GIC rates offered by brokers - Advise of decent rates? | GIC discussions | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
GIC rates offered by brokers - Advise of decent rates?
May 23, 2019
6:54 pm
GICinvestor
Member
Members
Forum Posts: 670
Member Since:
April 26, 2019
sp_UserOfflineSmall Offline

In another thread it was mentioned about the odd good GIC rate on Dominion Securities RBC site. Luckily they offer a PDF list without logging on. I have iTrade which you have to log on to see rates. I contacted Qtrade which I believe a lot of BC credit unions use but they would not give rates...I assume they will only talk to you if you have an account. But why would I apply for one if I did not know if they had good rates? The last sentence was a rant.

Never the less.

Is there a way if promos could accept on line discount brokerage GIC rates if they were exceptional? Or weekly dated PDF copies to be submitted to a google cloud account to be accessed through this site. OR?

I am not suggesting an excel file that would be high maintenance, be sloppy to view, and difficult for one person to have access to all. But a number of us could submit brokerage rates weekly.

Could also include brokers like, although, for some reason I have a trust issue with this one, if you scroll down.

I noticed a lot of the common FIs on iTrade and DS RBC had the same rates.

Is this worthwhile?

May 23, 2019
7:11 pm
Bud
Member
Banned
Forum Posts: 1375
Member Since:
February 20, 2018
sp_UserOfflineSmall Offline

I keep an eye on Rb dominions link when it starts to move i check a few others but it would be very convenient if they could all be linked one after another in a thread. Someone will have to make the effort.. Anomalies are rare I remember years ago Keb korea bank had a gic rate that was like 1% better than the highest thought it a mistake but it was on offer.

May 23, 2019
8:10 pm
AltaRed
BC Interior
Member
Members
Forum Posts: 2056
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline

I doubt there is enough variation between brokerages to make it worthwhile. I look at both BMOIL and ITrade regularly and for the same issues, the rates are the same.

May 23, 2019
8:19 pm
GICinvestor
Member
Members
Forum Posts: 670
Member Since:
April 26, 2019
sp_UserOfflineSmall Offline

Or another tab called permanent links.
Ie
1. Permanent Links
2. GIC rates for online brokerages
3. ITrade or?
4. Then a list ie
Itrade GICs May 23 2019
Itrade GICs May 30 2019
Etc, with most recent at top. I don’t know how that would be done.
Each donator would submit by the same title and only the date would change. Ie iTrade-GICRates-May-30-2019. Each donator could use their own Google Cloud Account.

Then the permanent links tab could have more.
Ie current rates for websites as listed in the GIC HISA tabs
Ie links to Peters other sites

May 23, 2019
8:25 pm
Bud
Member
Banned
Forum Posts: 1375
Member Since:
February 20, 2018
sp_UserOfflineSmall Offline

There's about 5 or 6 names variation if the sky was falling it becomes more meaningful. In a last chance to get rate environment i'd make the effort to pick up yield. I haven't cross referenced when RB is offering ABC@2.75 is BMO offering the same on ABC..

May 23, 2019
8:25 pm
GICinvestor
Member
Members
Forum Posts: 670
Member Since:
April 26, 2019
sp_UserOfflineSmall Offline

AltaRed said
I doubt there is enough variation between brokerages to make it worthwhile. I look at both BMOIL and ITrade regularly and for the same issues, the rates are the same.  

But would it interest others? Not knowing all the different CDIC FIs on one site? But usually lower rates. And of course a warning to know the brokerages fees (or minimums to avoid fees) for non registered, TFSA, RRSP or RRIF accounts. I usually forget there are fees because I only use iTrade for TFSA GICs.....and there are no fees for TFSA.

May 23, 2019
8:28 pm
GICinvestor
Member
Members
Forum Posts: 670
Member Since:
April 26, 2019
sp_UserOfflineSmall Offline

hotmony said
There's about 5 or 6 names variation if the sky was falling it becomes more meaningful. In a last chance to get rate environment i'd make the effort to pick up yield. I haven't cross referenced when RB is offering ABC@2.75 is BMO offering the same on ABC..  

The quick one I did from your RBC list to my iTrade and the rates were identical for the same FI.

May 23, 2019
8:30 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3815
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

I think we need to be careful with broadening out the mandate of the site too much. Adding too much requires a lot more updating, so I'm all for brokerage GIC rates being discussed, but I think the system we have is a good one (that is, create a thread following a consistent subject heading naming scheme like the one I outlined here and then attach a link to a shared spreadsheet of some type). The one I linked to follows this theme and focuses on Scotia iTRADE and Virtual Brokers. Someone else could create a thread for "Brokerage GIC Rates (BMO InvestorLine)" and so forth.

There was talk of Peter maybe making a "Resources" webpage on this site, that links to relevant forum threads and directly to various shared spreadsheets and/or documents. I think that's the approach we should take and I'd certainly support moving forward with that. The community can take that on of updating the spreadsheets periodically, but not necessarily on a frequent or set schedule.

Cheers,
Doug

May 23, 2019
8:43 pm
GICinvestor
Member
Members
Forum Posts: 670
Member Since:
April 26, 2019
sp_UserOfflineSmall Offline

In the event of a volunteer having to drop out for some reason Peter may want to explore this as it would expand his volunteer talent that would silently take the task at hand vs trying to own this site. And also give him a broader site full of information.

May 24, 2019
8:48 am
AltaRed
BC Interior
Member
Members
Forum Posts: 2056
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline

GIC rates change regularly on discount brokerage sites, often weekly, so I don't know how helpful that would be. During times of more rapid interest rate changes, I've seen more than one change a week at Scotia iTrade.

Some discount brokerages such as Scotia iTrade and RBC DI have more issuer offerings than others, and that might provide an anomaly where Scotia could have an issuer with a marginally higher GIC rate than its competitors (I've seen this from time to time over the past several years), but it is not common.

Of the big 5 banks, I think it is only RBC DI, Scotia iTrade and BMOIL have fully automated online purchasing of GICs. None of the brokerages above charge the buyer a commission to purchase GICs in any kind of account (non-reg or registered). The commission is buried in the rate at 25bp (what is shown online is what the buyer gets). That is one reason why, for example, a Home Trust GIC at a discount brokerage has a lower yield than an Oaken Financial GIC directly online.

May 24, 2019
1:11 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3815
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

AltaRed said
GIC rates change regularly on discount brokerage sites, often weekly, so I don't know how helpful that would be. During times of more rapid interest rate changes, I've seen more than one change a week at Scotia iTrade.

Some discount brokerages such as Scotia iTrade and RBC DI have more issuer offerings than others, and that might provide an anomaly where Scotia could have an issuer with a marginally higher GIC rate than its competitors (I've seen this from time to time over the past several years), but it is not common.

Of the big 5 banks, I think it is only RBC DI, Scotia iTrade and BMOIL have fully automated online purchasing of GICs. None of the brokerages above charge the buyer a commission to purchase GICs in any kind of account (non-reg or registered). The commission is buried in the rate at 25bp (what is shown online is what the buyer gets). That is one reason why, for example, a Home Trust GIC at a discount brokerage has a lower yield than an Oaken Financial GIC directly online.  

Agreed, though with regard to deposit broker commissions, if they're being paid to the likes of Scotia iTRADE, that'd have to be disclosed on the Annual Performance and Fee Statement Scotia iTRADE is obligated to provide. The fact that Scotia iTRADE's Home Trust GIC rates match the published Home Trust deposit broker rates suggests they're not taking a cut; Home Trust just benefits from lower interest expense due to the ease of raising deposits in the brokerage channel.

For the most part, what I've observed from Questrade's, Scotia iTRADE's, RBC DI's, and Virtual Brokers' brokerage GIC rates, they charge no premium to the published deposit broker rates available on CANNEX. I see no need to replicate the good work that CANNEX does (though, if Peter does add a "Resources" page, he could link to their deposit rates page in the relevant section(s), perhaps). Sure, CANNEX doesn't provide detailed GIC rate histories, but that's time consuming and serves no purpose other than satisfy our personal fascinations!

What would be more useful, also volunteer-maintained and ideally on a "Resources" page would be an occasionally updated list of GIC issuers at the major discount brokerages. From there, we can then evaluate which DB consistently offers the most fulsome listing of GIC issuers and, of which, which ones have typically the best rates. In short, we can look at the volunteer-maintained GIC issuer spreadsheets then look to CANNEX for up-to-date rates.

Cheers,
Doug

May 24, 2019
2:00 pm
AltaRed
BC Interior
Member
Members
Forum Posts: 2056
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline

Doug said

Agreed, though with regard to deposit broker commissions, if they're being paid to the likes of Scotia iTRADE, that'd have to be disclosed on the Annual Performance and Fee Statement Scotia iTRADE is obligated to provide. The fact that Scotia iTRADE's Home Trust GIC rates match the published Home Trust deposit broker rates suggests they're not taking a cut; Home Trust just benefits from lower interest expense due to the ease of raising deposits in the brokerage channel.

 

And they are disclosed in the Annual Performance and Fee Statement.

https://www.moneysense.ca/columns/ask-moneysense/why-am-i-paying-a-commission-when-i-invest-in-gics/ is a good article on this subject.

May 24, 2019
3:32 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3815
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

AltaRed said

Doug said

Agreed, though with regard to deposit broker commissions, if they're being paid to the likes of Scotia iTRADE, that'd have to be disclosed on the Annual Performance and Fee Statement Scotia iTRADE is obligated to provide. The fact that Scotia iTRADE's Home Trust GIC rates match the published Home Trust deposit broker rates suggests they're not taking a cut; Home Trust just benefits from lower interest expense due to the ease of raising deposits in the brokerage channel.

 

And they are disclosed in the Annual Performance and Fee Statement.

https://www.moneysense.ca/columns/ask-moneysense/why-am-i-paying-a-commission-when-i-invest-in-gics/ is a good article on this subject.  

Ah, interesting, AltaRed. Thanks. I was wondering whether or not they were being paid a commission. Since I've never bought a GIC through them, I didn't have "proof". It's too bad it wasn't more transparent (i.e., you could see the rate they offer you versus the Home Trust deposit rate, let's say), but nonetheless, I'm fine with it. It's the price of convenience and it sounds like you use GICs heavily with Scotia iTRADE. Would you say that most of your GIC assets tend to be held through a brokerage or directly with individual FIs? (Another advantage: one's future executor(trix) will thank you if most of your assets are in one place.)

Was looking at the BMO Discount Bond ETF...do you ever scour its holdings for potential fixed income ideas, if they fit your duration and credit risk profile, for buying bonds trading at or at a discount to their par value? The objectives of the ETF state that the fund will buy bonds trading at 1.2, 1.0, or less times their yield to maturity.

Cheers,
Doug

May 24, 2019
4:44 pm
AltaRed
BC Interior
Member
Members
Forum Posts: 2056
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline

All my GICs (and bonds for that matter) are in my RRSP at iTrade. That said, my RRSP is only 7% of my invested net worth. I don't look at any bond ETFs. I simply look at iTrade's inventory where they provide all the info I need to make a decision.

I have a non-reg account, RRSP, and TFSA at iTrade and a non-reg account at BMOIL. My banking is at Scotia and I have an HISA at EQ. That is it. I purposely KISS.

May 24, 2019
7:13 pm
gicjunkie
Ontario
Member
Members
Forum Posts: 581
Member Since:
November 7, 2014
sp_UserOfflineSmall Offline

Regarding GIC commissions: I often use a deposit broker for GIC purchases. The reasons are as follows.

1. Some institutions, for whatever reason, do not want to sell GICs directly to the public. They would rather download the effort to the broker and pay them a commission to do it. If the GIC rate is good, I'll take advantage of it. The broker ensures that you receive your interest payment and final principal payment on time.

2. Sometimes the institution actually goes against conventional thinking and offers a better rate through the broker than direct to the consumer. This has happened with some credit union offerings. If you notice this, as I have, you could speak to the FI directly to see if they will match or better the rate. They often will match and sometimes do a little better. There are actually 2 different philosophies here. Do you wish to go to the trouble to become a credit union member and possibly share in the profit sharing some offer or do you just want to participate in the GIC interest benefits as an outsider, with no strings? Whatever works for you.

I have, on a couple of occasions, chewed out credit unions for offering better rates through brokers than direct to their members. After all, credit unions advertise the "personal touch" as a selling point to attract new members. It's not very personal to offer better rates to outsiders. They have said that they understood my point and offered me the same rate as the broker, sometimes a little better. Never hurts to speak your mind, in a polite way.

May 24, 2019
7:17 pm
Bud
Member
Banned
Forum Posts: 1375
Member Since:
February 20, 2018
sp_UserOfflineSmall Offline

This website is more relevant than cannex

May 24, 2019
10:12 pm
Norman1
Member
Members
Forum Posts: 5464
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

gicjunkie said

I have, on a couple of occasions, chewed out credit unions for offering better rates through brokers than direct to their members. After all, credit unions advertise the "personal touch" as a selling point to attract new members. It's not very personal to offer better rates to outsiders. They have said that they understood my point and offered me the same rate as the broker, sometimes a little better. Never hurts to speak your mind, in a polite way.

The staff and physical branch to provide that "personal touch" are not free. In addition, there is the cost of parking the funds at a loss until the funds can be lent out.

All that can cost the credit union and other small financial institutions more than the customary ¼%-per-GIC-year commission paid to a deposit broker.

May 25, 2019
12:35 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3815
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

Norman1 said

gicjunkie said

I have, on a couple of occasions, chewed out credit unions for offering better rates through brokers than direct to their members. After all, credit unions advertise the "personal touch" as a selling point to attract new members. It's not very personal to offer better rates to outsiders. They have said that they understood my point and offered me the same rate as the broker, sometimes a little better. Never hurts to speak your mind, in a polite way.

The staff and physical branch to provide that "personal touch" are not free. In addition, there is the cost of parking the funds at a loss until the funds can be lent out.

All that can cost the credit union and other small financial institutions more than the customary ¼%-per-GIC-year commission paid to a deposit broker.  

Great points, Norman, since net interest income makes up the lion's share of a bank's or credit union's total revenue. That being said, there's two huge disadvantages to going with solely deposit broker sourced deposits, that is that:
(1) Those deposits are far less sticky (i.e., to remain with you at renewal time, unless you're still the highest in the marketplace); and
(2) You don't have the cross-sell advantage of the branches and an internal contact centre provide.

That second point is arguably the more important of the two since deposits can walk elsewhere if you remain no longer competitive on rates in either channel.

In this way, though, while branches and a contact centre are indeed a higher cost, they shouldn't be seen as primarily there for the customer's convenience. There's as much a benefit to the financial institution than to the customer (arguably more of a benefit to the financial institution). As well, they could still match deposit broker GIC rates with an online banking GIC rate special. Branches could still promote it, but clients would have to book it themselves online. Some FIs do this; however, some, evidently Coast Capital Savings, seem to prefer to give deposit brokers preferential rates on occasion.

@Rick, anything else to add on this? 😉

Cheers,
Doug

May 26, 2019
9:40 am
Norman1
Member
Members
Forum Posts: 5464
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

I don't think having an online-only rate special for the GIC will do it. The credit union is still on the hook to pay the branch staff and for the branch itself, even when the GIC is booked online.

With the deposit broker, the financial institution only needs to pay the broker as needed. I think that ¼% deposit brokerage commission is supposed cover some of the deposit broker's overhead. I don't think it actually costs anywhere near $50,000 x ¼% x 3 = $375 to accept the paperwork and cheque for a 3-year, $50,000 GIC.

Sticky deposits are not always welcome. If the mortgages and loans that were funded by the deposit have been paid off or transferred out, then it would be preferable for the deposit to also leave. Otherwise, the money would have to be parked at a loss until it could be lent out again.

Cross selling sounds good. But, I don't think it really works out that way. People coming into a branch for a GIC are annoyed to be pitched for a credit card, mutual funds, or insurance. Loonie's story My little chat with the TD branch financial planner is indicative of what the customers feel about the cross selling.

Please write your comments in the forum.