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GIC Direct GIC offering
July 15, 2021
4:16 pm
Alexandra
British Columbia
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I see GIC direct is offering through Haventree Bank a 3 yr term GIC for 2.15% & a 5yr term GIC @2.3%. Both must have a minimum deposit of $25K.

July 17, 2021
6:12 am
hwyc
GTA
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July 17, 2021
8:45 am
davidgeorge
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How this works? Do we have an account with GIC direct, or Haventree Bank if we purchase the GIC?

July 17, 2021
10:37 am
gicjunkie
Ontario
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davidgeorge said
How this works? Do we have an account with GIC direct, or Haventree Bank if we purchase the GIC?  

You have to contact the broker and open an account with them. There is no cost for this. They make money off of investment commissions with their participating financial institutions. Your "account" is with the broker, but your investment is with the financial institution, eg. Haventree. Your deposit insurance is based on the total value of your investments with the financial institution. Sometimes your interest earned is sent by cheque to the broker and forwarded on to you and sometimes it is paid directly to you, the investor. The cheque is always paid by the financial institution to you or direct deposited to your bank account.

The broker is the middleman who arranges the investment. There are numerous brokers to choose from. Just make sure they are registered, reputable brokers prior to using them. I have used GIC Wealth Management in the past and have been very satisfied with their service, but again, there are numerous fine brokers out there. Some financial institutions use many brokers to sell their products and some have an exclusive arrangement with one broker. It's a good idea to check out numerous broker offers before deciding who will handle your investment.

July 17, 2021
11:14 am
Norman1
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Offerings can differ between deposit brokers.

For example, GIC Wealth is also offering 5-year GIC's for 2.35%. But, that offer is for a $100,000 minimum investment:

1 year 1.40%*** *Minimum Investment $25,000
**Minimum Investment $50,000
***Minimum Investment $100,000
2 year 1.75%***
3 year 2.15%*
4 year 2.25%***
5 year 2.35%***
July 17, 2021
4:18 pm
davidgeorge
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@gicjunkie, thanks for the helpful information. I don't understand why FIs don't offer clients the great GIC rates directly, but pay middleman to get the rates to clients, which is not a good strategy, in my opinion, especially in today's online banking environment.

July 17, 2021
6:24 pm
Norman1
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The financial institution may not want to pay those rates on a continual basis.

Through a deposit broker, the financial institution can yank a special rate at the end of the business day, after raising the desired amount of deposits, without ruffling any feathers. Deposit brokers have prepared their GIC buyers that rates offered are only good until the end of the day. Tomorrow, the rate may be gone.

According to their rate page, Haventree Bank's regular 5-year GIC rate is actually just 1.2%.

July 18, 2021
4:31 am
Loonie
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An established GIC broker will have, in addition, corporate clients who must put away very large amounts. For some, a good rate and the convenience of a deposit broker, makes sense, so they have no difficulty producing 100K to invest. I have reason to believe a lot of their business comes this way.

July 18, 2021
6:59 am
gicjunkie
Ontario
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davidgeorge said
@gicjunkie, thanks for the helpful information. I don't understand why FIs don't offer clients the great GIC rates directly, but pay middleman to get the rates to clients, which is not a good strategy, in my opinion, especially in today's online banking environment.  

Some financial institutions do not want to market these products directly to the consumer. One FI tried to explain to me that it was a matter of convenience and cost savings to have a broker deal with all the sales and paperwork issues.

Regarding credit unions using brokers, I also addressed the issue that as a credit union member, I was offended that non-members were being offered higher GIC rates than members. That credit union recognized my concern and offered to give the broker's rate to me directly. If you are already a member it doesn't hurt to ask for the broker rate. Having said that, some people like to get the credit union rates without the hassle of becoming a member. so they are happy to use a broker.

July 18, 2021
7:12 am
gicjunkie
Ontario
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Just a reminder that , if you are in Ontario, Tandia Financial Credit Union now seems to have the best 4 and 5 year GIC rates around. Yes, I know, rates will increase at some point, but for those of you (including myself) who ladder their investments, these rates may have current relevance.

4 year 2.30%
5 year 2.50%

Only a $500.00 minimum investment.

https://www.tandia.com/personal/product-services/rates

When we joined we had to visit a branch (locations primarily in the GTA and Hamilton areas)

July 18, 2021
8:49 am
Alexandra
British Columbia
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gicjunkie said

Some financial institutions do not want to market these products directly to the consumer. One FI tried to explain to me that it was a matter of convenience and cost savings to have a broker deal with all the sales and paperwork issues.

Regarding credit unions using brokers, I also addressed the issue that as a credit union member, I was offended that non-members were being offered higher GIC rates than members. That credit union recognized my concern and offered to give the broker's rate to me directly. If you are already a member it doesn't hurt to ask for the broker rate. Having said that, some people like to get the credit union rates without the hassle of becoming a member. so they are happy to use a broker.  

I have always used GIC direct as my broker. But it has been my experience when purchasing a term deposit through a credit union, even through them (GIC direct), I still had to pay the $5.00 membership fee. I would get it back when the deposit was paid out providing I didn't have any other deposits with that particular C.U.

July 18, 2021
9:10 am
Bill
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Is the $5 fee a standard fee for those who only want to purchase a GIC? The credit union closest to my house wants $50 to be a member. Or maybe GIC brokers only deal with credit unions where the fee is a nominal amount.

July 18, 2021
9:59 am
Alexandra
British Columbia
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Bill said
Is the $5 fee a standard fee for those who only want to purchase a GIC? The credit union closest to my house wants $50 to be a member. Or maybe GIC brokers only deal with credit unions where the fee is a nominal amount.  

I paid a $5 membership fee (shares) with all my online Manitoba C.U. i.e. Achieva, Outlook, Hubert. And the BC credit union's that I applied for in person were all $5 as well.

If you look it up is says that Credit Unions currently charge between $5 and $25 for a membership (shares).

Here in BC, two of the biggest C.U. in Canada are VanCity and Coast Capital. They both still charge the $5 fee for a share.

July 18, 2021
11:41 am
Norman1
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Credit unions may have reduced share investment requirements for online-only or broker-only members.

Sunova CU allowed Hubert-only members to have just one $5 share.

In contrast, those who became Sunova members, at one point, had to buy five shares ($25) initially and buy ½ share per month until they owned 200 shares ($1,000). Look like that 200 share requirement is not in place any more.

July 18, 2021
3:37 pm
Loonie
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One of mine (Ont) charged 100, but I can't remember which one.

July 18, 2021
9:18 pm
Norman1
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Energy CU in Ontario currently requires $125 share purchase.

Used to be $25. Went up to $100 in April 2016. Will go up to $200 in the next four years.

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