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Luminus Financial Promo 3.5%
June 17, 2016
11:20 am
James
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FYI for those interested - 3 month promo at Luminus for 3.5% (Investment Savings Account), then returns to the posted interest rate (currently at 1.75%). Luminus is DICO covered.

https://www.luminusfinancial.com/Personal/ProductsAndServices/SpecialPromotionalOffers/ISA/

June 17, 2016
12:48 pm
xxxx
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June 17, 2016
7:52 pm
Loonie
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Well-spotted, James!
thank you. My spouse already belongs to this CU, and does not yet have a savings account there, but they did not bother to inform him of this offer.

June 17, 2016
11:30 pm
Yas
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I got excited for a moment then noticed:

Who is eligible for Luminus Membership?

Luminus is an open-bond credit union, which means we can serve any Ontario resident, business or organization.

June 18, 2016
4:40 am
xxxx
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Loonie - does your spouse pay an annual membership to Luminus?
Under Service Charges lists "annual membership dues" of 5.99.
I called the number Friday - agent said there are no me-to-me transfers - Transfers Out seem to incur a service charge of 2.50. Interac Transfers Out a fee of 1.50.
With service charges and annual dues - these cut into the 3.5% interest rate - will be more significant when the 3.5% goes back to 1.75% after the promo ends.
Does anyone have experience with this CU?

June 18, 2016
6:20 am
2of3aintbad
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Yes, I opened a savings account in 2014 when they had a bonus rate for savings and later 5 year GICs. Then I paid some bills including my Questrade TFSA contribution. No fees charged. I have never tried an Interac transfer. As for annual dues, I got notice of the pending fee and transferred in enough to cover it but nothing was withdrawn.

June 18, 2016
12:53 pm
Loonie
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Brian - So far, spouse only has an RSP GIC.
There has been no statement received, and spouse just realized that we have no password, so will have to get that in order to find out if they have found some way of taking a fee out of the RSP. There was, however, an email notice saying that the fee would be deducted from "your account" last Nov 15.
Koogie may know.
They do have a lot of picky fees on their list, but most will not apply to savings accounts if you are not using it much.
In general, I would not be too keen on using them for everyday banking as we have had issues with unclear and misleading communication with them. But it should be OK for a basic savings account.
I believe they also have an annual rebate. Perhaps that offsets the annual fee??

June 18, 2016
2:31 pm
xxxx
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Thanks Loonie. I will pass on Luminus. When I spoke to the agent on Friday she did not answer my questions very well - she avoided responding about the (lack of) me-to-me transfers and the specifics of how one would transfer funds in and out and avoided the subject of fees. Probably one of the worst first contacts I have had. She was keen on asking repeatedly how much ($) I intended to bring in to Luminus. I avoided answering that question!

June 18, 2016
3:30 pm
Loonie
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Yes, unfortunately that sounds consistent with the quality of communication we have had. We complained through the hierarchy and they were going to fix it - over a year ago.
The person my spouse spoke to today was literally on a boat in the Toronto harbour when she picked up the call. Evidently they were doing a corporate sponsorship of a charity event today. I appreciate the determination to be accessible, but it would be better to get the home front cleared up first.

I do get the feeling, however, that they don't INTEND to be misleading. There doesn't seem to be anything underhanded.

$5.99 isn't much if you put in a large amount, but it's a nuisance. I think fees like that should be embedded in the rate.

June 18, 2016
4:13 pm
2of3aintbad
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Loonie said
...$5.99 isn't much if you put in a large amount, but it's a nuisance. I think fees like that should be embedded in the rate.

Yes, but so far no one has reported that they have been charged the annual fee or any other fee. I know that I have not. Maybe too early to make this judgment.

June 19, 2016
9:09 am
xxxx
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Loonie said

Yes, unfortunately that sounds consistent with the quality of communication we have had. We complained through the hierarchy and they were going to fix it - over a year ago.
The person my spouse spoke to today was literally on a boat in the Toronto harbour when she picked up the call. Evidently they were doing a corporate sponsorship of a charity event today. I appreciate the determination to be accessible, but it would be better to get the home front cleared up first.

I do get the feeling, however, that they don't INTEND to be misleading. There doesn't seem to be anything underhanded.

$5.99 isn't much if you put in a large amount, but it's a nuisance. I think fees like that should be embedded in the rate.

I agree, I don't think they intend to be misleading, Loonie - I think the level of competence is obviously lower than where it should be. Having gone over in detail the whole content of their site - e.g. Service Charges, different types of Accts (e.g. not explaining the difference between Five Star Chequing and Three Star Chequing) etc. etc. etc., this site gives me a somewhat "lower" impression compared to sites of other financial institutions and the conversation with the agent on Friday supported this impression. If your spouse gets the 3.5% and with no charges that is great. He cannot do better these days with daily interest accounts.

2of3aintbad said

Loonie said
...$5.99 isn't much if you put in a large amount, but it's a nuisance. I think fees like that should be embedded in the rate.

Yes, but so far no one has reported that they have been charged the annual fee or any other fee. I know that I have not. Maybe too early to make this judgment.

If no one has been charged the annual fee or any other fee, then I find it strange they have such detailed lists of Service Charges on their site. If I were a Member of this CU, I would wonder the reason why the charges are not occurring if that is what is indicated, and presumably approved by Mgt / Board of Directors.

June 19, 2016
9:54 am
Norman1
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Brian said

I agree, I don't think they intend to be misleading, Loonie - I think the level of competence is obviously lower than where it should be. Having gone over in detail the whole content of their site - e.g. Service Charges, different types of Accts (e.g. not explaining the difference between Five Star Chequing and Three Star Chequing) etc. etc. etc., this site gives me a somewhat "lower" impression compared to sites of other financial institutions and the conversation with the agent on Friday supported this impression. …

I agree. Luminus' product information on their site could be much better.

One can deduce the difference between their FiveStar Chequing and ThreeStar Chequing by reading between the following lines. I had wondered why anyone would pay $12.95/month for their ThreeStar Chequing account when the no monthly fee FiveStar Chequing is available:

To arrange your FiveStar Chequing Account just call us! We’ll help you setup any payroll deductions you’d like to have deposited…

ThreeStar Chequing Account is a convenient alternative to our premium account for members who have not yet arranged for full payroll deposit. …

I also remember the discussion Something to be aware of with "odd-month" GICs about Luminus. It took months for one customer to get the promised copy of the paperwork that was signed and to get the correct answer to the question "was that 2.35% rate on the term deposit per annum or per term?"

June 20, 2016
8:24 am
xxxx
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I read the Financial Statements for Luminus today. Luminus incurred a LOSS in 2015 of 400K
and made a PROFIT of 282K in 2014. Must say I would have some concerns as to their viability - very unusual for FIs in Canada to incur bottom line net losses.
Surprised that someone like Loonie and/or spouse would deal with such a FI considering he is so very risk adverse - although I presume deposits are covered by insurance in the event the CU goes under.
Perhaps one should think when a rate like 3.5% is offered, there must be a reason - maybe a need to beef up sources of cash to be able to loan out and make more revenue and a profit? Or as some of you have indicated above - Luminus never actually charged them the Service Charges as set out - maybe that is part of their problem!

June 20, 2016
10:15 am
Loonie
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Net loss of 378K to be precise. While I think it is remiss of them not to attempt to account for this in their Annual Report, they did have extraordinary capital costs in 2015 in opening a new modern branch, which is really their only branch. They also launched online banking, which must surely have costs. These should pay off in future years. Membership, deposits, and loans are growing.

Like you say, Brian, it's covered by DICO, and we are under limits. I would not recommend anyone go over limits. And, if Luminus does get into trouble that they can't manage, they will almost certainly be absorbed by one of the larger credit unions.

Frankly, I don't know why they continue to struggle along independently. There are at least 3 big strong CUs in the city to which they could probably hitch their wagon - and I suspect they will in due course. Size is power in this business as far as I can see.

We have now confirmed that no annual fee was charged last year. When asked about this, the rep said she guessed they couldn't take it out of the RSP!

Edited to add first paragraph.

June 20, 2016
10:54 am
xxxx
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Putting it all together - indications of weak management and governance - I would predict they will likely remain marginal, and not be able to prosper - far too small and do not offer anything unique - the 3.5% promo on savings for 3 months (then back to 1.75% and maybe service charges to withdraw/and membership) is likely a bit of desperation to get more funds in quickly to loan out, increase liquidity, cover deposit withdrawals etc. Bear in mind, Loonie, while DICO does insure balances, in the event of a failure, money gets tied up, and it could take a long time to access your money - and no guarantee that another CU will absorb them.

June 20, 2016
11:59 am
Loonie
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Good points, Brian.
they do seem to offer something unique to the Philippino-Canadian community, as they have partnered with a Philippino bank.
Nobody I know personally is committed to Luminus beyond mid-August.

They CAN pull the current offer whenever they want, i.e. whenever they have reached their goal. 1.75% is a competitive rate, if not the highest on offer, and they have offered it consistently for over a year, so they should be able to attract and keep new money this way.

June 21, 2016
3:29 pm
rfdm4g4g9
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https://www.luminusfinancial.com/Personal/ProductsAndServices/SpecialPromotionalOffers/ISA/

Yeah nice rate. Some of their fees are a killer, but for a large chunk of $$$ you will still come out ahead.
How big are they ? How much assets or deposits they have or members ? I know its DICO insured, but still its better if they are one of the Big CU's and not a smaller one.

June 21, 2016
3:42 pm
Loonie
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They're not big.
You can read their Annual Reports online.

June 22, 2016
6:01 pm
bali
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What is the concern is in regards to Luminus meeting its financial obligations to account holders? Luminus is a DICO member as is Alterna, DUCA, Meridian plus more than 100 other financial institutions. I assume that the risk of Luminus being bailed out by DICO is extremely low (maybe less than 1%) however if that does happen then DICO would reimburse deposit holders ($100K spouse + $100K spouse + $100K joint = $300K). Of course this would not be pleasant and one might have to wait a period of time to be reimbursed but isn't that a minor inconvenience in order to get 3.5%. Am I missing something here or is this a no-brainer?

June 24, 2016
11:16 am
Koogie
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They are also offering a high summer rate to their small business customers. Offer as received this morning follows:

"As a Member Services Representative at Luminus’ Financial Hub, I wanted to connect and let you know that we offering the highest rate on the market for deposits. Our first offer is on our personal savings account which is currently earning 3.5% and our second offer is our business savings account that is currently earning a high 2.7%. These very special rates that apply to new deposits only are a limited time offer until September 15, 2016."

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