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Email this3:53 pm
October 21, 2013
Online
The second calculator here seems to work well.
This will enable you to ensure that you have not overstepped CDIC limits (including interest),. Be sure to deduct the maturity values of any other deposits you have at the same financial institution before setting the desired maturity value.
You can also use it to determine how much to deposit in order to end up with a prescribed amount.
http://www.csgnetwork.com/dire.....ainer.html
5:00 pm
December 2, 2018
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I do all of mine on excel.
Principal, *interest, total, and original dollars.
*interest is automatically calculated annually or compounded.
A report is created for the value “with” interest by FI although I don’t break down Oaken...but could.
It is a worth while effort to turn on ALERTS on your Credit Cards and Bank/Credit Union Accounts.
5:18 pm
February 27, 2018
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I am not a believer in CDIC.
8:37 am
November 19, 2014
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^^If you don't believe in CDIC you must really not believe in DICO, DGCM, etc..
FWIW, I don't bother having the principal and the interest insured as I think it is a waste of insurable space. I always max out the CDIC coverage at 100,000$ of principal for instance and let the interest dangle.
When I purchase a GIC, I want the Guarantee part to cover my capital. Should the worst happen, I want my capital back (return of capital, not return ON capital). Other people may vary.
AFAIK, it's a moot point anyway as I am unaware of any GIC or term deposit in Canada having been allowed to fail. Ever. The banks/trustcos behind them, sure, but never the guaranteed deposits.
9:19 am
November 7, 2014
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Kidd said
I am not a believer in CDIC.
I really don't know what to make of this comment. Do you not think it is effective? I do know it has worked for those who have invested in failed institutions in the past, although these failures have been rare. It's not like you have to go out of your way to arrange it or pay extra for the insurance. It's just there for investments up to $100,000.00, although that total is somewhat limiting.
11:17 am
March 30, 2017
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Kidd said
I am not a believer in CDIC.
One can choose to believe or not believe in anything, everything. Some believes in ghost, UFO...
While a calculator is nice, its really unnecessary as the main reason to even stay under the CDIC limit is to protect your principal/capital. Of course protecting the interest as well will be better, but if you really have so much worry and need to protect every single penny, maybe you should not even place a deposit in that institution, let alone the amount.
11:59 am
October 21, 2013
Online
In my view, there is nothing special or magical about the principal. Money, in itself, is useless until and unless traded for something you need or want. It is maintaining the purchasing power that matters. The only way you're going to get that with a GIC is from the interest. So, yes, I'd like to keep it insured.
If you've got, say, $1,000,000 in GICs, then, at a relatively modest 3% return, that's $30,000/yr. With laddered GICs, over five years, that would be over $150,000 compounded. In 10 years, it would be over $300,000. And so on. You can certainly leave that uninsured if you want to, but I wouldn't. I'd spread it around and make sure it was insured.
I don't care what other people put in their GICs or whether their interest is covered. I just want people who read this thread to be aware of the risk of not insuring the interest.
12:35 pm
February 27, 2018
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Okay, i love to type and now you've asked for it.
CDIC is an acronym used to give some people, peace of mind but in actuality it's a meaningless term and here is why.
Just say, i have 100 thousand at tangerine and tangerine runs into serious trouble whereas i need cdic to get $100,000 of my funds back. What shape would canada as a country be in? Can you say 4th world? Ethiopia would be looking pretty good at that point in time.
So, let's say cdic start issuing cheques of up to $100,000 each, to millions of Canadians. At a cost of how many million, if not trillions of dollars? Canada as a country is broke right now, never mind any cdic claims.
Many customers currently have accounts at Scotia bank, and they would be thinking. wow... Scotia is the parent of tangerine, if tangerine went bust, is Scotia also in trouble? Talk about a run on a bank.
In the 2008/2009 bank crisis, the bank of England guaranteed 100% coverage of funds to prevent such a bank run.
Now let's talk insurance coverage. Outlook in Manitoba offer 100% coverage by means of an insurance company. Has anyone in canada ever met an insurance company willing to pay out a claim? Talk about dotting the j's and crossing your eyes. Insurance companies collect premiums, they never pay out million dollar claims. THIS IS CANADA, we lack the backbone to enforce any issue.
To those of you who have read this far, thanks. I put my money where i get the % return.
2:52 pm
December 17, 2016
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Loonie said
If you've got, say, $1,000,000 in GICs, then, at a relatively modest 3% return, that's $30,000/yr. With laddered GICs, over five years, that would be over $150,000 compounded. In 10 years, it would be over $300,000. And so on. You can certainly leave that uninsured if you want to, but I wouldn't. I'd spread it around and make sure it was insured.
No one's presuming on this thread to lock in the entire $1 Million at a single FI and the chances of multiple failures are slim. Should there be a complete collapse of the financial system, the $20 in lost interest will be the least of anyone's worries.
3:13 pm
February 27, 2018
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Top It Up, that is exactly what i am saying. If canada goes down the drain, cdic will not save you. So having a million dollars in one FI, does not cause me a loss of sleep.
Another example. company payroll, businesses issue billions every week to employees. They are not worried about cdic limits either.
10:15 pm
October 21, 2013
Online
Memories are short. There was a lot of nail-biting on this forum a year or so ago when things looked dim for Home Capital, pre-Buffett. Top It Up, in particular, posted frequent bulletins of impending disaster. Worry then spread to EQ, which has a similar niche but was not in financial difficulty.
I put more money into HCG at that time as their rates were then exceptional. My funds, including interest, were within CDIC limits., so I saw it as an opportunity.
Quite right that nobody is talking about having all your eggs in one basket. The question is around having more than insured limits in one basket, and then doing the same with other baskets. Some think that's a fine idea; others don't. So be it.
1:45 am
December 17, 2016
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"There was a lot of nail-biting on this forum a year or so ago when things looked dim for Home Capital, pre-Buffett."
All that supposed nailbiting came about because many forum members didn't understand (and I dare say many still don't) how the CDIC works and thought they were going lose everything i.e. both principal and accumulated interest should HCG collapse.
"I put more money into HCG at that time as their rates were then exceptional. My funds, including interest, were within CDIC limits., so I saw it as an opportunity."
Great to hear that both you and your husband took advantage of the bad news at the time, went against the flow, and invested $500,000 through Oaken's offerings.
6:41 am
March 30, 2017
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If its the systematic collapse of the financial system that renders CDIC and government powerless, then putting one's money where u earn the highest % and ignores government guarantee does not make much sense either. One should stock up on food, supplies, guns and bullets and find a cave high up....
For HCG, thats the name where I took advantage of their above market rate last year and got more GICs. Yes for that particular name, I did split into Home capital and Home bank and make sure both are under limit including interest.
For names like Tangerine, Simplii, protecting principal is good enuf for me..
8:54 am
April 6, 2013
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Kidd said
…
Another example. company payroll, businesses issue billions every week to employees. They are not worried about cdic limits either.
Businesses do worry and are fully aware of the limits of CDIC coverage and act accordingly.
They aren't so ignorant as to put next month's $10 million for payroll in a BB(low) rated institution, like Home Trust, or an unrated one, like Home Bank, when only $100,000 of the $10 million is covered by deposit insurance. They won't do so even if the $10 million could somehow be covered. Deposit insurance doesn't guarantee that the funds will be available on payday. That's why such deposits end up at a financial institution like the Royal Bank that pays little interest but has the same AA risk as a provincial bond.
Ignorance of risk is only bliss while nothing goes wrong.
10:47 am
October 21, 2013
Online
Amazing, but perhaps not surprising, that TIU presumes to know so much about me and my finances, and feels the need to comment on it.
1:07 pm
February 27, 2018
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Save more save often.
I am very hesitant to post anything further in this thread because it's a lost cause.
Canada's banking system is nothing like that found in the United States. There i would worry about deposit limits which are FDIC $250,000. Every hick town in the states seems to be able to have their own bank, so some form of protection is a necessity.
If a Financial institution here in canada, LIKE Home Capital runs into trouble, OTHER financial institutions will basically buy/bail them out. If in canada the cdic is going to be relied upon to get our deposits back... what i have said is... canada as a country will be, at that point in time, finished.
I have no fear of the cdic limit, MOST Canadians don't and it is not due to a lack of understanding as many here in this thread have implied. I consider myself well educated, I'm a graduate of Wossamotta U
1:12 pm
December 17, 2016
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Of course you can easily circumvent any and all of your CDIC calculation concerns by investing with either BC or MB based Credit Unions where their message is
Grow your savings with confidence and without risk – guaranteed. Every dollar on deposit is guaranteed without limit - this means that all your deposits are covered 100%.
10:28 am
April 6, 2013
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Kidd said
…
If a Financial institution here in canada, LIKE Home Capital runs into trouble, OTHER financial institutions will basically buy/bail them out. If in canada the cdic is going to be relied upon to get our deposits back... what i have said is... canada as a country will be, at that point in time, finished.
…
CDIC has intervened many times and the country has been just fine.
It is a myth that other financial institutions will just bail out or buy a failing institution. It only looks like that because CDIC doesn't do a photo op, like a politician, each time it pays out.
When Commonwealth Trust Company failed, Yorkshire Trust assumed the Commonwealth Trust deposits. Awfully charitable of Yorkshire Trust, isn't it?
In reality, there was no charity. According to details of a court case CDIC v. Commonwealth Trust Company (in liquidation) decades later, CDIC had paid $7.2 million to Yorkshire Trust for that:
2. Canada Deposit Insurance Corporation ("C.D.I.C."), whose mandate is to insure deposits in Canadian financial institutions, provided the funds necessary to ensure that the depositors in Commonwealth were repaid. C.D.I.C. accomplished this through a "transferred deposits" arrangement with Yorkshire Trust Company ("Yorkshire"). Under this arrangement, Yorkshire created obligations to Commonwealth's depositors on Yorkshire's books on the same terms and conditions as the deposit instruments governing the relationships between the depositors and Commonwealth. C.D.I.C. paid Yorkshire the sum of $7,231,256.92 pursuant to this arrangement. As a result, none of the depositors suffered any loss.
Similar thing when TD Bank assumed the accounts and deposits of failed Central Guaranty Trust. CDIC had the bad real estate loans and foreclosed properties for many years afterwards to try the recover the money it paid out to TD.
11:08 am
December 17, 2016
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To put that ^^^ into some relevant context
- the Commonwealth Trust Company failure was in 1970
- the Central Guaranty Trust failure was in 1992
- the last CDIC intervention was in 1996.
http://www.cdic.ca/en/about-cd.....story.aspx
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CDIC Summary of the Corporate Plan - 2018/2019 to 2022/2023
What jumps out most from that report is the $48.4 million/year operating cost to run the joint (Footnote from the report: CDIC is a self-funded Crown corporation and does not receive government appropriations.)
Please write your comments in the forum.