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GIC - DBRS Rating - Discount Broker - Too Much Information???
November 4, 2015
10:29 am
kanaka
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There is no doubt in my mind that as the years progress and I manage my registered and non-registered investments that I have to eliminate a few bank/credit union accounts. I was reviewing my iTrade account and found that I can have the option of purchasing GIC's from different institutions all in one spot. I have listed the higher rates for 5 year while not 2.5% some are not bad. And looking if 2.5% gives $25 for every $1000, and 2.4% gives $24.50 and 2.35% gives $23.50 it is not all that bad.

So my question is.....should I be concerned about the DBRS rating or be satisfied with the CDIC coverage or the DCGM coverage?

Issuer 5 Year DBRS Rating1 Purchase Minimum
Concentra Financial 2.4 AL $2,500
Zag Bank 2.35 N/R $5,000
Canadian Western Bank 2.3 AL $5,000
Home Equity 2.3 N/R $5,000
ICICI Bank Canada 2.26 N/R $1,000
Home Trust 2.25 BBB $5,000
B2B Bank 2.2 AL $1,000
Equitable Bank 2.2 BBBL $5,000

Where did my spacing go????

November 4, 2015
5:21 pm
Loonie
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I don't know enough about the ratings systems to help you.

I did have GICs with B2B for several years through a rate broker but found their renewal offers were not competitive. I finally got rid of them. So I wouldn't hold out much hope for them getting better in future.

My fathe was pretty savvy and had GICs with Concentra for many years and some with Cdn Western I think, no problems. He also had some with a Trust Co that went bust in the 1980s, but he got his money back from CDiC in due course and without hassle - it just took a while.

That's not much help, but it's what I know.

November 4, 2015
6:31 pm
Norman1
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HTML ignores multiple spaces unless one uses a <pre> tag. Perhaps you intended something like this:

Issuer                5 Year   DBRS Rating1   Purchase Minimum
Concentra Financial    2.4         AL          $2,500
Zag Bank               2.35        N/R         $5,000
Canadian Western Bank  2.3         AL          $5,000
Home Equity            2.3         N/R         $5,000
ICICI Bank Canada      2.26        N/R         $1,000
Home Trust             2.25        BBB         $5,000
B2B Bank               2.2         AL          $1,000
Equitable Bank         2.2         BBBL        $5,000
November 4, 2015
6:32 pm
Norman1
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kanaka said
...
So my question is.....should I be concerned about the DBRS rating or be satisfied with the CDIC coverage or the DCGM coverage?
....

It depends on how much one is depositing.

For amounts covered by deposit insurance from CDIC, the DBRS debt ratings aren't that important. Should the GIC issuer fail, CDIC will cover it.

The debt ratings are important to depositors when their deposits exceeds CDIC coverage.

It depends on whether one is depositing $50,000 or $5 million.

November 5, 2015
6:26 am
Koogie
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Post "sub-prime meltdown" you also have to question the validity and worth of the opinion of any of these rating agencies.

I view them as akin to the credit reporting bureaus. ie: they are "experts" forming an opinion based on whatever small, incorrect or outdated information they can get their hands on.

November 5, 2015
10:19 pm
kanaka
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Norman1 said

kanaka said
...
So my question is.....should I be concerned about the DBRS rating or be satisfied with the CDIC coverage or the DCGM coverage?
....

It depends on how much one is depositing.

For amounts covered by deposit insurance from CDIC, the DBRS debt ratings aren't that important. Should the GIC issuer fail, CDIC will cover it.

The debt ratings are important to depositors when their deposits exceeds CDIC coverage.

It depends on whether one is depositing $50,000 or $5 million.

Thanks......I will not exceed coverage...

November 5, 2015
10:20 pm
kanaka
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Koogie said

Post "sub-prime meltdown" you also have to question the validity and worth of the opinion of any of these rating agencies.

I view them as akin to the credit reporting bureaus. ie: they are "experts" forming an opinion based on whatever small, incorrect or outdated information they can get their hands on.

How cynical. You sound like me.sf-surprised

December 6, 2015
4:45 am
dentgal
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i would double check the CDIC website and make sure that the institution is on their list. Then you can go for up to $100,000.
Sometimes you can open a 2nd account and add another member of your family's name so that you get another $100,000 coverage from CDIC.

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