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1 Year Redeemable
February 8, 2020
2:35 pm
firstrate
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February 8, 2020
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BC resident.

Currently have 1.4 million in GICs, 650K coming due early March, and 750K at another institution maturing in April (2020).

These funds will be used later to finalize a pre-sale purchase - the completion date for that is uncertain, but estimated at May 2021.

Because the developer can demand funds anytime on 10 days notice, I might need access prior to maturity.

Looking for a 1-year redeemable GIC for each.

If I were to invest this now, what might be my best options?

My local bank is advertising 1.9% on a redeemable 1 year, with interest payable after 6 months (presumably whatever's accrued at the full rate). They only hold GIC rates for 21 days. In past, they have slightly improved their posted rate on request (goes to head office).

February 10, 2020
9:29 am
Rick
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Not too familiar with redeemable GICs. Can you do partial withdrawals? Wouldn't want to redeem and renew every time I needed some cash. If you are going to need to draw on it with 10 days notice, why not a HISA? Open a Saavy Savings at Motive currently paying 2.8% on the first million. If you're married, open one each for you and your spouse to cover the whole amount, and open a joint chequing account to transfer funds.
My 2 cents

February 10, 2020
10:52 am
GICinvestor
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Check for redeemable rates at:
Accelerate
Hubert
Outlook
Oaken

Not sure if they have any more. But expect a penalty for early redemption.

Have you looked at Hubert’s 1 year quarterly and I believe Oaken has one too.

How about the BC credit unions? Vancity or Prospera or Westminster Credit Union?

February 10, 2020
1:42 pm
Nehpets
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How about a Motive Saavy Savings account at 2.8%

Rate has been stable for over a year and is CDIC covered up to 100K. Can be withdrawn anytime following a 10 day hold.

Stephen

February 10, 2020
3:47 pm
Loonie
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Access CU and Steinbach CU in Manitoba offer high rates for large savings deposits, currently 2.7 at Steinbach and I think 2.9 at Access for 250,000 minimum. These rates are subject to change, of course but likely to remain market leaders.

A major advantage is that it would all be insured by the Manitoba Deposit guarantee system.
You would need to set up parallel chequing accounts so as to be able to write developer a cheque. If developer requires certified cheque, then you would need to ask about that.
I'm not aware of any deposit limits at these institutions but you should ask to make sure. Some financial institutions do have limits. Some can be harder to get money out of if they have transfer-out limits and don't have chequing accounts.

Generally, I like Hubert, but they don't have chequing so you would have to wait for your funds to be transferred out and clear before you could write a cheque on them; also, their one year rate at the moment is not as good as the other two, and even less if you don't leave it there the full year.

Oaken does have a redeemable GIC, redeemable after 30 or 90 days, approximately 2.45%, I think. The problem is that you would be subject to CDIC insurance limits and this company did have a $ crisis a couple of years ago. If you are part of a couple, then each of you could have 200,000 insured through them plus joint 200,000 for total of 600,000. But if you are single, then only 200,000 would be covered.

The Motive account could be useful but 100K CDIC insurance is not adequate for you. With them, if you are a couple, you could get max 300,000 coverage. (With Oaken, you can get double the coverage because they have 2 insured entities.) Also, it takes forever to open an account at Motive and they can be very picky. I believe Motive has a maximum of 1 million deposit but not positive. You'd need to check.

I would go with Steinbach if I were in your position. They are one of the largest CUs in the country, have been well managed for decades, no insurance limit, reliably market-leading rates and one stop shopping. But make sure you get a chequing account too.

February 14, 2020
10:10 am
GR
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Niverville Credit Union in Manitoba (open to all Canadians) has a 1 year redeemable GIC at 2.60% p.a., redeemable anytime at 2.60% p.a. Rate can be held and guaranteed two weeks in advance.

https://www.nivervillecu.mb.ca/Personal/Rate/TermDeposits/

February 14, 2020
5:49 pm
Bud
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1yr redeemable whats the point

2.6 not gonna cut it

LB, Motive 2.8 for short term

GIC King

February 14, 2020
8:59 pm
GR
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Bud said
1yr redeemable whats the point

2.6 not gonna cut it

LB, Motive 2.8 for short term  

As the self-appointed "GIC KING", you would recognize that a redeemable GIC offers the assurance of 2.60% until needed/redeemed or maturity in 1 year, whereas rates on savings accounts are subject to change at any time.
Also, the original post asked specifically for a redeemable 1 yr GIC, so this is an option.
Also, Motive and LB do not offer insurance coverage on the very large amounts involved here, whereas Manitoba credit unions offer full coverage, albeit not with CDIC.

February 15, 2020
9:49 am
Loonie
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Good find, GR. And good of you to spend the time searching for something that meets someone's specific needs.

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