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GIC Brokers vs Do It Yourself Shopping
April 19, 2017
11:05 am
Nehpets
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What has been your experience when comparing GIC rates offered by GIC brokers versus shopping around to locate deals directly from institutions.

Do brokers have access to special rates not offered to customers from the same institutions coming through the door?

Are there brokers that could be recommended / should be avoided?

Is there any disadvantage or advantage dealing with a broker?

April 19, 2017
11:14 am
Top It Up
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April 19, 2017
2:17 pm
Koogie
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Nehpets said
What has been your experience when comparing GIC rates offered by GIC brokers versus shopping around to locate deals directly from institutions.

It depends on market conditions. I've had better deals direct and other times through a broker.

Nehpets said
Do brokers have access to special rates not offered to customers from the same institutions coming through the door?

Yes. Brokers can often get rates upped by 10 or 15 points. I've occassionally been able to do the same at institutions I have a long history with but brokers can do it with ease. Economies of scale.

Nehpets said
Are there brokers that could be recommended / should be avoided?

Yes and probably. However, any broker that is simply a deposit broker should be fine. Just make sure the contract is between you and the deposit taking institution.

Nehpets said
Is there any disadvantage or advantage dealing with a broker?  

The only main disadvantage I have found is that after the initial transaction is completed, you are back on your own. ie: the ongoing relationship is between you and the institution, the broker disappears after they make their initial coin.

April 19, 2017
2:27 pm
Nehpets
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Thanks for your insights, Koogie!

The Globe Investor link provided by Top It Up iss very helpful...more comprehensive list than other links I've been using.

Stephen

April 19, 2017
5:05 pm
Loonie
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They don't all disappear after the initial contract. I don't deal with them any more, but the one I used to deal with would phone me whenever the GIC came due to see what they could sell me next. Why wouldn't they? More business for them, and an easy target.

There is no single source that will always get you the best rate. Like everything else, you have to shop around.
In particular, sources like globeinvestor or cannex tend not to include special offers - and those are the ones we want! Also, they are not necessarily up to date. Some, perhaps all, depend on submissions by the financial institutions for their info, so the latter may be in no hurry, especially if rates are going down.

FYI, there was a previous thread specifically in regards to the broker, GICWealth.

April 19, 2017
5:45 pm
Top It Up
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Loonie said

Also, they are not necessarily up to date.  

WOW ... not up-to-date ... pretty lame, given that you don't purchase the GIC through the Globe and Mail website. Nope, last I heard you actually have to go to the issuer's website. It's the most definitive listing of institutions and their available interest rates - the list is directional.

As for special offers ... it's a Mug's Game to chase 90-day rates - moving cash in and out coupled with dead earning days in the interim. One has to move big, big number money to show it worthwhile over the current 2.5% 5-year rates.

April 19, 2017
6:54 pm
Twotons
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Some institutions (Street Capital comes to mind) only offer their GICs through a broker so your options may be a little better with a broker.

April 19, 2017
7:47 pm
Norman1
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Koogie said

Yes. Brokers can often get rates upped by 10 or 15 points. I've occassionally been able to do the same at institutions I have a long history with but brokers can do it with ease. Economies of scale.

Deposit brokers are customarily paid a commission of ¼% for each year of the GIC. The broker can choose to assign part of that commission to the yield of the GIC for the client.

April 19, 2017
9:25 pm
Loonie
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90 day GICs are perfect for people who want a 90 day GIC. Five year rates are perfect for people who want to lock up for five years.
No fools are involved.

April 20, 2017
10:03 am
mmlt
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If you can find better rates through a broker than what Manitoba credit unions pay, please let us know.
I talked to a few brokers about GIC rates and they never impressed me. The only advantage I could see is that they "might" administer your investments better than a bank.

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