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CIBC: 3.25% on 5yr GIC!?
January 20, 2022
2:06 pm
ottawa
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CIBC has some crazy GIC interest rates, I feel there must be a trick here but can't find it. What's doubly surprising is (for example) their 5yr posted rate is 2.50%, and Oaken (for example) is only 2.70% for 5yr. IOW, it's not like CIBC is adding 0.75% to some stupid low rate, which is what I normally expect. Highest on the chart here is 3.00% (Wealth One) and even CIBC's posted rate would make them #8.

Don't see anything comparable at the other Big 6, e.g. BMO 5yr is 1.95% (adding 0.75% bonus to that would still be less than Oaken, not that BMO is even doing that).

CIBC: 1 year 0.80%, 1.5 year 0.85%, 2 year 1.75%, 3 year 2.00%, 4 year 2.50%, 5 year 3.25%.

https://www.cibc.com/en/personal-banking/investments/gic-rates-arent-high-enough/bonus-rate.html

Am I missing something? Not a particular fan of CIBC but thinking of moving back to them (my several accounts long closed).

Thanks.

January 20, 2022
2:43 pm
Loonie
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You should read the previous thread of this offer. It has been thoroughly dissected! At last report, people thought their Escalator rate might be slightly better but I have not looked recently.
At present, the thread in question is in the "GIC DIscussions" section, but I have asked it to be moved to CIBC section.

I think CIBC just wants to get out ahead of the curve and scoop up lots of deposits before rates go higher and there is more competition. I can only think that they must know something about what is coming. To me, it suggests they believe inflation is here to stay and rates will raise accordingly. They are certainly in a better position to know than the average consumer. The alternative is that they are just offering a promotion that they don't really need to offer, which doesn't make much sense. For some reason, they REALLY want our money!

January 20, 2022
6:56 pm
ottawa
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I didn't see it before posting, and I actually added a post to that thread figuring no one would come here, myself included. 🙂

(I got thrown because newest posts are on p1, which is nice, but I automatically went to the end).

When I see things like this, I also say it means they think rates are going up and they're trying to lock us in long (same as any offer, when the 5yr rate pays the same as the 1yr rate, they want us taking the 1yr rate). What throws me is that only CIBC is doing this, and it's so much more than anyone else including Oaken, EQ, etc.

January 21, 2022
9:18 am
bhuc
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5 year GIC rate now down to 3% as of todaysf-frown

January 21, 2022
9:40 am
money grabber
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I bought this GIC and taking monthly payment option, they were very good to work with on my purchase. Also there was no penalty for taking this option, I still got the 3.25. I would say what you see on their web page is what you get.

January 21, 2022
10:47 am
COIN
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money grabber said
I bought this GIC and taking monthly payment option, they were very good to work with on my purchase. Also there was no penalty for taking this option, I still got the 3.25. I would say what you see on their web page is what you get.  

Did you still managed to get the 3.25% after the downgrade to 3%?

January 21, 2022
1:15 pm
Kidd
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I had always believed banks both wanted, and needed our deposits. As to why the cibc's offering a gic rate to attract cash.

There are many in this forum, A LOT smarter than me. one1 in particular assured me... banks DO NOT NEED our money. To a bank, our deposits are a liability to them (the other side of the ledger). Banks can borrow, if need be, money at the Bank of Canada rate.

I sometimes disagree with that some1, especially over inflation or a ceo's pay package but that one1 knows what he's talking about. So i believe him, banks do not need our deposits. This 3.25% for a 5 year gic has nothing to do with the cibc needing money.

January 21, 2022
5:56 pm
Norman1
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CIBC still has its AA debt rating from DBRS. That places it between the Province of BC with AA(high) and Province of Ontario with AA(low).

For five year debt, CIBC would normally pay around 2.0%, in between what BC bonds and Ontario bonds yield:

Ontario 2027/06/02 2.60%, 102.723 (YTM=2.060%)
British Columbia 2027/06/18 2.55%, 102.671 (YTM=2.025%)

Analysts still expect CIBC to earn at least $1 billion/quarter for the next few quarters. So, if it needs $1 billion for something, CIBC can just continue to run its business for a quarter.

January 22, 2022
6:57 am
money grabber
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Yes, I got the 3.25 rate but that was the rate the time I got it.

January 22, 2022
10:56 am
savemoresaveoften
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Kidd said
This 3.25% for a 5 year gic has nothing to do with the cibc needing money.  

exactly !

When you see they are offering 5y fixed mortage at 2.90%, u know they dont really want to borrow 5y money at 3.25%. Its good advertising money spent for CIBC as even RFDers noticed and there are a 12-page discussion about it over there !

February 11, 2022
6:37 am
COIN
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Question: Has anybody been offered or requested a 0.50% add-on to the now current posted 3.00% rate for a total of 3.50%?

February 11, 2022
6:58 am
MattS
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well i stopped in my CIBC at 4:45pm Wed. they close at 5pm, not a soul in the branch, I asked the teller who said I have to speak to the lady that just walked by and greeted me. He went to her office and came back and said she is cleaning up a few things and I would need to make an appointment. I said gladly will, but I would like a simple question answered first as we are all busy & if the original offer of 3.25% was available because if not I would save us all the time. Nope, you need to make the appointment!! I said the only reason I was there was because I tried to use the live chat and they said it wasnt but I have since been told they were making it available to some. My RSP due was a decent amount. They could not have given one crap! The young lad apologized and asked if i wanted to book me in. I told him that I dont deal with the big 5 regularly that I deal with credit unions that separate themselves on superior service valuing their customers. I politely said they just confirmed what I have long felt and respectfully decline the appointment. Big 5 are parasites plain and simple

February 11, 2022
7:21 am
savemoresaveoften
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COIN said
Question: Has anybody been offered or requested a 0.50% add-on to the now current posted 3.00% rate for a total of 3.50%?  

I believe they dont have the authority nor room to give an extra 50bps, whether its an advisor or the branch manager. 25bps is doable (I think) if you already have a long term relationship with them.

February 11, 2022
8:10 am
Norman1
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The branch managers do have the authority. The catch is the branch has to eat the extra ¼% or ½% each year on the GIC. So, one needs to make it worthwhile somehow for the branch to do so.

I suspect that is the reason for the appointment. To talk and see if the prospect will also be bringing over a substantial mortgage, line of credit, or money for mutual funds. If not, the answer would be no, the branch will not give an ¼% or ½% each year on the GIC.

February 11, 2022
8:17 am
Loonie
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Essentially, what this means is they may give you an extra .25 if they believe they can make it up (and preferably more) by selling you something else.
You, of course, being a prudent person with regards to finances, will want to shop around when it comes to loans, mutual funds etc.
Consider too the "value" of your adult children. Be sure the banker knows your kids are asking you about what to do about mortgage, TFSA investment, line of credit etc etc.

February 11, 2022
8:37 am
HermanH
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COIN said
Question: Has anybody been offered or requested a 0.50% add-on to the now current posted 3.00% rate for a total of 3.50%?  

savemoresaveoften said

I believe they dont have the authority nor room to give an extra 50bps, whether its an advisor or the branch manager. 25bps is doable (I think) if you already have a long term relationship with them.

I did call my long-term Imperial Service rep and asked her about the additional 0.5% and she told me that since the pandemic, they were no longer authorized to give any bonus rates. Previously, she had discretion for an additional 0.5%

Norman1 said
The branch managers do have the authority. The catch is the branch has to eat the extra ¼% or ½% each year on the GIC. So, one needs to make it worthwhile somehow for the branch to do so.

I suspect that is the reason for the appointment. To talk and see if the prospect will also be bringing over a substantial mortgage, line of credit, or money for mutual funds. If not, the answer would be no, the branch will not give an ¼% or ½% each year on the GIC.

I had significant GIC amounts, but no other products.

February 11, 2022
9:16 pm
Norman1
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HermanH said

I had significant GIC amounts, but no other products.

Unfortunately, that is not very interesting for a branch of a Big 5 Bank.

GIC money would be more appreciated by the small financial institutions working through deposit brokers. Quite a few deposit brokers now offer five year GIC's at 3.15% for $25,000 minimum.

However, that 3.15% seems to be for unregistered funds at GIC Direct. The five year RRSP GIC's there are a lower 2.8%.

February 11, 2022
9:22 pm
Norman1
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Loonie said
Essentially, what this means is they may give you an extra .25 if they believe they can make it up (and preferably more) by selling you something else.
You, of course, being a prudent person with regards to finances, will want to shop around when it comes to loans, mutual funds etc.

The CIBC branch isn't going fall for that! sf-laugh

The manager would likely invite one to drop by again after one has shopped around and decided to transfer the mortgage, line of credit, or mutual funds to the branch.

February 12, 2022
6:46 am
savemoresaveoften
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Well CIBC's current posted rate is 2.5%, and they said they give u a bonus of 50bps to make it 3%.... Branch will tell u already a bonus of 50 given !

I imagine at times when CIBC's posted rate are low and comparable to the big5, thats when ur advisor can have the discretion to give u a "bonus".
I cant remember exactly but staff can get either 25 or 50 above the posted rate as a perk. Not sure if still applies or not.

February 12, 2022
3:49 pm
bhuc
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Their current 5 year Bonus Rate is still 3.0% and yes the branch has a limited number of bonus top ups of 0.5% they can offer select clients. I know this because I bought a 5 year non registered GIC at 3.5%

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