Push or Pull Funds - Hold Policy | Page 2 | EQ Bank | Discussion forum

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.

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.

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.

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…

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.

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.

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.

The lesson is always be aware of HOLD times when moving around larger sums of cash.

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.