20 years ago (in 2005), the CDIC coverage limit per deposit category was increased from $60K to $100K. Now, the federal government is considering raising that limit from $100K to $150K. That would follow quite closely to inflation, as the Bank of Canada’s own inflation calculator returns a roughly 54% inflation increase between 2005 and 2025.
Current savings account and GIC rate leaders
Nowadays, at least your savings account interest rate is likely to exceed the current inflation rate (of less than 2.0%) at most of the financial institutions on our savings account comparison chart. 3.10% is still the top savings account interest rate, which you can currently get from PC Financial and Wealth One Bank of Canada; and you can still get 3.50% from EQ Bank if you have an eligible direct deposit. Some of the recent rate changes include increases from Hubert Financial (from 2.00% to 2.30%), as well as MAXA Financial and Outlook Financial (both from 1.85% to 1.95%).
Meanwhile, the top GIC rates on our chart are currently as follows:
- 1-year: 3.65% (or 4.10% via a broker)
- 2-year: 3.75% (or 4.05% via a broker)
- 3-year: 3.70% (or 3.92% via a broker)
- 4-year: 4.00% (or 3.88% via a broker)
- 5-year: 3.95% (or 4.01% via a broker)
Mutual fund sales culture concerns
Recently, the Ontario Securities Commission and Canadian Investment Regulatory Organization reviewed the sales practices at 5 bank-affiliated mutual fund dealers. Among the study’s findings:
We observe that 25% of representatives across banks reported that clients have been recommended products or services that are not in their interests at least ‘sometimes’, which suggests that product recommendations may not always be in the interests of clients.
Quick personal finance hits
- Poll results: Last month, we asked readers whether they’ve ever been a victim of financial or online fraud. 32% responded “yes”, while 68% responded “no”.
- Discussion on how to determine what percentage to withdraw from your RRIF each year
- Forum users do not recommend a market-linked GIC
- Remember that if you have excess cash sitting in an investment account, you can take advantage of brokerage investment savings accounts, which forum user Norman1 regularly tracks
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