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Saving account limit increase + number of GICs increase
September 25, 2018
1:34 pm
jerryzxliu
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Received an email from EQ Bank today, stating "maximum balance held (in Saving Plus Account) per customer is now $200,000", and "maximum number held per customer is now 20 (total GIC investment limit is $500,000 and this limit remains unchanged)"

September 25, 2018
1:50 pm
Loonie
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Interesting, but who really needs to deposit more money with a lower-tier bank? What we need from them is the ability to hold joint accounts in order to increase CDIC coverage.
I won't be depositing more money there because of this change. In fact, I have moved most of it out already, to sunnier pastures.sf-smile

September 25, 2018
6:09 pm
User230
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I wouldn't put over 100,000 just based on the fact that it's not insured over 100,000 by the CDIC.

They dabble in a business that can be volatile. It's unlikely though to go under.

September 26, 2018
4:51 am
canadian.100
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Loonie said
Interesting, but who really needs to deposit more money with a lower-tier bank? What we need from them is the ability to hold joint accounts in order to increase CDIC coverage.
I won't be depositing more money there because of this change. In fact, I have moved most of it out already, to sunnier pastures.sf-smile  

User230 said
I wouldn't put over 100,000 just based on the fact that it's not insured over 100,000 by the CDIC.

They dabble in a business that can be volatile. It's unlikely though to go under.  

EQ Bank is fully owned by the very profitable, long established Equitable Group (EQB-T on the TSX). I would say the risk of depositing in EQ Bank is extremely low - probably lower than depositing with the Manitoba credit unions, even with their "non-government backed unlimited guarantee".

September 26, 2018
6:32 am
NorthernRaven
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As a publicly traded alternative-mortgage company, Equitable Group is very similar to Home Capital (the Oaken folks), who had their very public issues recently. That's not to say either is running significant risks of going insolvent and being unable to pay out non-CDIC balances, but it is certainly something to prudently think about. Certainly in the heavily hypothetical "what-if" game, I'd be more worried about non-CDIC balances at EQ/Home, rather than the Manitoba CU system going bust.

September 26, 2018
10:17 am
AltaRed
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I agree Equitable Group is in the same business as Home Capital Group. Stay within CDIC insured limits.

I finally relented and opened a Savings Plus account over the past few days to take advantage of their interest rate for my cash*. New regulations as discussed on the EQ Bank website has made opening a new account a breeze. Simple online application, simple identification validation and simple method to establish external bank transfer connections. Fully operational in about 48 hours.

* Cash only and under $100k total in my entire portfolio.

September 26, 2018
11:09 am
canadian.100
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Just wondering - would anyone here exceed CDIC limit for
Tangerine and Simplii? (not that their interest rates are that great anyways!)

September 26, 2018
12:03 pm
Norman1
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canadian.100 said
Just wondering - would anyone here exceed CDIC limit for
Tangerine and Simplii? (not that their interest rates are that great anyways!)  

I have with Simplii Financial. Simplii-branded deposits are actually CIBC deposits.

I wrote earlier that uninsured deposits of CIBC are estimated to be about the same risk as provincial bonds.

September 26, 2018
12:09 pm
AltaRed
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Tangerine and Simplii are divisions/affiliates of big 5 banks. They'd never let Tangerine and Simplii default...unless Scotia and CIBC are going under themselves. It is the same with CIPF limits with their discount brokerages.

The reputational damage would be non-recoverable. I have never had an issue with being 'over the top' with the big 5.

September 26, 2018
12:12 pm
Koogie
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canadian.100 said
Just wondering - would anyone here exceed CDIC limit for
Tangerine and Simplii? (not that their interest rates are that great anyways!)  

I have done it. Unless your intestinal fortitude is a helluva lot greater than mine, I would not advise it.

I had some tense moments with Oaken until Uncle Warren stepped up the plate last year.

I would spare others that anxiety.

September 26, 2018
1:00 pm
Norman1
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NorthernRaven said
As a publicly traded alternative-mortgage company, Equitable Group is very similar to Home Capital (the Oaken folks), who had their very public issues recently. … 

Similar businesses but very different risk profiles.

Equitable Bank (behind EQ Bank-branded deposits) currently has an investment grade DBRS rating of BBB. Details are in July 13 press release DBRS Confirms Ratings of Equitable Bank, Stable Trends.

In contrast, Home Trust Company (Oaken-branded deposits) currently has a non-investment grade rating of BB(low) that is four steps lower. Details are in March 1 press release DBRS Upgrades Ratings of Home Capital Group Inc. and Confirms Ratings of Home Trust Company, All Trends Stable.

September 26, 2018
1:05 pm
savemoresaveoften
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canadian.100 said
Just wondering - would anyone here exceed CDIC limit for
Tangerine and Simplii? (not that their interest rates are that great anyways!)  

Very different animal. If you are fine with over $100k in your CIBC or BNS account, you should feel equally fine with Tangerine and Simplii.
If anything Tangerine deposit is count as separate from BNS, while Simplii is essentially CIBC. In other words, 50k at Simplii and 50k at CIBC and you are already at the CDIC limit of $100k

September 26, 2018
2:24 pm
NorthernRaven
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Norman1 said

NorthernRaven said
As a publicly traded alternative-mortgage company, Equitable Group is very similar to Home Capital (the Oaken folks), who had their very public issues recently. … 

Similar businesses but very different risk profiles.

Equitable Bank (behind EQ Bank-branded deposits) currently has an investment grade DBRS rating of BBB. Details are in July 13 press release DBRS Confirms Ratings of Equitable Bank, Stable Trends.

In contrast, Home Trust Company (Oaken-branded deposits) currently has a non-investment grade rating of BB(low) that is four steps lower. Details are in March 1 press release DBRS Upgrades Ratings of Home Capital Group Inc. and Confirms Ratings of Home Trust Company, All Trends Stable.  

That's only after Home's problems hit the fan. At the beginning of 2017, DBRS had Home Trust at BBB (high) and the parent Home Capital Group at BBB. All I'm saying is that if one is grading unlikely hypotheticals, either Home or Equitable, whatever their individual differences, are rather more likely to have "interesting" things happen, than the entire Manitoba CU system taken as a whole.

September 26, 2018
2:34 pm
Loonie
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Norman1 said

In contrast, Home Trust Company (Oaken-branded deposits) currently has a non-investment grade rating of BB(low) that is four steps lower. Details are in March 1 press release DBRS Upgrades Ratings of Home Capital Group Inc. and Confirms Ratings of Home Trust Company, All Trends Stable.  

March 01 is a long time ago in this business, with this particular institution.

September 26, 2018
3:51 pm
Bill
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It's been noted here before: CIBC/Simplii are part of the same corporate entity, they are one, so it would take a single failure of CIBC/Simplii to cause depositors problems. It's why Simplii isn't listed under CDIC, just CIBC.

BNS and Tangerine are separate entities, each listed separately under CDIC, it's technically possible for one to fail and not the other. Obviously BNS would not want a subsidiary to fail, reputational damage would be maybe fatal to it, but it theoretically is possible for one to fail and not the other.

If I remember right, wasn't there a British bank that had been around for 250 years or something that failed a few years ago?

September 26, 2018
5:46 pm
Londonguy
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Bill said

If I remember right, wasn't there a British bank that had been around for 250 years or something that failed a few years ago?  

I suspect you're thinking of Northern Rock (oh, the irony). One of the harbingers of the global financial crisis that followed --

https://en.wikipedia.org/wiki/Northern_Rock

September 26, 2018
7:34 pm
Loonie
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Perhaps you were thinking of Baring's, founded 1762. It was allegedly brought down by one person's foolishness.
https://en.wikipedia.org/wiki/Barings_Bank

September 26, 2018
9:54 pm
Norman1
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Loonie said

March 01 is a long time ago in this business, with this particular institution.  

It isn't really a long time for the factors DBRS is looking at: Home Trust's market share and Home Trust's funding cost.

…Despite the progress, DBRS remains cognizant that HCG has lost market share and has higher-than-peer funding costs and that the new rules around mortgage underwriting might impede growth.

The recovery from near death is not as quick as the trip down!

September 26, 2018
10:12 pm
Norman1
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Bill said

BNS and Tangerine are separate entities, each listed separately under CDIC, it's technically possible for one to fail and not the other. Obviously BNS would not want a subsidiary to fail, reputational damage would be maybe fatal to it, but it theoretically is possible for one to fail and not the other.

There won't be any lasting reputational damage. BCE walked away from subsidiary BCE Development years ago amid widespread belief that BCE too would support its wholly owned subsidiaries.

No-one thinks any less of BCE these days except maybe some of those misinformed BCE Development shareholders.

Reputation has a price. It may be worth more than $5 million. But, that doesn't mean it is worth $50 billion.

September 26, 2018
10:31 pm
Norman1
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NorthernRaven said

That's only after Home's problems hit the fan. At the beginning of 2017, DBRS had Home Trust at BBB (high) and the parent Home Capital Group at BBB. All I'm saying is that if one is grading unlikely hypotheticals, either Home or Equitable, whatever their individual differences, are rather more likely to have "interesting" things happen, than the entire Manitoba CU system taken as a whole.

I think that BBB(high) rating has not been restored because Home Trust has not fully recovered yet from the damage done by that smear campaign against them in 2017.

Unfortunately, none of the Manitoba credit unions or their deposit guarantor DGCM have a debt rating. So, I don't know if the likelihood is actually better or about the same.

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