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January 6, 2021
2:19 pm
Vatox
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A bit late! I already took the 3 month 2.5% at EQ.

But this offer was sent to me..

Accelerate your savings this year by earning more interest and keeping it tax-free. For a limited time, earn 2.00% in interest* until March 31 when you open a Tax-Free Savings Account (TFSA) with us today.

January 6, 2021
5:00 pm
gicjunkie
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Wow, and then what, .5% for the rest of the year?

There is no future benefit in a 3 month promotional rate. This is a very shortsighted, and ultimately, unprofitable approach to GIC investing. The money has to stay in the account at least until December if you don't want to incur transfer fees, etc. If I am offered a decent 3-5 year rate to attract my business, I would consider it. A bonus rate for 3 months just doesn't cut it.

January 6, 2021
5:12 pm
topgun
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gicjunkie said
Wow, and then what, .5% for the rest of the year?

There is no future benefit in a 3 month promotional rate. This is a very shortsighted, and ultimately, unprofitable approach to GIC investing. The money has to stay in the account at least until December if you don't want to incur transfer fees, etc. If I am offered a decent 3-5 year rate to attract my business, I would consider it. A bonus rate for 3 months just doesn't cut it.  

Glad to hear some people reject these short term offers. Not worth the time to setup an account to get a few extra dollars.

Have a Great Day

January 6, 2021
10:04 pm
Vatox
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gicjunkie said
Wow, and then what, .5% for the rest of the year?

There is no future benefit in a 3 month promotional rate. This is a very shortsighted, and ultimately, unprofitable approach to GIC investing. The money has to stay in the account at least until December if you don't want to incur transfer fees, etc. If I am offered a decent 3-5 year rate to attract my business, I would consider it. A bonus rate for 3 months just doesn't cut it.  

I hear ya! That’s exactly why I went with EQ, the rate after 3 months will surely be half decent.

January 11, 2021
11:51 am
Bobbyjet11
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Took the words right out my mouth, Vatox. EQ consistently keeps their savings interest better than most.

January 12, 2021
1:57 am
RetirEd
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For those who have significant deposits but also unused TFSA contribution room, the short-term rate might be worth it. Simply withdraw the cash after 3 months, out of TF status, and deposit into another financial institution under your existing extra TFSA contribution room. You'd get the rest of your contribution room back the following year.
-RetirEd

January 12, 2021
9:10 am
Vatox
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RetirEd said
For those who have significant deposits but also unused TFSA contribution room, the short-term rate might be worth it. Simply withdraw the cash after 3 months, out of TF status, and deposit into another financial institution under your existing extra TFSA contribution room. You'd get the rest of your contribution room back the following year.
-RetirEd  

Why would any person, with significant deposits, have unused contribution room?

January 14, 2021
7:58 am
RetirEd
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Usually because they have recently come into some money, or they've had to remove some money in the past for expenses or losses. Perhaps other scenarios. Certainly for people just beginning to think about long-term saving and tax planning.
-RetirEd

January 14, 2021
8:10 am
dougjp
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Vatox said

Why would any person, with significant deposits, have unused contribution room?  

Another scenario exists right now, and has for several months, the widely discussed promo offers on regular savings (EG; Simplii, Tang). In other words, the ability to earn more after tax on deposits outside a TFSA than within a TFSA (talking about those who planned ahead and withdrew from their TFSAs prior to the end of 2020).

Then there's the added benefit of not being "trapped" in someone's TFSA for the majority of 2021 when what are most likely very short term TFSA promo rates end. The meaning of 'trapped' in this sentence is (a) avoiding TFSA transfer fees, or (b) having to suffer with possibly inferior rates for the remaining months of 2021 before getting out of there, or (c) having to withdraw and pay tax on deposits for that time to seek better rates elsewhere.

The person with funds waiting to go back into TFSAs when THEIR regular savings promos end can survey the market in the meantime and has the freedom to decide where the funds will go.

Please write your comments in the forum.