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Push or Pull Funds - Hold Policy
March 7, 2024
9:07 am
Rail Baron
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savemoresaveoften said
EQ is the only bank that takes advantage of the interest rate spread hugely in their favor for transfer in with the intention of buying GICs. Every other FI will release the hold if one calls in.
Also unless u link them with another mainly online FI, you can not push. I am not aware if any of the big5/6/7 allow push to another FI.  

I push funds into EQ from my QTrade investment account, where I can easily obtain funds from the Big Banks through bill payment. A bit inelegant, but a no cost work around so I never have to pull funds into EQ and deal with their restrictive holds.

March 7, 2024
10:53 am
smayer97
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Bill said
boatowner2000, an EQ agent told me recently if rate drops during the hold period you can call in and they'll honour the rate on the day you initially brought it in, don't know if that's true.

....  

I have been told the same thing too....

March 7, 2024
10:56 am
smayer97
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savemoresaveoften said
EQ is the only bank that takes advantage of the interest rate spread hugely in their favor for transfer in with the intention of buying GICs. Every other FI will release the hold if one calls in.
...  

Since EQ will honour a GIC rate as of the deposit date, this boils down to a different way of doing things with the same net effect... You simply call in AFTER the hold period and they will honour the old rate. No loss... just different process, with same result.

March 7, 2024
2:07 pm
savemoresaveoften
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smayer97 said

Since EQ will honour a GIC rate as of the deposit date, this boils down to a different way of doing things with the same net effect... You simply call in AFTER the hold period and they will honour the old rate. No loss... just different process, with same result.  

Certainly not the same cuz I am lending them money for a week and only get 2.5% interest in return. The GIC rate honor does not take care of that. If they offer at least 4% like Motive , that reduce the pain but not eliminate it. What EQ does protects 100% of its interest and gain from it too.

March 7, 2024
3:12 pm
smayer97
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Ok, granted you lose a little bit of interest.... BUT not much... because you lose the DIFFERENCE on the interest between the bank account and the GIC for the hold period BUT you gain those days on the back end of the GIC. SO, the net is VERY SMALL, even with a $100K GIC, the amount is almost insignificant.

March 7, 2024
4:26 pm
RetirEd
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All the outfits are trying to nickel and dime you to death. OR poverty...

RetirEd

March 8, 2024
4:22 am
savemoresaveoften
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smayer97 said
Ok, granted you lose a little bit of interest.... BUT not much... because you lose the DIFFERENCE on the interest between the bank account and the GIC for the hold period BUT you gain those days on the back end of the GIC. SO, the net is VERY SMALL, even with a $100K GIC, the amount is almost insignificant.  

5 biz days = 7 calendar days. 3% spread on $100k = ~$57.
$57 buy me a few lunches. Maybe u r rich and think $60 is insignificant, I rather have it in my pocket.
And why would I gain it back on the back end. Just because I am forced to have a GIC end date 7 days longer does not equate to I earn it back. I can easily start a GIC at the same or better rate 7 days sooner, and chances are that rate WILL be higher than the interest rate of the bank account rate that EQ forced me into a year ago…

March 8, 2024
6:08 am
bhuc
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Did anyone get leap year interest on their GIC's ?

March 8, 2024
6:47 am
Alexandre
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savemoresaveoften said

5 biz days = 7 calendar days. 3% spread on $100k = ~$57.
$57 buy me a few lunches. Maybe u r rich and think $60 is insignificant, I rather have it in my pocket.

This math is incorrect, when you are talking about money in your pocket. Firstly, you are not losing the difference between EQ GIC and EQ HISA rate.
You are losing difference between EQ HISA rate and HISA rate of FI from where you pulled money.

Example: suppose, your $100K sits with Tangerine at its current .7% Savings interest. You pull that money to EQ. It is on hold at 2.5% interest for 7 calendar days. You are making extra 1.8% daily on these funds vs. Tangerine.

Then, you buy 1yr GIC at 5.5% and by the end of its term get paid $5,500 in interest. No matter if you bought GIC right away or 7 days from now.

Then, and only then, you could calculate true gain/loss. If, suppose, a year from now HISA interest rate everywhere is .1% and 1yr GIC is 1.5%, you actually made few dollars by having EQ delay your GIC purchase by a week.

March 8, 2024
11:01 am
smayer97
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And out of that last part, you are making up for the "lost 7 days" at the front end, on the back end... either making up or losing on the difference in rates at that time, though more likely making up. So, again, the difference will be FAR less than you are calculating.

March 8, 2024
11:37 am
savemoresaveoften
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Alexandre said

savemoresaveoften said

5 biz days = 7 calendar days. 3% spread on $100k = ~$57.
$57 buy me a few lunches. Maybe u r rich and think $60 is insignificant, I rather have it in my pocket.

This math is incorrect, when you are talking about money in your pocket. Firstly, you are not losing the difference between EQ GIC and EQ HISA rate.
You are losing difference between EQ HISA rate and HISA rate of FI from where you pulled money.

Example: suppose, your $100K sits with Tangerine at its current .7% Savings interest. You pull that money to EQ. It is on hold at 2.5% interest for 7 calendar days. You are making extra 1.8% daily on these funds vs. Tangerine.

Then, you buy 1yr GIC at 5.5% and by the end of its term get paid $5,500 in interest. No matter if you bought GIC right away or 7 days from now.

Then, and only then, you could calculate true gain/loss. If, suppose, a year from now HISA interest rate everywhere is .1% and 1yr GIC is 1.5%, you actually made few dollars by having EQ delay your GIC purchase by a week.  

First of all, $100k would never sit at Tangerine at 0.7%, so that starting point will not happen to me anyway.
My current real life situation will be $100k at Tangerine at 5.5%, and if want to lock in for a 1y EQ GIC at 5.5%, then i will lose 3% (5.5-2.5) over 7 days thanks to EQ's holding restriction. What rate I will get at day 372 from today may OR may not make it worse. If rates actually drop between day 366 and 372 for the new GIC that I would have been able to lock in, then it added to the loss.
If EQ does not have the mandatory hold, $100k will earn 5.5% day 1 to 365, then day 366 is when we find out what new rate is.
There is no upside to have EQ's mandatory hold, except by pure luck.

March 8, 2024
7:11 pm
smayer97
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You are forgetting that the day 1 to 7 that you are losing 3%, you gain for having your GIC @ 5.5% for day 365 to 372. Sure you can potentially risk losing locking a rate from day 365 to 372 BUT that argument can be used anywhere during your GIC period.

Likewise, it is highly unlikely that rates within that 7 day window will change so much that you cannot catch something very close. So again, the likelihood of losing much on the back end is not very large.

AND it can equally work IN YOUR FAVOUR, as there may not even be as good an offer on the back end because rates might have fallen significantly, causing even the bank account rate to be far lower than the current 2.5%. SO you should not get caught up with this as a concern, as "luck" can work BOTH ways.

As long as you do not lose the 5.5% GIC rate, you are actually in a very good position.

You are overblowing the actual loss.

March 9, 2024
4:50 am
Alexandre
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savemoresaveoften said

First of all, $100k would never sit at Tangerine at 0.7%, so that starting point will not happen to me anyway.
My current real life situation will be $100k at Tangerine at 5.5%, and if want to lock in for a 1y EQ GIC at 5.5%, then i will lose 3% (5.5-2.5) over 7 days thanks to EQ's holding restriction.

I'd like to point the flaw in this logic. What you described works only if you pulled money at least 7 days before Tangerine promo expiry.
In my case, I was at 6% Tangerine promo. I would time pulling my money so that it'll leave Tangerine ideally at last day of promo, to maximize promo interest income. Thus, (6%-2.5%) will not apply to me, because next day will be first day or regular Tangerine rates, which are .7%.

You can't calculate "losses" using promo interest that is no longer.

March 9, 2024
5:39 am
savemoresaveoften
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smayer97 said
You are forgetting that the day 1 to 7 that you are losing 3%, you gain for having your GIC @ 5.5% for day 365 to 372. Sure you can potentially risk losing locking a rate from day 365 to 372 BUT that argument can be used anywhere during your GIC period.

Likewise, it is highly unlikely that rates within that 7 day window will change so much that you cannot catch something very close. So again, the likelihood of losing much on the back end is not very large.

AND it can equally work IN YOUR FAVOUR, as there may not even be as good an offer on the back end because rates might have fallen significantly, causing even the bank account rate to be far lower than the current 2.5%. SO you should not get caught up with this as a concern, as "luck" can work BOTH ways.

As long as you do not lose the 5.5% GIC rate, you are actually in a very good position.

You are overblowing the actual loss.  

We can agree what happens btw 365 to 372 days can work BOTH ways. Yet I am guaranteed a loss day 1-7. I am realizing a loss and "hoping" I can make it back thru luck at the end ? Sorry I dont operate that way even tho that makes one "feels" better.

The expected loss is ~$57, not overblown.

What you and Alexandre said MAY only be true in a falling rate environment, and definitely worse off in a rising rate scenario. Math is math.

March 9, 2024
8:28 am
InterestThis
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The lesson is always be aware of HOLD times when moving around larger sums of cash.

March 9, 2024
11:49 am
smayer97
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savemoresaveoften said

...
Math is math.  

And you are ignoring some of the math. You can take a horse to water but you cannot make it drink. You can present thoughts to a person but you cannot make then think. Oh well.

March 9, 2024
3:32 pm
RetirEd
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bhuc: We all get leap year interest on terms of or over 1 year. That's regulated. Ask your financial institution about where they put the leap day - at start of year or end of February. Short/long terms have different policies. I went over this with a few of my GOC holders last month.

Alexandre: I will emphasize your point: 5 business days will equal 7 days in almost all cases, because there are only 5 business days in a week and transfers cannot be pinned to an exact date. Holidays worsen this, as one can't have a 5-day stretch in a 4-day week.

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July 4, 2024
3:17 pm
hwyc
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hwyc said
I followed HermanH's lead (post #3) with my Tangerine just this past April. Two micro-deposits is sent from Tangerine for verification. In addition to using Interac, I now also have a 2nd path to skip the dreaded EQ holding period! sf-cool  

Think I walked a 3rd path without realizing.

Looking at last month's statement, I loaded $100 to my EQ bank card directly from my linked account & spent it the same day, so I think it is a no hold. That said, I could have transfer it from EQ bank card back to EQ Savings instead.

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