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Email this9:29 am
February 20, 2018
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Do it all the time, borrow at prime usually less than a month on credit line, to take advantage of a good rate, issue n maturity dates dont always align. Wondering now with rates dropping like a rock if its a good time to buy ahead leverage further out into the summer. Thinkin about the math.
9:36 am
December 12, 2009
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Bud said
Do it all the time, borrow at prime usually less than a month on credit line, to take advantage of a good rate, issue n maturity dates dont always align. Wondering now with rates dropping like a rock if its a good time to buy ahead leverage further out into the summer. Thinkin about the math.
I'm not seeing the logic here, sorry. Most banks' prime rates are at what, 3.95% right now?
I guess there's some logic to this, in terms of GICs you have maturing in a few months, but at the same time, it's going to cost you even more now as the banks haven't necessarily adjusted their prime rates down commensurately with the BoC overnight rate.
Cheers,
Doug
10:13 am
October 21, 2013
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I do this, but I borrow from myself, as it were, and there is no cost, only gain.
I keep a lot of cash for a number of reasons. If GIC maturing in, say, 3 months, I consider if I am OK with having less cash for 3 months, and usually the answer is yes.
I am currently fiddling with GICs coming due later this month and in September to see if I still have enough cash to keep me happy if I buy more GICs. Have an appointment with Oaken today and also bought some yesterday. That will be all for this round.
None of this works though for registered accounts as there is no wiggle room. Very annoying. My average return on registered GICs is almost always lower than on non-registered because of this.
5:37 pm
February 20, 2018
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do the math if a 3yr 4yr 5yr even 2yr gic falls 50-100bps or more from 2.4-2.75% to 1.5-1.9 say, further it's conceivable, would it be prudent to borrow for 6mths at 3-3.5 even 3.95 as prime will fall to purchase a Gic in advance
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