Deposit Brokers | GIC discussions | Discussion forum

Deposit brokers are not going to get a better rate if the financial institution is able raise the needed amount of GIC deposits itself at a lower rate.

Sometimes a financial institution falls short. The financial institution will then work with deposit brokers to offer a leading GIC rate to attract a targeted amount of funds. Once the target is reached, the rate can be withdrawn at the end of the business day with no consequences.

Deposit brokers usually inform their GIC purchasing clients that the quoted GIC rates and issuers are only good for that day. If one likes the rate, then one needs to act that day. The rate and issuer may not be there the next day.

COIN said
It's not a good sign when an institution can't raise the funds themself.

That's not the case. Many smaller institutions cannot raise required deposits at the desired pace themselves. That's why deposit brokers are around.

For example, Home Trust Company that's behind Oaken. This is from the March 2025 DBRS press release confirming their BBB debt rating:

Funding and Liquidity Combined Building Block Assessment: Moderate

The [Home Trust] Group's funding is highly dependent on broker-sourced deposits, which accounted for about 74% of its $21.3 billion total deposits in 2024. In recent years, HTC has made a concerted effort to diversify its funding base through directly sourced deposits and various capital markets initiatives, including various securitization programs and institutional deposit notes. The Company continued to grow its direct-to-consumer deposits through its Oaken Financial offering, which amounted to $5.4 billion and accounted for 25% of the Group's total deposits in 2024. …

Equitable Bank too. July 2025 DBRS press release:

Funding and Liquidity Combined Building Block Assessment: Good/Moderate

Equitable continues to diversify its funding profile although it still relies on brokered deposits. Specifically, direct-to-consumer deposits through EQ Bank and credit union deposits represented nearly 35% of on-balance sheet funding in Q2 2025 compared with 16% in Q4 2018 and have somewhat reduced the Bank's reliance on brokered deposits, which decreased to 49% as of Q2 2025 from around 53% at YE 2022. … Additionally, the Bank has further diversified its funding base by building out its covered bond program with covered bonds outstanding of $2.1 billion as at Q2 2025. …

smso, I agree, if it's not done on their phone they're not doing it, though maybe deposit brokers will modernize in that way. I find most of the 30 and 40-somethings I know haven't heard of gics.

COIN, I agree but many aren't having kids so that's a big saving, eventually. Also apparently Me Generation is leaving a tsunami of wealth, younger ones know it, so go to Thailand, Skip dishes, etc while they're waiting.

Bill said
smso, I agree, if it's not done on their phone they're not doing it, though maybe deposit brokers will modernize in that way. I find most of the 30 and 40-somethings I know haven't heard of gics.

Exactly, GIC broker won't survive unless they can modernize and allow online deposit / withdrawal when purchase a GIC thru them. Writing and snail mailing a cheque wont survive.
Even rents which has been typically paid via post dated checks are slowly but surely replace by fintech online apps such as Chexy.
My 22 years old daughter has a checking account, but she said there is no reason for her to write a check and call it ancient, and she does not expect to do so at all !

mordko said

I think a good way to build wealth is to invest in education and skills when you are young, then work hard and increase your earnings, then invest in stocks. There are other ways but they usually carry more risk. If you are 70 then it's time to focus on spending rather than building wealth.

GICs can work out ok in some circumstances but usually they struggle to keep up with inflation, especially on an after tax basis. Those who bought 5 year 1.2% GICs in mid 2020 will never recover their loss on that purchase regardless of how long they live. And gics lack liquidity. It's a marginal instrument which can work as a limited fraction of fixed income in ones portfolio. Young people shouldn’t be buying gics, and that has nothing to do with having to mail a cheque.  

I have pretty much followed your advice. But I got lucky in 2022 and bought close to half a million in 5 year GICs @5.1%. Those might turn out to be my best investment ever.

G&M (behind paywall) has an Oct 10th column on the GIC fever of 2022-2024 and the sudden turn in events starting this year https://www.theglobeandmail.com/investing/markets/inside-the-market/article-canadians-finally-over-gics-interest-funds/

The GIC fever has officially broken.

The investor money flowing into guaranteed investment certificates has slowed to a trickle – a paltry $7-billion in net new funds in the first half of the year, according to data from ISS Market Intelligence.

That’s but a whisper of the close to half-a-trillion dollars that gravitated to GICs from 2022 through to 2024.

Investors sought sanctuary in GICs at a time when the bond market failed them spectacularly. Now, they’re returning to bonds en masse.

Fixed-income exchange-traded funds are seeing record inflows. And bond funds are almost single-handedly sustaining the mutual fund business.

I would expect accelerated outflow from GICs as those purchased in 2022-2024 mature and central bank interest rates continue to slide a bit further.