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interest rate cut
July 15, 2015
8:17 am
Jon
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unsurprising to most of us, but bank also refuse to cut interest rate significantly on mortgage any further.

link from CBC

I also want to remind people that central bank only change short term interest when it alter the interest rate. Long term interest, is determine by the supply and demand of federal government bonds. Central bank can, however, use QE to influence long term bonds rate ("Create" more money on the balance sheet and use it to buy bond), but only to a certain extend.

July 15, 2015
8:32 am
bb123
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You can bet they'll all be lowering their high yielding Savings accounts however. sf-frown

Toronto-Dominion Bank is the first of the big banks to decrease its prime lending rate but only by 10 basis points. Most of the various Banks' savings products don't even pay that much so the only way they can quickly offset that loss is by lowering any of their high yielding savings accounts. The credit unions and other FI's are in the same boat. They'll all decrease, it may just take a few days as they all watch to see what each other are going to do. May be time to move some money quickly into a GIC before they go down. I know I did at Implicity.

July 15, 2015
9:47 am
james1900
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If possible, switch to GIC today.

July 15, 2015
9:56 am
Bill
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No idea how Tangerine can't lose money paying out 3% for next few months. Maybe they'll adjust it.

July 15, 2015
10:04 am
james1900
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Bill said

No idea how Tangerine can't lose money paying out 3% for next few months. Maybe they'll adjust it.

They will pay base 1.05% (may be reduced to 0.8%?) plus bonus 1.95%.

July 15, 2015
10:14 am
xxxx
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The Tangerine 3% promo does seem completely out of sync to current market. Perhaps they loan out that money to institutions such as Equitable Bank, Home Trust etc. which will take on riskier mortgages/loans at higher rates. Otherwise, I can't see why Tangerine would need to pay 3% at this time.

July 15, 2015
10:17 am
Yatti420
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Tangerine will cut the rate.. They probably started offering 3% in order to get money in before the rate cut.. hopefully they don't adjust base rate and bonus rate.

July 15, 2015
10:25 am
Brainer
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I am fairly new to this whole active HISA use thing. Can someone give me an idea how much Accelerate and/or Hubert are likely to lower their HISA rates after today's BoC rate change?

I called and spoke with a rep. at Accelerate who told me that they rarely lower their rates by more than about 15 basis points at a time after a BoC rate cut. Can anyone comment on this?

July 15, 2015
10:56 am
Yatti420
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Brainer said

I am fairly new to this whole active HISA use thing. Can someone give me an idea how much Accelerate and/or Hubert are likely to lower their HISA rates after today's BoC rate change?

I called and spoke with a rep. at Accelerate who told me that they rarely lower their rates by more than about 15 basis points at a time after a BoC rate cut. Can anyone comment on this?

I would compare rate changes and how frequently they occur using the comparison chart. It's kind of different bank to bank.. Depends on their needs etc..

July 15, 2015
7:12 pm
Doug
British Columbia, Canada
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Yatti420 said

Tangerine will cut the rate.. They probably started offering 3% in order to get money in before the rate cut.. hopefully they don't adjust base rate and bonus rate.

Exactly, Yatti. sf-cool

Their terms are quite clear - they can fluctuate (up or down) their posted interest rate (currently 1.05%) and keep the "bonus rate" of 1.95% over the base rate the same with no advance notice required. I suspect, given the BoC's 15 basis point cut, you'll see them increase their margins a bit by lowering the base rate to 0.80% or 0.75% - especially if the Big 5 lower their posted rate to 0.5% or 0.25% for their highest interest savings account.

Assuming 0.75%+1.95%, that's stilll 2.7% or 2.8% (instead of 3%). Still worth it but, once the deal is up at the end of November, these promotions will increasingly be less attractive and I'll likely move my money back to Implicity Financial.

Cheers,
Doug

July 17, 2015
11:24 am
Koogie
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For those that use TDDI, they have dropped their "HISA" rate (TDB8150, etc..) from 1.00 to 0.75

Would assume the other discount brokerages will follow suit quickly. Bummer for those of us that park investment money there.

July 17, 2015
1:45 pm
xxxx
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As of right now, Scotia iTrade HISA (DYN 1300) is still 1% but guess that will drop if TDDI has dropped its HISA. This was a great day for preferred shares - values have increased with the interest rate decrease. I think we are in for low interest rates for quite a while yet. The chance of a boom in the Cdn economy is not very high at this point - and there may be some instability with the election in the fall, depending on the outcome.

July 20, 2015
7:14 am
xxxx
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The Scotia iTrade HISA Savings (DYN1300) dropped today from 1.25% to 1.0%. High interest savings accounts are not great except for parking temporary money.

July 20, 2015
10:34 am
rhvic
Victoria, BC
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I note that RBC Action Direct has lowered their "investment savings account" rates from 1.0% to 0.75%. (http://www.rbcroyalbank.com/pr.....index.html) This is traded on their site under the symbol RBF2010.

Poor rates indeed, but still a smidge better than RBC-AD usually paying zero interest on any cash balance in one's trading account.

July 20, 2015
11:27 am
2of3aintbad
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Although BMOIL dropped their cashable gIC to 0.70% the day after the rate drop, they still show 1.00% for AAT770

July 20, 2015
11:32 am
kanaka
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People's Trust TFSA Savings account dropped to 2%.

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