Achieva Savings Rate drop on 2019-07-02 | Achieva Financial | Discussion forum

Briguy said
Since Bank of Canada hasn't dropped interest rates, I'm thinking FI's don't want to attract as many deposits since they have fewer new mortgages and thus less need for money.

Peoples Trust has been recently increasing their interest rates over the last few months from their previous unattractive rates, so I'm guessing they need some new deposits.  

Peoples Trust GIC rates have been dropping, like most FIs, over the past few months. 15-month GIC rate dropped from 3.10% then to 3.00% and now to 2.65% (still tops relatively speaking, considering 2.70% is the new relative top for a 1-year GIC).

Motus Bank GICs will drop a further 25 bps across the board in the next 1-2 months, irrespective of what the BoC does.

BoC didn't cut rates because the Fed hasn't done it yet. They're trying to hold the line, but when the Fed cuts, it's going to put upward momentum on CAD and that's going to impact our exports, which Poloz - as a former CEO of Export Development Canada - is keen to protect. Thus, their 1.3% GDP growth estimate for 2019 (anemic, to say the least) is likely too rosy, as is often the case with central bank estimates. I'm expecting Canada's GDP to grow at less than 1% for all of 2019 and likely will have a technical recession in the back half of the year.

In short, say goodbye to 3.00%+ 1- to 5-year GIC rates for 2019 and 2020 in fairly short order. 3%, or slightly less, will be the new top for any term GIC rate within 3-4 months.

Cheers,
Doug