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EQ Bank - 3.33 % for 3 month GIC
November 6, 2018
6:04 am
rfdm4g4g9
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https://www.eqbank.ca/personal-banking/gics

3..33 % for 3 month GIC with EQ bank.

Very good rate, plus NO long term commitment. More than the rate I like the short 3 month term, in today's rising rate environment.

Good for tax deferral also, as interest will come next year, so no taxes this year.

I won't hesitate to put more than the CDIC insured $ 100,000 as 3 month GIC is a short term, so not too risky, can withdraw after that, unless they extend the rate.

November 6, 2018
6:20 am
Norman1
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DBRS currently gives Equitable Bank a debt rating of BBB with a stable trend.

That's a bit risker than a provincial government bond. Lowest rated provincial governments are Newfoundland and PEI at A(low), two notches higher on the rating scale.

Estimated risk is about the same as BCE bonds, which also have the BBB rating.

November 6, 2018
8:23 am
Loonie
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I would buy this if they offered joint ownership, but they don't.

I wouldn't go over CDIC limits though, even if I did buy. When a financial crisis occurs, you often don't get any notice to speak of, so you are just as stuck with 3 months as you would be with 5 years.

November 6, 2018
8:30 am
savemoresaveoften
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put in under $100k and CDIC insured. Thats my strategy with online banks in general (with the exception of Simplii and Tangerine)

November 6, 2018
12:13 pm
rhvic
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Yes, this rate looks really good for a short term deal. I just transferred from another FI to EQ today but their policy is a five day hold period before it can be used to buy the GIC. In a chat with an EQ rep, they could not guarantee the offer would last very long - hence it may expire by the time my funds are available! That would not be optimal of course, and would then just make me transfer it back to the other FI where the normal HISA rate is better than EQ's. EQ would not currently guarantee I could get this GIC rate.

For those who have bought the GIC, can you tell us what maturity options you were given? Can the funds go to cash, or do they try to automatically rollover into another GIC?

November 6, 2018
2:34 pm
hwyc
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While going thru the online process, I don't remember being asked about maturity options. Now looking at my details, it is "Paid at maturity" (back to the EQ Saving Plus account where the funds come from)

November 6, 2018
5:33 pm
Save2Retire@55
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Great. Thanks.

November 6, 2018
7:13 pm
User230
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This is probably a reaction to the Simplii offering. Last year, I think they were caught off guard by it. This year they saw the deposits move to Simplii.

This was their response. Last year they didn't have a response. Their website crashed and people were upset. It was a system reaction to what it thought was a run on the bank.

It's a good reaction. They will probably end it when they get enough people coming back to them. It's going to be hard though. A 0.18% difference that is locked in instead of free flowing is a hard sell for most. Since I don't have Simplii it's a good option to have the GIC.

It's a 45 dollar difference on 100,000.

I don't think they will keep it going. They will keep it going as long as Simplii has this promo. Although they are no longer the leader for savings accounts. They might keep it going but at a lower rate once Simplii reduces their rate.

November 6, 2018
7:26 pm
Norman1
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rhvic said
… I just transferred from another FI to EQ today but their policy is a five day hold period before it can be used to buy the GIC. In a chat with an EQ rep, they could not guarantee the offer would last very long - hence it may expire by the time my funds are available!…

I would have thought EQ Bank would somehow be able to, in effect, transfer both the funds and the five-day hold on the funds to the three-month GIC. sf-frown

I also tried the online banking web site to see if one can fund a GIC from one of the linked accounts. Unfortunately not. One can only fund a GIC from an EQ Bank savings account.

November 7, 2018
4:22 am
Loonie
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I've always found EQ to be rigid and unfriendly, so this does not surprise me. Their attitude in general is another reason why I don't like dealing with them.

My guess would be that the rate will still be there for you in a week though.

In my experience, it's normal for incoming funds to have to go into savings first, before going into GIC. However, some other FIs might be more flexible about setting up the GIC. I know that if you transfer funds into Tangerine into a given account, they will allow you to immediately transfer them to another account, but I don't know if that would work for a GIC. They simply move the "hold" to wherever you finally deposit the money.
Meridian accepted my cheque for new funds to go into a GIC and set it up immediately, but the cheque had to first be deposited into my savings account - which makes sense, really, because a GIC is not a vehicle for cashing cheques. They did not wait for it to clear before issuing the GIC.

November 7, 2018
6:14 pm
Norman1
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Loonie said

In my experience, it's normal for incoming funds to have to go into savings first, before going into GIC. However, some other FIs might be more flexible about setting up the GIC. I know that if you transfer funds into Tangerine into a given account, they will allow you to immediately transfer them to another account, but I don't know if that would work for a GIC. They simply move the "hold" to wherever you finally deposit the money.

If EQ Bank cannot move the funds along with the "hold" to the GIC, then one will need to avoid the hold. I think that can be done by pushing funds into the EQ Bank savings account at the other financial institution instead of pulling the funds into the savings account at the EQ Bank end.

November 8, 2018
6:15 am
HISAhopper
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My fund is at HSBC and cannot be pushed to EQ. The only way is to give EQ a cheque and take the hold for 5 days. It's a deal breaker for me.

November 8, 2018
8:51 pm
Norman1
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Yes, unfortunately, one can't always push funds at the other financial institution to EQ Bank.

Interac e-transfers could be done instead. But, Interac e-transfers have modest maximums.

November 9, 2018
5:39 pm
HISAhopper
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To get 3.33% for CDIC insured limit 100K one may need 33.3 e-transfers!

November 9, 2018
5:50 pm
Primus
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Just my 2 cents - all things considered, I've decided to go for the 3.15% (Tangerine matching Simplii) rather than EQ Bank, for the following reasons:

1. Convenience. Having to pull or mobile-deposit into EQ and having a 5-day hold is a deal-breaker. Also Tangerine platform is more user-friendly.

2. Flexibility. Total liquidity vs. being locked in for 3 months. I got sucked into a 3-month GIC at 2.75% 3 months ago and certainly regret it in this environment of rising rates!

3. Security: EQ Bank is not a secure institution and I'd have to live within the 100K CDIC limit.

What do y'all think?

November 10, 2018
8:26 am
Norman1
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It is still worthwhile with the five business day hold.

7 days in savings account at 2.3% followed by 92 days in the three-month 3.33% GIC works out to 3.257% for the 99 days total.

It is also not a situation of one-or-the-other. One could commit ¼ of the funds for three months at EQ Bank at 3.33%. The remaining funds would be at Simplii or Tangerine at 3.15%.

November 10, 2018
9:37 am
canadian.100
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Primus said
Just my 2 cents - all things considered, I've decided to go for the 3.15% (Tangerine matching Simplii) rather than EQ Bank, for the following reasons:

1. Convenience. Having to pull or mobile-deposit into EQ and having a 5-day hold is a deal-breaker. Also Tangerine platform is more user-friendly.
2. Flexibility. Total liquidity vs. being locked in for 3 months. I got sucked into a 3-month GIC at 2.75% 3 months ago and certainly regret it in this environment of rising rates!
3. Security: EQ Bank is not a secure institution and I'd have to live within the 100K CDIC limit.
What do y'all think?  

I think your statement that EQ Bank is not a secure institution is a bit strong and likely misleading. EQ Bank is owned by Equitable Bank which is under the Equitable Group (EQB-T), a large profitable financial and insurance group which has been around for many decades. I would agree that Tangerine is perhaps more secure being owned by Scotiabank - but EQ Bank is likely quite secure being backed up by Equitable Bank and Equitable Group (EQB-T).

November 10, 2018
8:11 pm
jxhyao
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To say EQ bank is not secure is surely too extreme. I have full confidence on any banks (I mean banks, not other financial institutions) in Canada.

November 10, 2018
8:21 pm
HISAhopper
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Norman1 said
It is still worthwhile with the five business day hold.

7 days in savings account at 2.3% followed by 92 days in the three-month 3.33% GIC works out to 3.257% for the 99 days total.

It is also not a situation of one-or-the-other. One could commit ¼ of the funds for three months at EQ Bank at 3.33%. The remaining funds would be at Simplii or Tangerine at 3.15%.  

Thanks for the math.
3.257% for 99 days is not bad at all. I may take this route on Nov 15 , but unknown factor is the 3.33% promo may no longer be there after 7 days hold (Nov 23)

November 10, 2018
8:55 pm
Norman1
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According to HSBC Canada's FAQ on Interac e-Transfers, HSBC Interac e-transfer outgoing limits are $5,000 per day and $10,000 per week.

Perhaps, $10,000 of the money could be sent to EQ Bank on Nov. 15 and Nov. 16 by Interac e-Transfer and immediately be available to invest in EQ Bank's three-month GIC's.

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