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7:40 pm
August 18, 2010
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Donny
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All three Interest Plus accounts (Savings, RRSP and TFSA) have been raised to 1.5%. Still not the most competitive, but a step in the right direction nonetheless.
I find it curious that savings rates have gone up once or twice at several banks in the past month but 5-year GIC rates have taken a tumble in kind. Thoughts?
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8:03 pm
August 18, 2010
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Jim
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Hmmmm, just after I totally drained my account with them. I guess enough of us did it.
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1:19 am
August 19, 2010
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mike
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All three Interest Plus accounts (Savings, RRSP and TFSA) have been raised to 1.5%. Still not the most competitive, but a step in the right direction nonetheless. I find it curious that savings rates have gone up once or twice at several banks in the past month but 5-year GIC rates have taken a tumble in kind. Thoughts?
It's good to see PCF finally raising rates. They were 1.1% so going to 1.5% is a good % move… I would like to see them 2% and be the leader they used to be. But 1.5%, not bad. Hopefully this is the start of a larger trend of raising savings rates. If we could get out of the "Debt = weath" mind set to "weath = savings/no debt" then we could start to come out of this great recession.
My guess about GIC rates is two things: 1. That the banks feel the rates in 5 years time will not go up as much as we think they will all be. 2. Demand. Many are bailing out of the stock market and going to a flight for safety in bonds and GICs, thus banks can pay less to investors for their GICs.
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6:54 am
August 19, 2010
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Doug
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Right on, mike. Unfortunately, the downside of a risk-averse public and a public more inclined to pay down debt and accelerate mortgage payments rather than use mortgages like personal ATMs (what a concept!) is there's so much demand for extremely safe, deposit insured products, banks and credit unions alike have no reason to raise rates.
Cheers,
Doug
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7:37 am
August 19, 2010
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mike
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Doug said:
Right on, mike. Unfortunately, the downside of a risk-averse public and a public more inclined to pay down debt and accelerate mortgage payments rather than use mortgages like personal ATMs (what a concept!) is there's so much demand for extremely safe, deposit insured products, banks and credit unions alike have no reason to raise rates.
Cheers,
Doug
That's very true Doug. Any suggestions then on how to encourage consumers to "do the right thing" and save for their own futures?
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1:00 pm
August 19, 2010
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Donny
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Jim: I also yanked out all my savings from there 3 months ago after being with them for over a decade, still have my TFSA there until the end of the year (if it weren't for that $50 service charge it'd already be gone) and my RRSP (haven't decided where to else to park it yet). I am keeping the chequing account since it suits my needs best…nothing cheaper than free/unlimited!
Mike, Doug: I agree totally, I figured the forecast for demand on long-term deposits were negative…I guess my question was more based on the fact that variable rate savings accounts are going up, yet the 5-year GIC went down. I would have thought they would stay the same or gone up with the other accounts, not the opposite…seems counterintuitive to me…well, in my head. But the facts, as you stated, are another issue. 
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5:32 pm
August 19, 2010
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Doug
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mike said:
That's very true Doug. Any suggestions then on how to encourage consumers to "do the right thing" and save for their own futures?
Unfortunately, nope I don't. 
-Doug
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4:28 am
August 20, 2010
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mike
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Donny said:
Mike, Doug: I agree totally, I figured the forecast for demand on long-term deposits were negative…I guess my question was more based on the fact that variable rate savings accounts are going up, yet the 5-year GIC went down. I would have thought they would stay the same or gone up with the other accounts, not the opposite…seems counterintuitive to me…well, in my head. But the facts, as you stated, are another issue.
I'm actually starting to think that we all did the right thing NOT to get into the stockmarket for "savings" but into these savings accounts. It's hard to get a 4-5% rate in the stock market without significant risk to your capital. 2% with no risk? humm… that's good.
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7:12 am
August 20, 2010
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Doug
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Well, 4-5% is reasonable with low to moderate risk and a long-term time horizon, provided you pick relatively stable, recession-resistant industries and defensive stocks such as Canadian banks, utilities, telecommunications and health and food multi-brand conglomerates such as J&J or P&G.
Nonetheless, you are quite right that to expect a higher return, you have to be willing to take on a higher level of risk.
Cheers,
Doug
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