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1-2yr will be above 5% in Sept. hold the line
August 30, 2022
10:56 am
dentgal
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It's Aug 30th. Apparently some banks are lowering their 5 yr rate for GICs. I have $$$ that has come due today, and more coming due in the next week.
Is there any chance that the 1 or 2 year GIC rates will decrease ? Should I put the money into savings and wait for the B of C announcement?

August 30, 2022
11:21 am
HermanH
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Mine are also maturing Sept 6. I will await the BoC announcement before making any decisions.

All my currently available funds have already been put into 5-yr 5.25% GIC

August 30, 2022
11:50 am
Loonie
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FWIW, my bet is that we will only see sporadic increases in GIC rates after Sept 7; highly unlikely to be more than a quarter point.
It doesn't matter what the BoC does if there is reduced loan demand. That's the real question.

@RetirEd, it isn't necessarily true that one is worse off with savings account than one year GIC. It depends on how fast rates are rising. I bought a one year in Aug 2021 at 1.5, which was the bet rate going at the time. I lived to regret it!, was much better off with my savings accounts where, fortunately, I had significantly more money.

August 30, 2022
12:46 pm
savemoresaveoften
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Loonie said
FWIW, my bet is that we will only see sporadic increases in GIC rates after Sept 7; highly unlikely to be more than a quarter point.
It doesn't matter what the BoC does if there is reduced loan demand. That's the real question.

@RetirEd, it isn't necessarily true that one is worse off with savings account than one year GIC. It depends on how fast rates are rising. I bought a one year in Aug 2021 at 1.5, which was the bet rate going at the time. I lived to regret it!, was much better off with my savings accounts where, fortunately, I had significantly more money.  

+1
Unless BoC goes 100bps and hints it a few more to come, GIC will remain to be stuck. If there is a significant reduced loan demand, there is zero reason why FIs want to pay up for deposit. Why take it more money than one can lend out...

August 30, 2022
5:31 pm
HermanH
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Loonie said
It depends on how fast rates are rising. I bought a one year in Aug 2021 at 1.5, which was the bet rate going at the time. I lived to regret it!, was much better off with my savings accounts where, fortunately, I had significantly more money.  

Same boat, here. Bought many 1-yr that summer. Oh, well. Somes you win; somes you lose. I didn't know about Hubert quarterly GIC at the time.

August 30, 2022
10:50 pm
Loonie
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You might not have bought the Hubert one-year even if you'd known. I don't think it was very attractive at that time in terms of rates, and we weren't anticipating the huge increases in rates and inflation. By last summer, I'd used the Hubert one-years many times and benefitted from quarterly cashability and reinvestment but did not choose it in 2021.

EDIT: I just checked my records. Hubert's one year rate for most of 2021 was only 1.30%. It didn't start moving up until very late in the year. In mid December it jumped to 2%, by which time I was enjoying 3% in Savings at Tandia CU.

August 30, 2022
11:05 pm
Norman1
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The Hubert one-year term was 1.30% in 2021 until it was raised to 1½% on November 18, 2021.

August 31, 2022
12:25 am
HermanH
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Thanks for the clarification. Guess we both went with the best rate available to us, at that time.

August 31, 2022
5:02 am
savemoresaveoften
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HermanH said
Thanks for the clarification. Guess we both went with the best rate available to us, at that time.  

Thats exactly the reason why when someone chooses to have only GIC in their investments, laddering is a must. Yet I am seeing a lot of people waiting for 1 year to hit 5%, while earning only 3% or less currently.

August 31, 2022
5:48 am
canadian.100
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Loonie said
EDIT: I just checked my records. Hubert's one year rate for most of 2021 was only 1.30%. It didn't start moving up until very late in the year. In mid December it jumped to 2%, by which time I was enjoying 3% in Savings at Tandia CU.  

Tandia was very short lived. Their current rates are nothing special.

August 31, 2022
6:02 am
RetirEd
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Loonie and savemoresaveoften: No argument there... just noting that there was a downside as well as an upside to waiting on a rate. I'm not claiming that it's the dominant force.

I didn't buy a 1-year while waiting, but kept the cash in a deposit HISA which gradually rose from about 1.25% to 2.25% while I waited, so I didn't have to wait a year (or any quarterly or other partial withdrawal key date) to make the jump.

I'm not kicking myself. I did alright with the 3-year earlier, when it only brought 3.4% and started earning that (back in May, I think) right off. And it filled my three-year-ladder gap. Most of us are short-laddered from the COVID-19 rate doldrums.

But I am very satisfied I locked in near-peak August deposits (with annual payouts) for 2- and 5-year terms. At an institution I'm happy to deal with, sends me free monthly statements, solves problems quickly and generously, and answers the phone reasonably. A decade with them and no desire to drop them.

RetirEd

We do what we think best for ourselves, including what level of insecurity we can tolerate and for how long.

RetirEd

August 31, 2022
8:11 am
Loonie
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canadian.100 said

Tandia was very short lived. Their current rates are nothing special.  

It was about four months, maybe a bit less. I don't usually bother with an offer that short but the rate was extraordinarily high at that time, which made it well worth our while at 3%, considering the amount of our deposits and all insured. I'm glad I did it. And that offer had no strings, arbitrary cut-offs or annoying fine print.

Before and after the Tandia offer, I used the DUCA one happily as it gave us complete flexibility and highly competitive rates..

August 31, 2022
1:56 pm
Alexandre
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HermanH said

Same boat, here. Bought many 1-yr that summer. Oh, well. Somes you win; somes you lose. I didn't know about Hubert quarterly GIC at the time.  

Mistakes I made last year will be maturing in November and December. Hope to see 5% 1yr GIC by then, but even current 4.0%-4.5%, if it holds, is good enough for me.

August 31, 2022
2:00 pm
hwyc
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5% 2y term is already a reality in Ontario ... look beyond the chart. Not sure if that counts.

August 31, 2022
3:00 pm
Nehpets
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hwyc said
5% 2y term is already a reality in Ontario ... look beyond the chart. Not sure if that counts.  

Care to share who is offering 5% on 2 Yr GIC's? Not showing on any of the sources I track.

Stephen

August 31, 2022
3:42 pm
Dean
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hwyc said

"5% 2y term" is already a reality in Ontario ... look beyond the chart. Not sure if that counts.  

Nehpets said

Care to share who is offering 5% on 2 Yr GIC's? Not showing on any of the sources I track.

Stephen  

    What Nehpets said ⬆

Nothing like that shows up on WhatBank either https://whatbank.ca/gic-rates-arent-high-enough/

Time to spill the beans, Hwyc ❗ sf-smile

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

August 31, 2022
3:54 pm
savemoresaveoften
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Nehpets said

Care to share who is offering 5% on 2 Yr GIC's? Not showing on any of the sources I track.

Stephen  

Equity credit union was offering 5% 2y 2 weeks ago.

Speaking of them, I sent it all req doc about 2 weeks ago and still waiting for them to finish opening the acct for me. Not the fastest turn around if u ask me. I don’t mind it only cuz will wait to see whether it’s 75 or 100 at next week’s meeting first anyway.

August 31, 2022
3:57 pm
HermanH
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savemoresaveoften said Equity credit union was offering 5% 2y 2 weeks ago.  

Also 5% for 3- and 4-yr GIC

August 31, 2022
4:42 pm
hwyc
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You guys got this sf-wink

September 1, 2022
9:36 am
Nehpets
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Does Equity CU accept clients / deposits from "out of town"? Can accounts be set up on the phone / online without an in person visit to the branch?

I tried to phone, but no one answers.....probably siesta time in Ajax!

Stephen

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