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CIBC - 5 yr @ 3.25%
January 7, 2022
11:52 pm
Loonie
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The pettiness is off-putting, for sure, but to be expected.
I'd be willing to bet that in five years the fee will have risen to 125 --150.

This offer is better for non-registered, if you are willing to commit to five years so early in the much-anticipated rising rate environment. I don't think it will last very long.

January 8, 2022
12:53 am
HermanH
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What do you not believe lasting very long, the rising rate environment or the CIBC offer?

I think I'm going to put some into the 5-yr non-registered. I think that the rates will rise and likely reach 3.25 (and maybe a bit more), but that they won't reach that rate for 12-18 months. So, the slight loss I may experience for yrs 2 through 5 will (hopefully) be made up by the higher rate differential for the initial 12-18 months.

If the rates rise faster or further than the 3.25%, then I hope not to miss out on too much. I'll regret my impetuousness, but I'll just have to live with it. sf-frown

January 8, 2022
3:17 am
Jim Sherat
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Well thanks everyone for sharing their thoughts and expertise, and clarifying further the concern raised earlier re: impact of getting TFSA funds stuck, or face $100 (and possibly much more in 5yrs) Transfer Fees.

I've decided not to act impulsively on this CIBC 3.25% rate, especially since it appears these GICs can not be had through a branch, meaning a new brokerage arm to deal with. For me, one is enough [TDDI].

Based on generally good reviews in this forum, I was just about to contact 'Hubert Financial' to setup a joint account, and use their very flexible 1yr GIC for our shorter term money ... especially attractive, now that we see hope of rising interest rates and better returns through tiering.

and yes, Loonie, I'm still around. 😉 With the Covid Collapse of interest rates, and some poorly planned (shorter GIC term) strategies, I've been off in a cave licking my wounds for awhile now. Maybe there is a bit of hope on the horizon?

January 8, 2022
4:55 am
canadian.100
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Jim Sherat said
I've decided not to act impulsively on this CIBC 3.25% rate, especially since it appears these GICs can not be had through a branch, meaning a new brokerage arm to deal with. For me, one is enough [TDDI].
 

If you deal with TDDI, I would think they offer the CIBC 3.25% GIC. I deal with Scotia iTrade and they do offer the CIBC GIC - although I am not interested in going 5 years for a locked-in GIC @3.25%.

January 8, 2022
5:30 am
Bill
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Not interested in a gic either but I checked and I didn't see TDDI offering it. I didn't expect them to, they've never offered other institutions' "special rates" or whatever this is, their gic offerings are invariably uninspiring.

January 8, 2022
7:21 am
savemoresaveoften
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Loonie said
The pettiness is off-putting, for sure, but to be expected.
I'd be willing to bet that in five years the fee will have risen to 125 --150.

This offer is better for non-registered, if you are willing to commit to five years so early in the much-anticipated rising rate environment. I don't think it will last very long.  

my thots as well.

HermanH said
What do you not believe lasting very long, the rising rate environment or the CIBC offer?

I think I'm going to put some into the 5-yr non-registered. I think that the rates will rise and likely reach 3.25 (and maybe a bit more), but that they won't reach that rate for 12-18 months. So, the slight loss I may experience for yrs 2 through 5 will (hopefully) be made up by the higher rate differential for the initial 12-18 months.

If the rates rise faster or further than the 3.25%, then I hope not to miss out on too much. I'll regret my impetuousness, but I'll just have to live with it. sf-frown  

I am with you re putting some $ now into a 5y 3.25%

One can always wait, be it equities, bonds, GIC or even buying a computer.
In this case, a 5y GIC offered by a big bank may rise above 3.25 in 6-12 months' time, but you are losing out every day you wait and park it in shorter terms.
Also lets say you wait a year and then able to lock into a 5y at 4%, what if rates start coming down again btw year 5&6 (from today) ? When that happens you are still lock in for 1 year and by the time it matures, you are only able to lock in again for a lower rate (compared to the 5y GIC today that matures in 5y's time). It just show given so many moving parts, even if one knows "for sure" rates will go up "soon", you dont guarantee winning just by waiting.

Right now it seems Scotia Itrade is the only other FI you can get the CIBC 5y rate.
I am surprised big 5 offer each others GIC. For example CIBC IE only offer its own and other non sch A banks only

January 8, 2022
9:28 am
Alexandra
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I have already purchased my non registered 5y term @3.25% with interest paid out annually. I did mine online with CIBC and funded through my chequing account. You do not need to go through a broker as some have said.

Most of us who are somewhat GIC "fans", have GIC's coming due several times per year if you have been laddering for years. So we'll be taking advantage of any higher offerings as each of them mature. Also, when you are taking the interest annually on them all, you can re-invest those amounts as well at the hopefully higher rates.

People said the same thing here when Coast Capital put out their 4% term deposit. Because all funds were then Provincially insured I put in much more than the $100K that is insured with CDIC.

January 8, 2022
9:31 am
Bill
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Big or other banks don't offer each others' gics, it's their separate discount broker entities that do, to some degree.

I thought the whole idea was not to try to guess at where rates will be in years ahead, to use a ladder so that you have money coming available regularly that can be rolled over into the 5-year (i.e. usually highest) rate. If I wanted to guess at the future, i.e. gamble, I'd probably pick stocks over gics.

January 8, 2022
9:46 am
Dean
Valhalla Mountains, British Columbia
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Loonie said

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.  

    This ⬆

Much better rates are sure to be on the way. I wouldn't be locking-in to anything long-term right now.

Six to eight months from now, I'm guessing 3.25% will look like 'Chump Change'.

My two centavos,

    Dean

sf-cool " Live Long And Prosper " sf-cool

January 8, 2022
9:48 am
Norman1
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Jim Sherat said

I've decided not to act impulsively on this CIBC 3.25% rate, especially since it appears these GICs can not be had through a branch, meaning a new brokerage arm to deal with. For me, one is enough [TDDI].

The CIBC 5-year 3¼% GIC's are available through CIBC branches. They are one of the CIBC Bonus Rate GIC's. $1,000 minimum, $999,999 maximum through the branches.

January 8, 2022
9:54 am
Loonie
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It's the CIBC offer that I don't hink will last very long.

"A bird in the hand is worth two in the bush" is a good philosophy for conservative GIC investors.

I might put some into this, non-reg'd, but would hedge my bets and not put in my whole year's allotment. A couple of years ago, I put it all in in January because I didn't think I'd do any better later that year; I was right. Last year, I waited, and that was right too. This year I think there is a good chance of doing better later, but this is still a good rate. I can only hope I'm right.
Registered funds are more of a nuisance to manage. I'm whittling down the RIFs as fast as I reasonably can. The government must be making a fortune on those when last spouse dies!

January 8, 2022
9:57 am
Bill
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Just checked my CIBC Investor's Edge discount broker account and this gic is offered there too. They also show an escalator rate 5-yr gic with an average yield of 3.288%, ranging from 1% in year 1 to 5.5% in year 5. Best 5-year rate on a 3rd party gic there is 2.5%, Concentra Bank. Personally no interest in being locked for 5 years, what with my guess at inflation during that time.

Royal Bank DI also doesn't show this CIBC product available, far as I can see.

January 8, 2022
11:19 am
KamWest
Toronto
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Bill said
They also show an escalator rate 5-yr gic with an average yield of 3.288%, ranging from 1% in year 1 to 5.5% in year 5.

If you think about that for a bit it's a very poor choice

ie... rates are going up you can see that coming

With this you are locking in at 1% for year one etc.
5.5 at the last year will probably be the norm by then.

So tell me again why you would pick the escalator option?
It only makes sense when you have a decent first year rate, especially when rates are on their way up.

January 8, 2022
11:34 am
Bill
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I didn't say to pick it, in fact the opposite, I just put it out for information, if you're looking to lock in for 5 years what rates will be doing during that time is irrelevant to you and so it's another option. Maybe some people like the idea of bragging in 4 years that they're getting 5.5%, I don't know.

I agree it's deceptive because you're waiting longer to get your money, there's a cost to that.

January 8, 2022
12:31 pm
Norman1
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One would select the CIBC 5-year Escalating Rate GIC because it has a slightly higher effective return of 3.288% per annum than the 3.25% per annum of the 5-year 3¼% CIBC Bonus Rate GIC.

It doesn't matter that the first year of the Escalating Rate GIC is 1% and the final year is 5½%. It works out to be equivalent to a non-escalating 3.288% for the five years if one lets the interest compound to maturity.

January 8, 2022
12:42 pm
KamWest
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Norman1 said
One would select the CIBC 5-year Escalating Rate GIC because it has a slightly higher effective return of 3.288% per annum than the 3.25% per annum of the 5-year 3¼% CIBC Bonus Rate GIC.

It doesn't matter that the first year of the Escalating Rate GIC is 1% and the final year is 5½%. It works out to be equivalent to a non-escalating 3.288% for the five years if one lets the interest compound to maturity.  

It matters because the feds already announced rates are going up and if you lock in next year or the year after you will have a higher end rate. Just keep it at 1.25% in a standard account for the next year then watch the rates climb. The five year escalator can be beaten especially since the 3.288% will be nothing special in the next few years.

January 8, 2022
1:21 pm
Bill
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$100,000 CIBC 3.25% gic ends up, with annual compounding, to be $117,341 at maturity, the escalator (annual rates are 1, 2.25, 3.5, 4.25 & 5.5%) $117,559 (same as using effective rate of 3.288%), so slight difference.

I think some folks fixate on the rate number, e.g. if I can get a 5-year gic for X % I'm in! Meanwhile a 2% rate in a 1% inflation environment might be much better than a 5% rate in a 5% inflation environment, depending on how much inflation affects one. Vatox is our inflation sentry, wonder if he's buying any of these.

January 8, 2022
2:07 pm
rqs
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Does anyone know (not assuming) whether CIBC would issue taxable interest receipt annually or just one for the entire interest at maturity?

January 8, 2022
2:18 pm
COIN
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rqs said
Does anyone know (not assuming) whether CIBC would issue taxable interest receipt annually or just one for the entire interest at maturity?  

Good question, especially for the escalator. I think Ottawa is concerned that the tax take in the early years are low because the interest rate in years 1,2 and maybe 3 are low.

January 8, 2022
2:19 pm
Norman1
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rqs said
Does anyone know (not assuming) whether CIBC would issue taxable interest receipt annually or just one for the entire interest at maturity?

For individual GIC holders, the GIC issuer is required to issue a T5 slip annually, starting with the year of the first anniversary.

If one buys the GIC now, the GIC's first anniversary would be January 2023. First T5 slip will be issued for tax year 2023.

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