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Savings Plus 1.50%
April 13, 2022
3:46 pm
dougjp
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smayer97 said
You misunderstand. The strategy is to wait for the hold to lift, buy the GIC at the then current rate (presumably a lower one), contact EQ to get them to honour the previous GIC rate (presumably a higher one) by showing them the funds were in your account in time for that purpose.

You can call ahead to confirm if they still do this.  

They do this. How they do it (as I experienced less than a month ago) is as follows.

You phone in, mention it, no hassle except the contact has to refer it to get the rate. Not long after, I was contacted by e-mail confirming they paid the difference in interest to my savings account, up front. So, minor as it may be at current rates, I'm getting a tiny bit better overall rate by earning savings account interest on that differential.

" We may never pass this way again " - Seals & Crofts

April 14, 2022
7:14 am
pianoman8849
Halifax, NS
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Now that the interest rate has gone up another 1/2 percent, will be interesting to see if Eq and others raise their HISA rates to reflect that. If so, I might consider upping my balance with them.

April 15, 2022
3:01 am
cgouimet
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I didn't see any announcement but EQ also increased their GIC rates in the last few days ...

1-Yr 2.60% -> 2.90%
2-Yr 3.30% -> 3.55%
3-Yr 3.65% -> 3.75%
4-Yr 3.65% -> 3.85%
5-Yr 3.70% -> 3.85%

CGO
April 15, 2022
7:03 am
Jim Sherat
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Wow, that's something like 5 increases in less than a month !
The HISA increase to 1.50% makes it a bit less painful, waiting to lock in our TFSA funds in a ladder strategy, but getting tempting to pull the trigger on at least a portion of it. Unlikely EQ will pull back the rates, but you never know.

April 15, 2022
7:20 am
pianoman8849
Halifax, NS
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cgouimet said
I didn't see any announcement but EQ also increased their GIC rates in the last few days ...

1-Yr 2.60% -> 2.90%
2-Yr 3.30% -> 3.55%
3-Yr 3.65% -> 3.75%
4-Yr 3.65% -> 3.85%
5-Yr 3.70% -> 3.85%  

These are good, but at age 72, locking into a GIC isn't in the cards for me. I hope the regular HISA gets in the 2+ per cent range soon. I remember the 3.2 days..:)

April 17, 2022
5:11 am
Jim Sherat
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pianoman8849 said

These are good, but at age 72, locking into a GIC isn't in the cards for me. I hope the regular HISA gets in the 2+ per cent range soon. I remember the 3.2 days..:)  

As I'm a bit older than you, I'm curious as to your reasoning why GICs with much better rates now, are "not in the cards" for you ? With my wife, we purchase Joint Ownership GICs, unregistered, and individual GICs, including 5-yr ladder strategy, inside our TFSAs. Upon death, they become "unlocked" so principal and accrued interest should pass seamlessly to the spouse, beneficiary, or estate, if supporting paperwork is in place. In the meantime simple interest earned can act as a nice income supplement, while the principal is 100% safe. Perhaps I'm missing something ?

April 17, 2022
8:47 am
AltaRed
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It is common, but not a certainty, that all GICs can be 'matured' upon death to principal plus accrued interest without an admin fee or penalty, nor is it a certainty that individual GICs can be transferred intact to a beneficiary seamlessly. One has to check with each institution to be certain of the mechanics in event of death.

One example of an "admin fee" was several years ago when I was executor of an estate. RBC Direct Investing discount brokerage provided 2 choices to 'monetize' GICs: 1) pay a $100 fee per GIC to mature the GIC plus accrued interest, or 2) sell on the secondary market which is a non-starter.

IOW, one must check with each FI to be certain. Lastly, as has been discussed, management of a GIC portfolio takes work. For estate planning purposes, some do not want to burden a POA or an Executor with the task of dealing with a bucket full of GICs. My ex-spouse, my current spouse and I, who are all in our early to mid-70s, are all winding down our bond/GIC ladders in our RRIFs for this reason and moving to ETFs. It also allows us to annuitize some, or all, of the GICs in our RRIFs if/when interest rates rise high enough to make annuitization worthwhile.

April 17, 2022
9:36 am
Loonie
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I have not been able to find where FIs publish their policy on redeeming GICs in event of death of single owner non-registered. If anyone knows, please tell.
In an estate I had something to do with, executor was given option to let the GIC run to maturity, which was done because it was advantageous to do so. I think but am not certain that this was with RBC; 2010.
In the absence of such published info or my inability to find it, I have been asking the question by email. However, no matter what they say or what the policy may be, it is all subject to change and you won't have any say in that change.

GICs are only time-consuming to deal with if you move them around; if you just let them roll over, they require no work at all - and this path of least resistance is what a POA is likely to follow, not to mention that some FIs won't let you do squat anyway. But I do agree that there comes a point where five year ladders may no longer make sense, and one might want to gradually reduce the length and consider some annuities. I have a tentative plan that when the younger of us reaches 75, and in the absence of serious health issues, we will start shortening the ladders - but it's hard to give up the higher rates! In the meanwhile we are transitioning non-registered GICs to joint ownership; there is only one more left now, which matures next year.

I am curious what ETF you have found that mimics portfolio of GICs.

April 17, 2022
10:04 am
Norman1
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I've seen that redeemable-on-death privilege in the terms and conditions of some GIC's. For example, this is from Oaken:

34. REDEMPTION PRIOR TO MATURITY DATE

A Non-Redeemable Guaranteed Investment Certificate (GIC) is not redeemable prior to the maturity date.

A Cashable GIC is fully or partially redeemable (minimum $1000 redemption request accepted and $1000 must be maintained in the Investment) prior to the Maturity Date only after the redemption eligibility period indicated on the Investment application form has been met.

A Non-Redeemable Short Term GIC is not redeemable prior to the maturity date.

… Notwithstanding the above, redemption prior to maturity may be permitted by us without penalty in the event of the death of a sole Owner who was a Canadian Resident within the meaning of the Income Tax Act (Canada) at the time of death, or was a non-resident of Canada at the time of death, if the original term of the Investment was for less than five (5) years. …

The EQ Bank GIC agreement doesn't have the privilege. It just says the executor has the same rights as you:

Upon your death or incapacity, we are authorized to take steps or restrict transactions to your GIC which we deem prudent or advisable. In all cases, you (or your estate) will continue to remain responsible for any transaction relating to your GIC. Your estate representative will have the same rights, responsibilities and obligations under this GIC Agreement as you, the GIC Holder, unless we determine otherwise.

April 17, 2022
10:38 am
AltaRed
BC Interior
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Loonie said
I am curious what ETF you have found that mimics portfolio of GICs.  

There isn't a direct equivalent that I know of, but an imperfect example is a short term bond ETF with a duration in the range of 2.5-3 years, similar to that of a 5 year GIC ladder. One with A+ credit quality bonds won't provide the same yield as a GIC ladder since high quality bonds typically have lower yields AND there will be a 10bp or so MER, but it is a 'liquid' substitute for a GIC ladder which is of some estate value in one's most senior years.

My ex has XSB which contains some BBB corporate bonds while I have cheated with VCNS, a 40/60 asset allocation ETF. Cheating because of the equity component but I don't have the stomach for a simple bond ETF.

Per Norman1's post, the landscape is fraught with a wide range of potential 'rules' when it comes to redemption of GICs upon death and as you suggest, the rules can change as well.

April 17, 2022
4:29 pm
dougjp
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Norman1 said
I've seen that redeemable-on-death privilege in the terms and conditions of some GIC's. For example, this is from Oaken:

34. REDEMPTION PRIOR TO MATURITY DATE

A Non-Redeemable Guaranteed Investment Certificate (GIC) is not redeemable prior to the maturity date.

A Cashable GIC is fully or partially redeemable (minimum $1000 redemption request accepted and $1000 must be maintained in the Investment) prior to the Maturity Date only after the redemption eligibility period indicated on the Investment application form has been met.

A Non-Redeemable Short Term GIC is not redeemable prior to the maturity date.

… Notwithstanding the above, redemption prior to maturity may be permitted by us without penalty in the event of the death of a sole Owner who was a Canadian Resident within the meaning of the Income Tax Act (Canada) at the time of death, or was a non-resident of Canada at the time of death, if the original term of the Investment was for less than five (5) years. …

The EQ Bank GIC agreement doesn't have the privilege. It just says the executor has the same rights as you:

Upon your death or incapacity, we are authorized to take steps or restrict transactions to your GIC which we deem prudent or advisable. In all cases, you (or your estate) will continue to remain responsible for any transaction relating to your GIC. Your estate representative will have the same rights, responsibilities and obligations under this GIC Agreement as you, the GIC Holder, unless we determine otherwise.

  

Until EQ eventually joins the business of joint accounts in its entirety, I restrict GIC expiries with them to a maximum of 9 months, because of the joint account money having to go into an individual name when created. So, I have no intention of advising EQ if the GIC holder dies, because at expiry the funds all automatically go to the joint savings account anyway.

" We may never pass this way again " - Seals & Crofts

April 17, 2022
5:41 pm
Bill
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If a joint holder of an account dies isn't there a requirement for the other account holder or executor to notify the bank that there can no longer be that joint account? For example, the Ontario gov't website says "If you are the executor, you will need to:.......inform the person’s banks and financial institutions of the death....."

April 18, 2022
4:36 am
dougjp
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Bill said
If a joint holder of an account dies isn't there a requirement for the other account holder or executor to notify the bank that there can no longer be that joint account? For example, the Ontario gov't website says "If you are the executor, you will need to:.......inform the person’s banks and financial institutions of the death....."  

Yes, but I'm not aware this has to be done immediately, or that there is some sort of time limit.

This reminded me that I haven't got a reply from EQ when I wrote several months ago, and will follow up today.

" We may never pass this way again " - Seals & Crofts

April 22, 2022
5:30 am
Jim Sherat
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doug, I'm very interested in the outcome of your communication with EQ ...

My wife and I have a significant portion of our TFSA funds with them, and would like to know Exactly, their policy and procedures, sequence of events, timing, etc. to facilitate the Transfer of a deceased spouse's TFSA, to the surviving spouse, and may include both locked in GICs, and HISA.

Your comment re still waiting "several months" for a reply is a Big Red Flag for me.
thanks

April 22, 2022
5:44 am
dougjp
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Jim Sherat said
doug, I'm very interested in the outcome of your communication with EQ ...

My wife and I have a significant portion of our TFSA funds with them, and would like to know Exactly, their policy and procedures, sequence of events, timing, etc. to facilitate the Transfer of a deceased spouse's TFSA, to the surviving spouse, and may include both locked in GICs, and HISA.

Your comment re still waiting "several months" for a reply is a Big Red Flag for me.
thanks  

So far, unlike other times with EQ, this has been a "one way" communication! My follow up e-mail was sent April 18.

" We may never pass this way again " - Seals & Crofts

June 8, 2022
6:42 am
pianoman8849
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Now that the Bank of Canada has increased interest rates another 50 basis points last week, myself, like many, are waiting for EQ's next move on HISA account interest rates. With inflation the way it is and the Bank Of Canada increasing interest rates quite substantially over the next year, we should start seeing quite a larger return on our investment with EQ.

June 8, 2022
10:30 am
Norman1
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pianoman8849 said
… With inflation the way it is and the Bank Of Canada increasing interest rates quite substantially over the next year, we should start seeing quite a larger return on our investment with EQ.

EQ Bank may not be that interested in attracting HISA and other short term deposits right now.

They've dropped their 3-month GIC to 1.6%. That trails the 2% TD and CIBC are offering on 1-year cashable GIC's that are cashable after 30 days.

June 8, 2022
1:13 pm
AltaRed
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I tend to agree with Norman1. It may well be the biggest demand for loans right now is folks locking in fixed rate mortgages for certain terms. If so, it isn't HISA money EQ would want for that.

June 8, 2022
1:37 pm
JohnnyCash
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I would agree that EQ and other banks would prefer to have GIC fixed term deposits, especially when considering folks that require mortgage refinancing likely wanting to go fixed. HISA rates will likely have to increase if there are insufficient GIC deposits.

June 8, 2022
1:43 pm
cgouimet
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JohnnyCash said
I would agree that EQ and other banks would prefer to have GIC fixed term deposits, especially when considering folks that require mortgage refinancing likely wanting to go fixed. HISA rates will likely have to increase if there are insufficient GIC deposits.  

I think that might be why HISA rates aren't moving up as quickly as we'd like ... Too many sitting in HISA's and short GIC's waiting for long GIC's to go higher ... It's all Dean's doing ... 🙂

CGO
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