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Coast Capital -- new offer
April 24, 2020
9:21 am
Alexandra
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Back in February and March of 2018 Coast Capital was offering 4% on a 33 month GIC. What they are offering some (all?) clients now is the ability to extend their GIC for a 19 or 28 month GIC. If you do, you would get the 4% amount up til say end of April 2020, then you would receive between 3.04% and 3.16% for another 19 month or 28 month GIC. If your GIC would have come due in November, 2020 you would get the 19 month at 3.04 % or the 28 month at 3.09%. If your GIC would have come due in December 2020 then the 19 month GIC would pay 3.14% and the 28 month GIC at 3.16%. You can also break up your current GIC so say if you had $50K @ 4%, you could have $25K come due in November/December at the full 4%, and have $25K calculated til the end of April 2020 and then get the 3.04%-3.16% for the extended period. What would you do?

April 24, 2020
9:37 am
Bud
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only available in b.c. right?

April 24, 2020
9:46 am
Doug
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Alexandra said
Back in February and March of 2018 Coast Capital was offering 4% on a 33 month GIC. What they are offering some (all?) clients now is the ability to extend their GIC for a 19 or 28 month GIC. If you do, you would get the 4% amount up til say end of April 2020, then you would receive between 3.04% and 3.16% for another 19 month or 28 month GIC. If your GIC would have come due in November, 2020 you would get the 19 month at 3.04 % or the 28 month at 3.09%. If your GIC would have come due in December 2020 then the 19 month GIC would pay 3.14% and the 28 month GIC at 3.16%. You can also break up your current GIC so say if you had $50K @ 4%, you could have $25K come due in November/December at the full 4%, and have $25K calculated til the end of April 2020 and then get the 3.04%-3.16% for the extended period. What would you do?  

It's not an extension. The 4.0% GIC included a one-time convertability provision whereby if you chose to choose a new term, generally at a higher rate than you received, you would receive the new rate for the remainder of your term.

It's possible they've done a targeted offer to those with 4.0% GICs, but I have a 4.0% GIC and I've not received such an offer. I can't confirm whether this is even an offer, but if it were, it's entirely possible they're letting you extend your term, but are converting you to the new, lowered rate from the day you convert, consistent with the provisions of the convertible GIC.

It would be helpful if you can post a screenshot so we can confirm both the authenticity and the specific provisions of this offer; otherwise, it's just conjecture.

Overall, I wouldn't recommend it. I have been wholly disappointed in Coast Capital Savings, from their non-standard reporting of interest not received that is offside with the manner in which the Big 10 banks including Tangerine all do to their lack of free & unlimited Interac e-Transfers to their cluttered public website and, finally, to their lack of self-to-self bank-to-bank transfers between external accounts. I could go on, but I am moving on.

Cheers,
Doug

April 24, 2020
9:58 am
Alexandra
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Doug said

It's not an extension. The 4.0% GIC included a one-time convertability provision whereby if you chose to choose a new term, generally at a higher rate than you received, you would receive the new rate for the remainder of your term.

It's possible they've done a targeted offer to those with 4.0% GICs, but I have a 4.0% GIC and I've not received such an offer. I can't confirm whether this is even an offer, but if it were, it's entirely possible they're letting you extend your term, but are converting you to the new, lowered rate from the day you convert, consistent with the provisions of the convertible GIC.

It would be helpful if you can post a screenshot so we can confirm both the authenticity and the specific provisions of this offer; otherwise, it's just conjecture.

Overall, I wouldn't recommend it. I have been wholly disappointed in Coast Capital Savings, from their non-standard reporting of interest not received that is offside with the manner in which the Big 10 banks including Tangerine all do to their lack of free & unlimited Interac e-Transfers to their cluttered public website and, finally, to their lack of self-to-self bank-to-bank transfers between external accounts. I could go on, but I am moving on.

Cheers,
Doug  

Hi Doug, I just got the offer last night via phone call. The person that called me was from another branch, not the branch I purchased the GIC from. I think they are sweating the fact they are going to have to payout to whole lot of people 4% interest in a two month period. They offered that 4% during the time they wanted to become under the federal guidelines and not the provincial. I am a senior and I know that you are much more aware of the technicalities of banking than I am. I would say that the offer would be only for the clients that purchased the term deposits at the 4%. I really appreciate all the knowledge that you bring to this forum. sf-embarassed

April 24, 2020
10:05 am
Vatox
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I wasn’t offered this, but it sounds like a conversion as Doug describes. The 4% GIC was a convertible type. But I can’t see myself converting to a lower rate. It sounds like a “fear” offering, where you convert to a lower rate to get the extended security. If the conversion was 5 years, I would consider it, but losing 8 months of 4% to gain a few extra months at a lower rate, doesn’t sound appealing.

Edit: I would consider perhaps 3 years at that roughly 3% conversion.

April 24, 2020
10:12 am
GICinvestor
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What would you do?

Get what ever you can out of it and like the Ikea commercial, start the car and zoom away, but forever.

April 24, 2020
1:44 pm
Jowett
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All of my GIC's at 4 per cent expire Nov/Dec 2020. Based on the 19 month offer if you could obtain better than 2.3 per cent for the final 12 months after the 4 per cent expires you would be better off letting it expire and renewing wherever at , say 2.4 per cent or higher.
The issue will of course depend on whether 2.4 per cent or higher will be available at that time. I have not received this offer yet but if I do I think I will probably reject it and take my chances.

April 24, 2020
2:42 pm
Alexandra
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Jowett said
All of my GIC's at 4 per cent expire Nov/Dec 2020. Based on the 19 month offer if you could obtain better than 2.3 per cent for the final 12 months after the 4 per cent expires you would be better off letting it expire and renewing wherever at , say 2.4 per cent or higher.
The issue will of course depend on whether 2.4 per cent or higher will be available at that time. I have not received this offer yet but if I do I think I will probably reject it and take my chances.  

Thanks Jowett. I think what I will do is let half of my GIC's with them stay at the 4% til maturity in Nov & Dec & I'll go with the 19 month offer for the other half. Half of all the GIC's I own have or are maturing this year. I was no doubt wrong in doing this. In the past I have always spread them out more evenly. Also, in the last couple of years, instead of laddering, because of my age, I put them in the highest interest offered at the time & take the option of annual payments.

April 24, 2020
5:19 pm
Rick
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Doug said
It would be helpful if you can post a screenshot so we can confirm both the authenticity and the specific provisions of this offer; otherwise, it's just conjecture.

untitled3-2.jpg
1The promotional rate is 2.35% per annum, subject to purchasing a 15-month non-redeemable term deposit through the Coast Capital Online Banking platform. Interest is calculated annually and accrued daily.This offer is not available through Contact Centre or in branch. The 2.35% promotional rate will apply for the full amount of the term deposit. Rate holds are not eligible for this promotional offer.

Each individual is limited to one 15-month non-redeemable term deposit under this promotional offer. A minimum investment of $500.00 and a maximum investment of $999,000.00 is permitted per term deposit. Coast Capital Savings Federal Credit Union may, at its sole discretion, close and refund the funds invested in the term deposit in case the amount of a term deposit investment exceeds $999,000.00. No interest will be paid on funds refunded in this manner.

Coast Capital Savings Federal Credit Union reserves the right to modify, extend, revoke, or terminate this promotional offer at any time without prior notice, including changing the deposit rate.

I too got a phone call few weeks back asking if I wanted to convert my 4% gic to a new term with a blended rate. Said no...was happy with my 4%. Considering their everyday rates suck, they probably thought it was a good idea. They already have instructions to redeem it to chequing so it's out of there to somewhere that will pay better than the blended rate offered.
Believe the 2.35 is available to anyone.

https://www.coastcapitalsavings.com/promotions/term-deposit-offers

April 25, 2020
9:17 am
toto
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My 4 percent gic with coast is maturing in November.
I haven't been contacted by phone or email.

April 25, 2020
9:37 am
Alexandra
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toto said
My 4 percent gic with coast is maturing in November.
I haven't been contacted by phone or email.  

I am going to phone them back next week.

If you are interested in their new blended rate offering, maybe give them a call.

April 26, 2020
8:19 am
tgaucher
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Copy of the 4% extension offer,

Your options are:

19 Month Non-redeemable Blend and Extend Term
Base rate: 2.05%
Bonus offer: 4% for additional 30 days
Blended rate of: 3.04%

28 Month Non-redeemable Blend and Extend Term
Base rate: 2.10%
Bonus offer: 4% for 100 days
Blended rate of: 3.09%

Please note that this offer is only valid until April 30th, 2020. The rate on your new term documents will display as the blended rate shown above. You do not lose your 4% rate that you are owed until maturity of your current term by doing the terms above, you actually will be getting an extra 30 days or 100 days added on top of your current maturity date. The blended rate takes this into account and makes sure there’s no loss of interest to you by proceeding with this offer.

The term would start as of the date we decide to proceed with the request, and the maturity date will vary depending on the new term selected, either 19 months or 28 months from the date. This is a NON-REDEEMABLE term

April 26, 2020
8:46 am
Alexandra
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When I was called by Coast Capital they offered as above the 19 month blended rate of 3.04% and 28 month at 3.09 %. This was for the 4% GICs maturing in November of 2020. If your GIC matures in Dec 2020 the blended rate offered was 3.14% for 19 month & 3.16% for 28 month.

I will call them tomorrow.

April 26, 2020
8:54 am
Doug
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Alexandra said
When I was called by Coast Capital they offered as above the 19 month blended rate of 3.04% and 28 month at 3.09 %. This was for the 4% GICs maturing in November of 2020. If your GIC matures in Dec 2020 the blended rate offered was 3.14% for 19 month & 3.16% for 28 month.

I will call them tomorrow.  

Yeah, that sounds more like what I thought. They will offer you a new term, beginning on the day you convert, that will be a blended rate of your existing 4.0% GIC and a new rate for the new term. So, in those cases, by way of example, if you made the effective date April 27, 2020, you would convert your 4.0% GIC into a 3.14% GIC from April 27, 2020, and 3.16% for 28 months from April 27, 2020.

Personally, I would reject either offer. While it's unlikely higher GIC rates will emerge in November or December 2020, the risk/reward profile of migrating one's assets from risk-free GICs into moderately more risky assets is extremely compelling. sf-cool

Cheers,
Doug

April 26, 2020
9:22 am
Alexandra
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Thanks Doug. Another aspect I have been wondering about: When I purchased the 4% GIC's Coast Capital was a "provincial credit union" so 100% of investments were covered by B.C. But now they are under Federal guidelines which covers under CDIC only up to $100k for each specified category.

So, are investments purchased at that time still covered by the 100% guarantee or would it have changed to the $100K guarantee once they became Federal? If the investment is still covered at the purchased guarantee, would the new convertible rate now be under CDIC guarantee?

Yikes, I hope I am making myself clear here. I know you will get what I am saying.

April 26, 2020
11:05 am
Jowett
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Alexandra said
Thanks Doug. Another aspect I have been wondering about: When I purchased the 4% GIC's Coast Capital was a "provincial credit union" so 100% of investments were covered by B.C. But now they are under Federal guidelines which covers under CDIC only up to $100k for each specified category.

So, are investments purchased at that time still covered by the 100% guarantee or would it have changed to the $100K guarantee once they became Federal? If the investment is still covered at the purchased guarantee, would the new convertible rate now be under CDIC guarantee?

Yikes, I hope I am making myself clear here. I know you will get what I am saying.  

When CDIC took over coverage of Coast Capital's obligations with regard to deposit insurance the agreement was that CDIC would cover all current GIC's to the original amount deposited. For example a $200,000 GIC would be covered for $200,000 plus interest until the expiry of that GIC.
Whether or not this would continue if one were to accept the blended extension is not clear.

Another point here is if the GIC is extended when would interest be paid? Would they amalgamate the interest and pay out in 2021 or would it be paid out for the original GIC in Nov/Dec of this year or even be paid at the date the blended date started?
The answers to these questions would have major tax consequences.

April 26, 2020
11:47 am
Alexandra
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Hi again Doug, I would think that the GIC would be calculated at the 4% til you converted say April 30th. Instead of getting the interest paid in November or December 2020 when the 4% GIC would have matured, you would get the principle and interest paid out at the new date, i.e. 19 or 28 months after April 30th, 2020.

I don't know why there would be tax implications. One pays tax on the calculated interest every year whether or not you actually received it. As I mentioned at an earlier date, lately I have opted to get most of my GIC's interest paid out annually instead of waiting for the maturity date. Then I can use that interest to get the best rate at the time instead of laddering and waiting for the interest to be paid out physically on maturity dates. Am I missing some important factor?

April 26, 2020
4:16 pm
Jowett
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Hi Alexandra, actually it was me that replied to your previous post, not Doug.

My point about taxes would be that if the GIC was actually converted at the end of April rather than Nov/Dec you would then be paid interest after 12 months and again after 19 months from the end of April. This effectively results in 2 interest payments in 2021, instead of another payment in Nov/Dec of this year. This would mean that you would defer paying tax until 2021 tax year on the 7 or 8 months of interest between April and Dec of 2020. Depending on your tax circumstances that could be a good thing.

April 26, 2020
4:27 pm
tgaucher
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Could anybody show me the math of how they come up with this blended rate for either scenario

April 27, 2020
7:48 pm
Bud
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"Opening a membership is open to residents of all provinces. Therefore, term deposits and savings accounts are available."

Whats the best deal for new Coast members?

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