EQ Bank - 2.50% Interest Rate | Page 2 | EQ Bank | Discussion forum

AltaRed said

That is not quite true. ISAs are deposit accounts. When I buy units, they are deposits to the underlying holding of the ISA. When I sell, they are withdrawals to the underlying holding of the ISA. It is no different than 10,000 consumers depositing or withdrawing from a HISA.

EQB1000 units are Equitable Bank/EQ Bank deposits The sale/purchase of EQB1000 units directly affects the amount on deposit at EQ. The same would be true of DYN6004 which are deposits of Scotiabank.

They are not actively managed 'trusts' like money market mutual funds or Cash ETFs which may hold the commercial paper of numerous entities.  

We're all speculating here.

The point is that EQ and many other FI's "price" their ISA, HISA and GICs pools differently. Each price is what they feel is best for each of these three markets to meet their overall funding objectives/needs.

Kinda like Galen has 1kg Kraft Peanut Butter jar regular price at $7.99 at Loblaws, $6.29 at NoFrills and $6.99 at SuperStore ...

AltaRed said
It does not matter that they price their products differently for different sets of customers. That is what Norman1 and I (and some others) have been saying all along. FIs choose where they want to get their funds from and price accordingly.

It does not change the fact that ISAs are still simply deposit accounts that directly affect the liabilities of the FI sponsor like an HISA, and are as liquid as HISAs.

There is no such thing as investor A selling ISA units to Investor B like they would ETFs and/or stock float.... unless you think your deposit to EQ Bank might specifically fund the EQ Bank withdrawal by Investor B. ISA=HISA and HISA=ISA from a balance sheet perspective.  

Venting or would knowing why change your investment decisions?