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The bloom's off the EQ rose
September 2, 2016
12:01 pm
Barb.
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February 23, 2016
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First, two interest rate downgrades and now they've discontinued the Birthday Bonus. Another rate downgrade and there'll be no reason to stay.sf-frown

September 2, 2016
4:35 pm
AltaRed
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Next move will be to drop to Alterna's 1.95% and then both will eventually drop to Oaken's 'best' rate. There is no reason for them to incur higher costs than their competition once they get the deposits they want.

September 2, 2016
11:44 pm
Loonie
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I'm afraid AltaRed is right - at least until the next upstart comes along and they start to lose their deposits. I think we can expect that they will all have spurts where they are willing to pay more in order to build up their deposits, but these will never be the norm. All above-average rates are "promos", whether they admit it or not.
Another point we can perhaps learn from this is that very often these new banks offer the most competitive rate (sometimes the only rate) on their savings accounts, the very ones to which they have no obligation at all beyond tomorrow.

One might think that the credit unions ought to be able to do better since they aren't beholden to dividends to stockholders, but that's not the way it works.
Many many years ago I joined a credit union because I was told I'd get a better deal from them when I needed a mortgage. However, when the time came that I bought a house, their rates were not competitive with the banks. It doesn't seem like much has changed since then.

Last weekend I visited a Meridian branch and got some strange answers from the staff there. One of them boldly told me that their current savings rate of 1.5% would "never" go down.
"Never?", I asked.
His rationale was convoluted and referred to their low mortgage rates. His point, although he would never have succeeded in communicating it with many people, seemed to be that any rate decrease on savings would be matched by lower mortgage rates or some other advantage and that therefore, even though the savings rate might go down, it would be compensated for elsewhere.
Clearly he felt I should find this argument convincing, which I did not. There I was, a grey-haired senior, standing right there in front of him, who will almost certainly never need a mortgage or any loan again unless it's a very short term bridge loan. Does he think I'll be impressed with this line of argument? Perhaps. He couldn't have been more than 25 himself, and he was full of the cockiness of youthful ignorance.

February 8, 2017
12:57 pm
mmlt
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February 4, 2017
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I see where EQ is offering 2% presently. Not a big incentive if they change rates a lot.

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