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Savings Accounts Rates Drop
June 1, 2020
10:08 am
GR
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Savings accounts down to 1.75%.

June 1, 2020
10:16 am
Doug
British Columbia, Canada
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GR said
Savings accounts down to 1.75%.  

The avalanche of rate drops is proceeding as predicted. Once one or two of the Manitoba CUs drop below 2.0%, 2.0% will become the new top rate, which Motive Financial and LBC Digital will hold by the end of June. The rest will be between 1.65-1.95%, with an average of probably 1.75%. Motus Bank will drop and harmonize their HISA and TFSA rates at 1.25-1.50% before the end of July 2020.

Cheers,
Doug

June 7, 2020
5:44 am
canadian.100
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Doug said

The avalanche of rate drops is proceeding as predicted. Once one or two of the Manitoba CUs drop below 2.0%, 2.0% will become the new top rate, which Motive Financial and LBC Digital will hold by the end of June. The rest will be between 1.65-1.95%, with an average of probably 1.75%. Motus Bank will drop and harmonize their HISA and TFSA rates at 1.25-1.50% before the end of July 2020.

Cheers,
Doug  

No wonder the stock market has recovered very nicely. Interest rates of 1.25%-1.50% results in basically no return/income after income taxes and inflation.

Doug - your purchase of CWB (I think it was at about $20) and those who nibbled on quality stocks (Canada and US) which were "on sale" in March and April - was a very smart move.

No doubt the economy and inflation will resume to or toward normal levels by last quarter of this year. Perhaps that will stabilize any more drops in interest rates. Of course if inflation starts up, then perhaps interest rates may slowly increase - but likely only slightly for savings accts and gics - while more pronounced increases to rates for mortgages and debt as is the pattern.

June 7, 2020
1:16 pm
Doug
British Columbia, Canada
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canadian.100 said
No wonder the stock market has recovered very nicely. Interest rates of 1.25%-1.50% results in basically no return/income after income taxes and inflation.

Doug - your purchase of CWB (I think it was at about $20) and those who nibbled on quality stocks (Canada and US) which were "on sale" in March and April - was a very smart move.

No doubt the economy and inflation will resume to or toward normal levels by last quarter of this year. Perhaps that will stabilize any more drops in interest rates. Of course if inflation starts up, then perhaps interest rates may slowly increase - but likely only slightly for savings accts and gics - while more pronounced increases to rates for mortgages and debt as is the pattern.  

@canadian.100 Thanks, I wished I'd bought more of CWB. Only bought ~$5,000 or so. (I usually buy chunks of $5,000, since I like to buy 100-250 shares of any stock I buy.) I got it at ~$17.56 was the price, I think, exclusive of commission. Missed getting it at ~$15.50 (absolute low point) due to waiting for transfer in to be processed. The TMXMoney website shows a P/B ratio of 0.82, but that isn't reflective of their purchase of T.E. Wealth and Leon & Frazer Wealth from iA Financial Group, which took them to $8 billion in private wealth assets under management or advisement (from $2 billion). That purchase closed June 1, 2020, so will take three months to update the book value. So, I'd still say it's a "buy" right now—it's just not a "screaming buy" anymore. 😉

Cheers,
Doug

June 7, 2020
1:46 pm
cruzinalong
Ontario
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You do not need to buy/sell board lots these days. With low commissions you can purchase any value. Minimum $500. Hold for a long time. Long time is 1+ years depending who you talk with.

June 8, 2020
6:58 am
canadian.100
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cruzinalong said
You do not need to buy/sell board lots these days. With low commissions you can purchase any value. Minimum $500. Hold for a long time. Long time is 1+ years depending who you talk with.  

I don't think there is a minimum of $500 - certainly not with the discount broker I use.
If you buy quality stocks eg Canadian banks, I hold for the long term - certainly not just for 1 or 1+ (whatever that means) years.

June 8, 2020
9:43 am
cruzinalong
Ontario
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There is ACTUALLY no minimum purchase with a discount broker. You could buy 1 share plus commission ($5-$10) if you want. My TFSA has 1 share. Not interested in committing to TFSA yet. I hold for a long time. Years.

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