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CIBC - 5 yr @ 3.25%
January 5, 2022
12:30 pm
Koogie
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It is being reported elsewhere that CIBC is currently offering a 5 year @ 3.25%

https://www.financialwisdomforum.org/forum/viewtopic.php?p=711545#p711545

I have not confirmed this. But those of you with access to IE directly and to CIBC GICs through other brokerages might want to jump on this.

Caveat emptor.

January 5, 2022
12:36 pm
Koogie
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January 5, 2022
12:57 pm
HermanH
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Holy cow! Especially significant when it comes from one of the Big Five. sf-cool

January 5, 2022
1:16 pm
Loonie
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Applies to Registered and non-registered accounts.

A good deal for those who need the perceived safety of a Big Bank for high deposits.

However, if CIBC can do this, others can probably do better in weeks to come.

It's only Jan 5. I will wait and see what else turns up. The other Big Banks haven't even spoken yet.

Looks like this season's "deals" will be mostly for the five year rates. They will all want to lock us in if they think inflation and rates are going higher.

The last time I was able to get 3.25 was Jan 2020, 2 years ago.

January 5, 2022
1:35 pm
Koogie
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Also not available for small business or corporate money.

January 5, 2022
1:49 pm
HermanH
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Why would a bank care if it were business or private funds? Money is money, no?

January 5, 2022
1:55 pm
Koogie
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HermanH said
Why would a bank care if it were business or private funds? Money is money, no?  

Long story. Main theme is paperwork. Much more paperwork.

I don't mind when institutions turn down my business funds as long as they are upfront about it. I don't like when they have two tier rates... which a few have adopted.

And no, the small business rates are NEVAH higher..

January 5, 2022
2:15 pm
Norman1
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CIBC cares because the 3¼% rate is a promotional rate.

The spread between that 3¼% rate and the 5-year provincial bond rates (1½% to 2%) CIBC can borrow at is a marketing expense. CIBC doesn't want to blow their marketing budget for the promo should a bond fund or pension fund decide to take up $500 million of those 3¼% 5-year GIC's.

January 5, 2022
2:29 pm
Koogie
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Norman1 said
CIBC cares because the 3¼% rate is a promotional rate.

The spread between that 3¼% rate and the 5-year provincial bond rates (1½% to 2%) CIBC can borrow at is a marketing expense. CIBC doesn't want to blow their marketing budget for the promo should a bond fund or pension fund decide to take up $500 million of those 3¼% 5-year GIC's.  

Unlikely to ever happen since funds don't do that and anyway CIBC caps the deposit limits in their fine print.

January 5, 2022
3:07 pm
Norman1
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Koogie said

Unlikely to ever happen since funds don't do that and anyway CIBC caps the deposit limits in their fine print.

Yes, they would if they could. There's no difference in substance between a five-year CIBC GIC and a five-year CIBC bond. Both have DBRS rating AA.

January 5, 2022
3:42 pm
Loonie
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What is the dollar limit on these GICs?

January 5, 2022
4:05 pm
canadian.100
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Loonie said
What is the dollar limit on these GICs?  

Appears to be $999,999 according to the T and Cs.

I would not lock up for 5 years @ 3.25% but I am sure there will be lots of people who will. CIBC is being very proactive ahead of the other FIs to pull in funds - no doubt they will pull in a lot of $ - there is nothing presently being offered by other FIs at this level - and people tend to grab a best available promo now and not wait for a "possible" better rate from elsewhere.

January 5, 2022
6:25 pm
savemoresaveoften
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I will be surprised if they keep it open for long. They may do what Tangerine did during spring 2020, showed an awesome rate that last a whole week...

January 5, 2022
6:32 pm
HermanH
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The non-registered GIC might be acceptable, but folks should have a second sober thought about the registered GICs, especially the TFSA.

Since this offer is in Jan 2022, the GIC would mature in Jan 2027 and the funds could not be moved without suffering a transfer penalty until the end of 2027. CIBC usually has some of the most uncompetitive rates. So, your money could be stuck for 360 days at a horrible rate, unless you choose to pay the $100 TFSA transfer fee.

Personally, I'm going to wait and see what the other banks (which do not charge TFSA transfer fees) are going to offer before deciding.

January 5, 2022
7:01 pm
Bobbyjet11
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HermanH said
The non-registered GIC might be acceptable, but folks should have a second sober thought about the registered GICs, especially the TFSA.

Since this offer is in Jan 2022, the GIC would mature in Jan 2027 and the funds could not be moved without suffering a transfer penalty until the end of 2027. CIBC usually has some of the most uncompetitive rates. So, your money could be stuck for 360 days at a horrible rate, unless you choose to pay the $100 TFSA transfer fee.

Personally, I'm going to wait and see what the other banks (which do not charge TFSA transfer fees) are going to offer before deciding.  

Agreed. Let us know if you find something more enticing.

January 5, 2022
7:06 pm
Loonie
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I normally factor in the transfer fee when evaluating a promo. For a five year GIC, I would add another $25-$50 as the transfer fee will almost certainly go up during those five years.

January 5, 2022
7:21 pm
Alexandra
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I just transferred $40K out of CT Bank to my account at CIBC. I'm going for the 5yr non-registered @3.25% with interest paid out annually. Once funds are in CIBC, they never put them on hold. Won't be doing any TFSA with them for exact reasons stated by Herman and Loonie.

January 5, 2022
8:27 pm
GR
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According to the "terms and conditions", it seems that monthly interest on these GICs is payable at the same rate as annual interest for clients aged 60 & older.
So, 3.25% payable monthly for 5 years for 60+.

January 6, 2022
12:14 am
HermanH
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Alexandra said
I just transferred $40K out of CT Bank to my account at CIBC. I'm going for the 5yr non-registered @3.25% with interest paid out annually.

Why do you choose annual payment?

I am thinking about a 5-yr compound because I don't think that the rate will go much higher than 3.25% in a year or two and I would like my interest to earn at least that rate while rates rise. It might go a bit higher, but I do not anticipate by much. Anyone else have thoughts on the 5-yr window?

January 6, 2022
2:52 am
2of3aintbad
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HermanH said

Alexandra said
I just transferred $40K out of CT Bank to my account at CIBC. I'm going for the 5yr non-registered @3.25% with interest paid out annually.

Why do you choose annual payment?

I am thinking about a 5-yr compound because I don't think that the rate will go much higher than 3.25% in a year or two and I would like my interest to earn at least that rate while rates rise. It might go a bit higher, but I do not anticipate by much. Anyone else have thoughts on the 5-yr window?  

You must pay tax on the compounding interest each year, even though you don't get it until maturity. That's a drawback in non-registered GICs. As for the 5 year window, 3.25% looks attractive today because we have been "conditioned" to lower interest and inflation rates. Inflation could be a killer over 5 years.

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