This stuff drives me crazy about Cdn Tire Financial and ING! In all the years I have had my money invested at Achieva, they have always kept their rates within the top quartile for both term deposits and daily savings, never taking wide interest rate swings and then giving you a short-term rate enhancement and/or $20!
These type of offers are far too much work to try and stay current and if you don't ask, you don't get...it drives me nuts.
I don't have an account with Canadian Tire. Can anyone who does verify that their base interest rate is actually 2.50% as advertised? I've looked at their website, and although they show their current rate as being 2.5%, there are a bunch of footnotes all over their website that refer to a promotional period that ends in June 30, 2009 where in you are supposed to get an additional 1% for 90 days. If their base rate is currently 2.5%, then what I don't understand is why aren't they advertising their rate at 3.5%, and putting footnotes at the bottom indicating that this is a promotional rate only, and that the 3.5% rate is actually the sum of the base rate of 2.5% plus the bonus rate of 1%? All the other banks do this in order to hook customers, why isn't Canadian Tire doing it? I'm wondering if Canadian Tire's base rate is actually 1.5%, and the posted 2.5% rate is the sum of their 1.5% base rate plus a 1% 90-day promotional rate? Times are tough, and banks will probably try every trick in the book to bring in cash. Anyone?
December 12, 2009
The way I read Canadian Tire Bank's website, their current base rate is 2.5% and you earn a 1% on new deposits for the first 90 days. The bonus is one-time only and doesn't apply to subsequent accounts under the same name you open. Bear in mind, they could lower the rate at any time. As well, while they currently offer the second-highest savings account rate in Canada by my calculations (behind Peoples Trust/Canadian Western Bank's Canadian Direct Financial division), this may be because it's the cheapest way for them to raise capital as they may be facing a liquidity crisis. So, while they will likely be losing money paying out these relatively high (given current economic times) rates of return, it's the easiest way for them to raise funds to finance their operations including their lending portfolio of credit cards and mortgages, which they also offer. I know Canadian Tire Bank securitizes their credit card portfolio to investors through trusts that hold commercial paper but given the credit markets are still well frozen, for new debt they hold, that option may not be available to them hence them offering high deposit rates of return.