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EQ Bank - 3.33 % for 3 month GIC
November 10, 2018
9:12 pm
Norman1
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canadian.100 said

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.…

Equitable Bank has an $850 million backstop until June 2019. If anything did occur, it would have to be much bigger than $850 million to be fatal.

This is from the June 2018 press release Equitable Bank reduces size of secured backstop facility:

…. Equitable has not drawn upon the facility and does not anticipate using it prior to its expiry on June 18, 2019. The original facility was put in place in June 2017 in response to funding market disruption caused by a liquidity event at another financial institution. We thank all of the banks in the syndicate, which includes Bank of Montreal, CIBC, National Bank, The Royal Bank of Canada, Scotiabank and The Toronto-Dominion Bank for their ongoing support of Equitable.

November 12, 2018
7:29 am
Yatti420
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I took advantage of this offer.

November 13, 2018
5:31 am
Bruford
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5 business day hold is pure BS. I deposited on the 6th of November. After 5 days, I called and EQ told me my money will not clear till the 15th. To me that is 7 business days, and 9 low interest days.

November 13, 2018
5:58 am
Kidd
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Deposit amount x interest rate / 100 / 365 x days of interest lost = interest lost

So say.

$100,000 x 3 / 100 / 365 x 9 days of interest lost = $73.97

Now a hold, normally means your money is being held. It should still make interest. Where was the money held?

November 13, 2018
6:20 am
JW
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During the 5 business day hold (7 day hold including weekend) EQ pays 2.3% interest on your deposit each day. When the hold is cleared buy the GIC and get 3.33% for 3 months. What's the big deal? It is a minor 7 day penalty when Tangerine is only paying me 2.5% going ahead. In the next 3 months I will be well ahead on interest received.

November 13, 2018
7:31 am
Norman1
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Bruford said
5 business day hold is pure BS. I deposited on the 6th of November. After 5 days, I called and EQ told me my money will not clear till the 15th. To me that is 7 business days, and 9 low interest days.  

The five business days starts the business day after the day of deposit. TD Canada Trust does it the same way.

Remembrance Day fell on a Sunday this year. So, Monday, November 12 was not a business day for federally-regulated companies, like the chartered banks.

As a result, the funds will be held for these five business days:

  1. Wednesday, November 7
  2. Thursday, November 8
  3. Friday, November 9
  4. Tuesday, November 13
  5. Wednesday, November 14
November 13, 2018
9:29 am
rhvic
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I too have not yet been able to get the GIC, as my funds have been deposited on Nov. 6 but will not be available till Nov. 15, as others report. Yes, one does get 2.3% meanwhile, but my concern is that they withdraw the 3.33% rate offer before Thursday.

November 13, 2018
12:04 pm
Rick
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Weird. My other bank keeps it on hold but let me use it to open a GIC. They still have it, just in a GIC and not savings. Note that if you push out of your other bank there is no hold, only on pulls. Never taken out a GIC @ EQ. Can't you set it up today to open after the hold to guarantee the rate?

kidd.... hate to disagree with your math, but since you are getting 2.3% while it is sitting in HISA, the difference is 1.03% for 9 days, which I calculate to $25.39 difference on 100K.

November 13, 2018
12:29 pm
Kidd
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Hi Rick, My math is sound. I knew the held money would be put into a savings account, i just had no idea what that savings rate would be. It sounded like the poster was angry because their money was going to held be in limbo, earning 0%. Therefore i stated what $100,000 would lose at 3% for 9 days. By the way, Limbo is just north / east of Oz. I spent a week there one afternoon.

November 13, 2018
12:42 pm
rhvic
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Rick, I asked if I could open a GIC today with some cash available in the account and add to it once the hold was off - I was told that was not possible. And also I could not move the 'hold' to the GIC.

November 17, 2018
10:21 am
rhvic
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I was finally able to buy the GIC at EQ on Thursday, Nov. 15. This after the hold initiated after my original transfer to EQ on Nov. 6. The long weekend is blamed for the delay.

November 17, 2018
8:31 pm
Norman1
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Glad to read that you were able to take advantage of the three-month 3.33% GIC offer.

The way EQ Bank has set up their GIC's is rather odd. Each GIC has an account number like their Savings Plus account. But, the GIC's are don't seem to be self-sufficient accounts. The GIC's need to be attached to a savings account.

According to their GIC agreement, one is required to maintain a savings account for the term of the GIC under possible penalty of early termination of the GIC and loss of all GIC interest:

Should, for whatever reason, the decision be made to close your EQ Bank Savings Plus Account, or should you fail to maintain your status as sole account holder of your EQ Bank Savings Plus Account, we may, at our option, terminate your GIC and pay to you the principal amount owed in connection with the GIC by cheque mailed to the most current mailing address that we have on file for your EQ Bank Savings Plus Account or, prior to your EQ Bank Savings Plus Account being closed, by transfer to that account. No interest will be paid to you in connection with the terminated GIC and we will recover any interest amounts that may have been paid to you by deducting those amounts from the principal balance of the GIC.

One can't fund a GIC from one of the linked accounts. Only from cleared funds from one of their savings accounts.

Not sure why one couldn't use funds in a savings account that are still in a five business day hold. No-one at EQ Bank noticed that funds in a three-month GIC would be tied up for much longer than the original five business days? sf-frown

November 17, 2018
9:01 pm
NorthernRaven
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The system is probably programmed so that the funds on hold can't exit the account, and there isn't an exception for exiting to another internal account like the GIC. Also, they'd have to program the ability to unwind with proper tracking a GIC if the hold money that funded it evaporated. Probably not hard by itself, but if the GIC was funded with money that was partly on hold and partly not, what happens? Unwind part of the GIC? All of it?

Nothing insuperable to overcome, but easier to leave things as is, and mildly annoy a few customers.

November 18, 2018
4:33 pm
Norman1
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I think EQ Bank would have procedures already to deal with the situations described. A preauthorized debit or cheque can still bounce after the five business day hold has passed.

According to Payments Canada Rule A4 (Returned and Redirected Items​), the time limit for NSF is short: "no later than the Business Day following receipt by the first organizational unit of the Drawee that is able to make or act upon a decision to dishonour the Item."

But, an altered cheque can be bounced, for material alteration, as late as 90 calendar days later. A cheque with a forged endorsement can be bounced as late as six years later.

November 19, 2018
5:27 pm
HISAhopper
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There are good reasons on their side for not allowing money on hold to buy the GIC's, however they could have advertised the time frame of the 3.33% GIC so people can plan accordingly. I missed out a large deposit as I did not and still do not know when the 3.33% ends.

December 15, 2018
6:30 am
Norman1
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Looks like the 3.33% rate on their three-month GIC's is over.

This morning, their three-month GIC is down to 2.35%.

December 15, 2018
9:15 am
ertyu
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Norman1 said
Looks like the 3.33% rate on their three-month GIC's is over.

This morning, their three-month GIC is down to 2.35%.  

Doh, I was just waiting for my transfer to clear to buy one

December 15, 2018
11:36 am
Vatox
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Got mine, barely made it.

December 15, 2018
12:55 pm
yalewon
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ertyu said

Doh, I was just waiting for my transfer to clear to buy one

I was on the same boat as you. Deposited two cheques on Dec 7th. Fund was cleared on Dec 15th and found out the 3-month GIC promotion is gone.

Initiated an online chat with EQ bank and the representative was very helpful. He said he would make a one-time exception for me since the fund was transferred in before the promotion ended. He asked me to purchase 3-month GIC at the current rate (2.35%), and put a note on my account. He promised the rate will be revised to 3.33% by a week or so. I screenshot all the conversation as a record.

I suggest you do the same once your fund is cleared.

December 15, 2018
5:08 pm
Loonie
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There is no reason why they have to wait any time at all when it is a direct transfer from another FI.
In the unlikely event that something went wrong, and the originating FI sent money that you didn't really have, the transfer-in would be quickly nullified, whether it was in a savings account or a GIC.
If they feel they must put on a "hold", it need only apply to funds you are transferring out after having just transferred them in. I'm sure their programmers are perfectly capable of handling that tweak, but there is no will to do so. They prefer to inconvenience us.

I really can't stand EQ, for a number of reasons, but was willing to hold my nose for 3 months. My funds are now caught in limbo, so I now have the additional inconvenience of having to spend time chatting with them and monitoring them to make sure they give me what they agree to.

Bring on the competition! The more FIs, the merrier!

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