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Email this2:18 pm
July 27, 2022
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I have an on line account with RBC. Presently I have several RBC cashable GICs.
To buy GICs that offered higher interest rates I opened an RBC Investing Account at their suggestion. Through this account I thought I could choose the best rates offered by different banks for each year as a 5 year laddering scheme.
I was surprised to find that some of the banks including EQ bank do not offer the same rates if purchasing through an Investing Account as the rates that are posted on their site (also on this forum). For example the 5 year 5% EQ bank rate is listed in the Investment Account search at 4.68%.
Other banks such as Tangerine do not change their rate if purchasing through an Investing Account.
Can anyone please explain to me why there is this discrepancy in the interest rates?
4:40 pm
September 11, 2013
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Often a broker's rate will be inferior because the financial institution has to pay the broker to sell the instrument and that fee reduces the rate to the consumer. When the financial institution sells the GIC directly it incurs no such fee so can offer a higher rate.
5:09 pm
January 12, 2019
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.
Following what Bill said ⬆, the 'reverse' can also be true . . .
Banks often allow better GIC deals through independent brokers, because they don't have to pay Bank employees to do that work. When it comes to GICs, the broker's cut is almost microscopic.
GICs at Investment Accounts can also differ, depending on the various arrangements with the issuing Banks.
It's a bit of a mixed bag out there. That's why we need to shop around. 
- Dean
" Live Long, Healthy ... And Prosper! "
6:41 pm
April 6, 2013
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The EQ Bank branded GIC's are only available through the EQ Bank site and not through brokers. It is the Equitable Bank branded GIC's that are available through brokers.
It is the same Equitable Bank that issues both. But, the direct-to-consumer EQBank.ca channel is different than the brokerage channel. There's different costs and different depositors.
Concentra Bank does the same. Through Scotia iTRADE, Concentra Bank branded 5-year GIC's pay 4.65%. Through their direct-to-consumer Wyth site, Wyth branded 5-year GIC's pay 4.75%.
Canadian Western Bank branded 5-year GIC's are 4.63% through Scotia iTRADE. Through their direct-to-consumer Motive Financial site, Motive branded 5-year GIC's are 5%.
4:48 am
April 18, 2022
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How closely is 2yr gov bond yield linked to 2yr Gic?
10:46 am
October 27, 2013
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I would suggest it is correlated to some degree, especially at the big banks, but probably no more so than 5 year bond and 5 year GIC correlation. The other factor is competition between lenders (of all stripes) for funds to support their loan book.
Right now the spread between 2/3 year gov't bonds and 2/3 year GICs is less than that at the 5 year level but I don't know if I would read much into that. The gov't bond yield curve is inverted.
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