eSavings and TFSA down to 1.80% | Alterna Bank | Discussion forum

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eSavings and TFSA down to 1.80%
June 2, 2020
7:18 am
picassocat
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Sign of the times

June 2, 2020
10:04 am
dougjp
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picassocat said
Sign of the times  

Generally yes, as we all know.

However in addition, for those of us who look at such things in order to guess where to place funds in the future, its a consistent continuation of a rate setting/changing pattern relative to others. That fact got me almost all out of their TFSA last December, which has been a big benefit. In short, they want to be slightly behind on rates.

June 10, 2020
12:42 pm
Laertes
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I see they are now down to 1.69%.

Doug, why would they want to be slightly behind? What advantage is there? (In case it sounds like I'm being argumentative, I'm not. I just don't understand the logic. I'm a longtime lurker and first time poster....)

June 11, 2020
1:48 am
Loonie
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Doug may have another opinion, but I think they like to be in second position because it makes their deposits more stable. Some people move large amounts of money around so as to get the highest rate, and do it regularly. The bank hopes to avoid that volatility.

June 11, 2020
7:39 am
picassocat
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My Tangerine interest special ended May 31st thus I transferred all my money to Alterna because there wasn’t a big difference between them and B2b/LBC digital (plus the functionality of these two sister banks are still questionable). Now with this new interest cut at Alterna, most of my money is going to B2b/LBC digital. I will keep some dough with Alterna in case I can’t access anything from the Laurentian group.

June 11, 2020
11:46 am
dougjp
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Laertes said
I see they are now down to 1.69%.

Doug, why would they want to be slightly behind? What advantage is there? (In case it sounds like I'm being argumentative, I'm not. I just don't understand the logic. I'm a longtime lurker and first time poster....)  

Simple really, pay less out and increase profits. Loonie is right as well, more stability in the level of total deposits. However the downside is they don't have as much in deposits.

It depends on a bank's need for funds at any given time. My comment about Alterna was more because they are very consistent over the years by not quite offering what is available elsewhere and drop their rates first. Some other banks that are consistent pay a bit more, and some banks go for promotions and/or highly competitive rates and then back away from that.

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