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Rising Rate GIC
October 29, 2020
6:08 am
Axall
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Good morning all, i'm new to forum and this is my first post. I have a 3 year rising rate GIC with Coast Capital TFSA that I started in Dec 2018. Details are first year 3%, second year 3.5% and third year 4% interest paid annually on anniversary . I find myself in a position where I need some cash. My question is can I withdrawal some of the GIC on the anniversary date and leave the remainder in to complete the third year at 4% or would I have to cancel the third year? How much notice would you have to give the bank before doing this? I cant seem to find any fine print on CC website but I do notice on my online banking it shows that the GIC is not locked in. Just thought I would post here for some info before calling the bank.

October 29, 2020
8:40 am
Dean
Valhalla Mountains, British Columbia
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.
My guess is; "No" ... as I've never heard of a 'partial' withdrawal from a GIC.

But it won't hurt to ask ... call CC.

Good Luck ❗ sf-smile

    Dean

sf-cool " Live Long And Prosper " sf-cool

October 29, 2020
9:33 am
Alexandra
British Columbia
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Yes, just call them. I called them yesterday about a maturing GIC in Nov. It isn't like you are phoning Tangerine and waiting for 45 min. They are right there for ya............at incredibly low rates!!

October 29, 2020
10:25 am
topgun
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Dean said
.
My guess is; "No" ... as I've never heard of a 'partial' withdrawal from a GIC.

But it won't hurt to ask ... call CC.

Good Luck ❗ sf-smile

    Dean

  

I have one GIC that is cashable. You must cash at least $1,000. The remainder accumulates interest.

Have a Great Day

October 29, 2020
4:28 pm
Loonie
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This type of GIC, with increasing rates, is called an Escalator GIC.
I can't speak for CC or whatever fine print , but an Escalator GIC is usually fully cashable on the anniversary dates. I have not heard of them being partially cashable.

I agree with Dean that you need to phone them or email to clarify what you can do. You may be able to negotiate something as I'm sure they would like to dump their obligation to pay you 4%.
The penalty for cashing out annually is reflected in the increasing rate which one would forfeit.
Still, I doubt they will accommodate you. You could try arguing that covid has put this special stress on you and perhaps they would respond to that as every financial institution in the country CLAIMS to be willing to help people out somehow - but I am skeptical.

In other cases that people have reported on this forum wherein they negotiated cashing in a normal non-redeemable GIC, they had to forfeit all the interest.

In terms of timing, I think 2 weeks prior to the anniversary is plenty of notice of your intentions, and even this can probably be reduced. However, the negotiation could take more time, so you need to allow for that.

For future reference, you could probably have avoided this situation by buying several smaller GICs rather than one large one. Then, you can cash in however many you need. As long as you put the minimum investment into each one, this can be done.

Good luck!

October 29, 2020
5:24 pm
KamWest
Toronto
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For future reference, you could probably have avoided this situation by buying several smaller GICs rather than one large one. Then, you can cash in however many you need. As long as you put the minimum investment into each one, this can be done.

Good luck!

That from @Loonie was probably the best advice

October 29, 2020
7:16 pm
Kidd
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Depending on the interest rate being charged, borrow the money you need, using your GIC's as collateral. People borrow money for their rrsps and then use their tax returns to pay their loans back.

Hindsight is always 20/20, when buying GICs in the future. Depending upon the amount of money being invested, i always buy one smaller one, in the event of an emergency, that's the one i'd look at cashing out, knowing I'd forfeit the interest earned. As Loonie has suggested.

October 29, 2020
8:03 pm
Axall
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Thanks to all for the feedback and advice. We are down to one income now since the pandemic started and just want to get our heads above water so the best way for us would be to withdrawal some of our savings. I will call CC and see what I can work out. I will post back here with the info I get after the call. Thanks again.

October 29, 2020
9:26 pm
Loonie
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I hear that you have given this matter some thought, but, nonetheless, if there is any way you can manage without cashing in your savings, that would be best solution. I have no doubt that forum members would be very happy to provide ideas about how to reduce expenses, and you might be able to use some of them. The more details you can provide, the more targeted we can be.

I would hate to see you using up all or most of your savings in this way. Everyone needs a cushion, and things might get even worse.
If you have a mortgage, you might be better off to renegotiate (extend and /or re-mortgage) rather than cashing in the GIC. Mortgage rates are extremely low now, well below 4%, so this might be a cheaper route. When you again have two incomes, you could pay it down. But if you are renting or only recently bought, this is no help.

October 29, 2020
9:42 pm
RetirEd
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I, too, have use multiple GICs instead of one big one to give myself flexibility. For example, $100K as $10K + $20K + $30K +$40K.

But I HAVE been able to partially cash a term - even a 1-year cashable - though never an escalator one. The whole point of the escalator is to get you to accept low initial rates for a future promise. On the other hand, if you're going to forgo the high last-year interest on PART of your deposit, the borrower (them) should be happy to get out of even part of your highest-interest year.

But there's no guarantee. Can't hurt to ask. Wish I could buy your GIC off of you!
RetirEd

October 29, 2020
11:00 pm
Rick
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https://www.coastcapitalsavings.com/legal/term-deposit-non-reg

5. Transfer and Redemption – Subject to the Certificate of Deposit, you cannot negotiate, transfer, or redeem the Term Deposit before the Maturity Date. We may, at our sole discretion, allow the early redemption of the Term Deposit subject to clawback of interest and payment of the penalty interest as may be established by us at the time of early redemption. If we allow for the early redemption of the Term Deposit, interest payable will be calculated to the date of early redemption.

CC is notorious for being inflexible. On their list of products, only the ones purchased as Redeemable appear to be so. That being said...give them a call. My GIC is coming due Nov and the funds will be out the next day. The rare promo aside, they don't even come close to the competition when it comes to ANY of their rates.

October 29, 2020
11:04 pm
Kidd
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I will again agree with Loonie.

Throughout my younger years, i dealt with strikes, economic/retooling and disciplinary layoffs and injuries. At times many of us questioned, is this crap really worth it? It was, it truly was. During the tight times, we reduced our expenditures. I'd leave the car in the garage and pedal my bike, i became more fit not working, than working.

The battles we used to wage against GM, i was asked many times. "If you hate them that much, why don't you just quit?" I'd reply, "then they'd win. I can't let that happen." The tight times looking back, were some of our best times. You just have to get through them.

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