11:02 I hate moving money around so have stayed with E.Q. Bank for some time now with their 2.30% daily interest rate...we have two accounts,because they do not allow joint accts. However yesterday I tried to call them and it was like TD all over again, after trying to call them twice I gave up and send an email, when I tried to log in I kept getting a message that I was logging in on a different device and I would not access the account. I originally would sign in on my laptop, but yesterday I did it from my ipad. frustrating.
E.Q had sent an email re T5's, and I was able to download one. Eventually I got to view the T5 from the other account and found it had an error in amount of interest they reported, so hopefully they will get back to me. Will let everyone know how long this takes. :roll: :roll:
Thanks for that. I to have been very happy with EQ Bank. Didn't realize that I could print out my own T5, so just went online and printed it off.

I do have one problem with EQ. I've been trying to open an account for my elderly mother and for some reason they use Transunion to verify identity.
Transunion has no record of my mother or her SIN. And won't let me intervene to fix the issue. I've always said these credit agencies are bloody useless... :roll:
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Re: High interest rates for savings, GICs and MMFs (2018)

Post by IdOp »

My experience with the EQ Bank online T5 this year was as frustrating as it was last year. When you click to generate the document, it then displays the T5 in the browser. This should not be necessary, it should just download like any statement. The T5 seems to be formatted very inefficiently, as it takes a long time to display over a slow connection.

Compounding the problem is that the displayed T5 has too much information. There are 3 copies of the T5 instead of the usual 2. And there's an extra page of instructions from CRA to the financial institution about how to file the form. This should never be given to clients, it will only confuse people.

Once the T5 has finally displayed, I found the website was inoperative. Clicking the "Print and Download" button did nothing, so I had to take a screenshot instead of downloading the PDF (maybe this is the real purpose of the browser-displayed T5). Clicking other places on the site, even to log off, didn't work anymore either.
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