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Accelerate raises rates again.
February 11, 2014
10:10 am
Loonie
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Applies to GIC, TFSA, RRSP, and RRIF

1 Year Term 2.20%
2 Year Term 2.40%
3 Year Term 2.60%
4 Year Term 2.80%
5 Year Term 3.10%
6 Year Term 3.15%
7 Year Term 3.20%

Variable rate remains at 1.9%

The increases are basically for the longer term investments. This suggests that Accelerate believes rates will go up in the intervening years.

February 11, 2014
10:53 am
SD2013
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Loonie, you maybe right about interest rates going up pushing up GIC's but it can also be an act of desperation or need by Accelerate Financial because it needs more of a deposit base by attracting GIC investors in order for lending out more in the form of mortgages and other loans.

The 5 year Canada benchmark bond today, February-11-2014, is only 1.62% versus as much as 2.25% to 2.26% in September-2013 which is a steep 28.31% decrease in annual interest income.

If you look at many other Canadian financial institutions, they have been cutting quite a bit their 3 to 5 year GIC, RRSP, RRIF, TFSA rates.

This is great for you, Loonie and anyone else that wants to lock in to a 6 or 7 year RRIF GIC paying 3.15% to 3.20% and receive a specific amount of guaranteed annual RRIF GIC payments.

This is why Canadians need more competition for our hard earned savings and investments.

I hope you did not transfer your RRIF to Accelerate Financial yet.

Thanks, from SD2013.sf-cool

February 11, 2014
12:03 pm
kanaka
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I have dealt with Accelerate for a few years and will continue to do so. And must mention they have fantastic customer service. They along with Outlook Financial have done a good job of holding their rates vs the ever fluctuating rates at Hubert, in my opinion. Just looking at the 5 year rate they have now matched Outlook Financial and Implicity. For those who find GIC's good for their investment needs these financial institutions are leaders in interest rates vs the big five. I do plan to move RRSP funds to them why wouldn't I? I can't bank based on doom and gloom.

February 11, 2014
1:54 pm
Loonie
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Hi Kanaka and SD
All of these factors may be valid. One never knows what is really the strategy, I suppose. They must have good demand for loans, and people willing to pay their rates. I realize they appear to be going against the trend - or maybe they're in the forefront of something else.
And, no, I haven't done the RIF yet, as I have to go personally to BigBank first and make sure they take out the amount I specify for this year first.

February 11, 2014
2:16 pm
kanaka
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Does not make any difference to me what their business strategy is. Hopefully solid and like I say they are not the leaders in rate increases, rather followers. I like their rates, service and guarantee.

February 11, 2014
4:27 pm
SD2013
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Loonie, if you lock in your RRIF for 7 years in a 3.20%, 7 year RRIF GIC and you deplete your total RRIF balance by then, it will not really matter anymore what their RRIF GIC rates are.

If you are making future GIC investments with them and have other GIC's maturing then I can see why you might want to think what their business strategy is regarding GIC rates and fees.

This is why Canadian competition is the greatest thing that will help GIC investors and consumers when it comes time for all of us to invest or reinvest our GIC's and savings.

Thanks, from SD2013.sf-cool

February 11, 2014
5:03 pm
kanaka
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Loonie are you looking at a 5 or 7 year ladder approach for your RRSP or RRIF? Then every year you are picking up the current rate for a fifth of your investments.
If you are retired are you removing RRSP money annually? You may want to avoid higher taxation at age 71 and may also want to do withdrawals to be eligible for income tested programs later in life as, in my opinion, I would rather to only be paying income tax on interest vs income tax on RRSP or RRIF withdrawals which are fully taxable.
Do you know that you can spilt income on RRIF withdrawals if you are 65?

February 12, 2014
8:15 am
Loonie
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Thanks, Kanaka and SD. This particular investment is strictly the 7-yr RIF, no ladder, to deplete it over the 7 years at best possible rate, and take advantage of the 2000/yr pension tax credit.
I do have other investments to make. I am in the process of realigning all of my money, slowly, to best advantage.

February 14, 2014
11:55 am
JustMe
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They just matched Outlook Financial which was having same rates for quite a while.
But Outlook's GICs are redeemable while everybody's else is not. So if you need money in a hurry you can get it (with lower interest) at any time.

February 14, 2014
8:27 pm
Loonie
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JustMe said

They just matched Outlook Financial which was having same rates for quite a while.
.

Outlook doesn't advertise any 6 or 7 year rates though, so I presume they don't offer them.

February 16, 2014
4:54 pm
JustMe
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Loonie said

JustMe said

They just matched Outlook Financial which was having same rates for quite a while.
.

Outlook doesn't advertise any 6 or 7 year rates though, so I presume they don't offer them.

Probably they do not offer 6-7 years but do you Really want to lock your money 7 years with 3.2%?

February 18, 2014
10:05 am
Loonie
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There are circumstances where locking in for 7 years does make sense, and I am in one of those situations. I have a RIF that I need to wind down over the next 7 years for tax reasons. If I only take 5 years, then I will be stuck with an unknown 2 year rate for the remaining time, and I think the odds are pretty good that it will not be greater than 3.2%, especially as I will only have about $4500, not enough to even qualify for a RIF GIC at many institutions.
Everybody's circumstances are different. Some things work well for some people but would not work at all for others. The advantage of a forum like this is that everyone can look for what works for them.

Please write your comments in the forum.