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GICs through discount brokers
November 16, 2019
5:13 pm
AltaRed
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Discount brokerages like Scotia iTrade are simply order takers for a commission paid by the issuing parties. Rates are identical, or near identical, at all the discount brokerages although some will have more offerings than others.

Rates will almost always be lower than through other sales channels. That is the price of convenience where I can simply go into my online account at Scotia iTrade or BMO Investorline or RBC Direct Investing and buy. No chasing rates, no proliferation of accounts, etc. That is what many of us want for simplicity.

December 25, 2019
11:07 am
Norman1
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Norman1 said
The relationship between discount broker, deposit broker, and rate chasing still holding, almost two months later, after the rate drops from Oaken and Hubert:

Scotia
iTRADE
GIC Wealth
($25,000+)
Rate Chase
EQ Bank Oaken Hubert
1 year 2.23% 2.42%† 2.45% 2.50% 2.40%
2 year 2.31% 2.43%† 2.50% 2.60% 2.45%
3 year 2.34% 2.45%† 2.55% 2.65% 2.50%
4 year 2.34% 2.50% 2.57% 2.75% 2.55%
5 year 2.39% 2.60% 2.65% 2.85% 2.65%
† $50,000 minimum

A month later, Oaken has bumped up their rates and continues to lead. Some of financial institutions through deposit broker GIC Wealth have also upped their rates and are besting direct-to-consumer rates from EQ Bank and Hubert Financial for $25,000+ deposits!

Scotia
iTRADE
GIC Wealth
($25,000+)
Rate Chase
EQ Bank Oaken Hubert
1 year 2.17% 2.47% 2.40% 2.55% 2.40%
2 year 2.28% 2.49% 2.45% 2.65% 2.45%
3 year 2.30% 2.50% 2.50% 2.70% 2.50%
4 year 2.36% 2.52% 2.50% 2.80% 2.55%
5 year 2.50% 2.70% 2.60% 2.90% 2.65%
December 25, 2019
3:30 pm
Loonie
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The price of convenience can be steep.

According to Norman1's most recent figures, a $100,000 five year GIC will yield $113,141 through iTrade, $114,249 through GICWealth, and $115,366 at Oaken, at maturity.

Based on my own experience, assuming all these banking relationships are already in place, it would take about 15 minutes to compare the rates at Oaken aor GICWeatjh and to set up a transfer for a new GIC.

The difference in return between the one that pays best (Oaken) and the one that pays worst (iTrade) is $2,225. Let's assume it takes AltaRed 5 minutes to select and arrange a transaction through iTrade, RBC, or BMO. So, the net extra time is about 10 minutes. That's an hourly rate of $13,350 for the extra work and inconvenience involved. I don't think many of us would find that much value in the simplicity of not having an account at GiCWealth or Oaken, but each to their own.

December 25, 2019
5:22 pm
COIN
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The problem with transferring RRSP money from Institution A to Institution B is that it take anywhere from 2-4 weeks during which time you get no interest, plus there is usually a transfer out fee.

December 25, 2019
10:34 pm
Norman1
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One doesn't need to be transferring RRSP money back and forth. If one can accept a resulting rate that is much better but not the best, one can spread the RRSP money between the top three and leave the money there.

If Oaken is likely the highest with Hubert being #2 and EQ Bank being #3, then have something like:

  • 60% of the money with Oaken,
  • 25% with Hubert, and
  • 15% with EQ Bank.
December 25, 2019
11:05 pm
Loonie
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It depends on the size of your RSP/RIF. You can only insure 200K incl interest with Oaken, and, as we have seen, Oaken is potentially vulnerable so that most would probably not choose to exceed insurance limits.

As for fees, neither Oaken nor Hubert have any transfer out fees.

Does EQ even offer RSPs? I couldn't find any reference to them when I searched their site.

December 26, 2019
7:12 am
Norman1
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I just checked. EQ Bank doesn't offer registered accounts, RRSP or TFSA, yet.

For GIC's in RRSP's, one would need to pick another financial institution. Perhaps, Peoples Trust:

Scotia
iTRADE
GIC Wealth
($25,000+)
Rate Chase
EQ Bank Peoples
Trust
Oaken Hubert
1 year 2.17% 2.47% 2.40% 2.45% 2.55% 2.40%
2 year 2.28% 2.49% 2.45% 2.50% 2.65% 2.45%
3 year 2.30% 2.50% 2.50% 2.60% 2.70% 2.50%
4 year 2.36% 2.52% 2.50% 2.65% 2.80% 2.55%
5 year 2.50% 2.70% 2.60% 2.70% 2.90% 2.65%
December 27, 2019
1:27 am
Loonie
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However, Peoples doesn't offer RIFs as far as I know. This means you have to transfer at some point. A lot of forum members are at or near that point.

I'm not just nitpicking. It's not that easy to find good comparitors to Oaken for registered plans. Thus, I plan to return, reluctantly, to them for next year's TFSA contribution unless Peoples makes a better offer in the new year.

August 1, 2020
10:06 am
Norman1
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It has been a while since the last sampling of discount broker, deposit broker, and rate chasing rates.

Still better rates by shopping around oneself:

Scotia
iTRADE
GIC Wealth
($25,000+)
Rate Chase
EQ Bank Peoples
Trust
Oaken Hubert
1 year 0.74% 1.65% 1.50% 1.85% 1.85% 1.85%
2 year 0.89% 1.75% 1.50% 1.95% 1.95% 1.90%
3 year 0.97% 1.80% 1.50% 2.05% 2.05% 1.95%
4 year 1.10% 1.90% 1.60% 2.10% 2.15% 2.00%
5 year 1.42% 2.10% 1.80% 2.20% 2.30% 2.10%
August 1, 2020
1:03 pm
AltaRed
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A year from now, we may look back fondly on ANY 5 year GIC rate that breaks 2% or even 1.5%. Central bankers keep saying interest rates will remain very low for a very, very long time. Even HISAs at 1.5% will be hard to find.

When the competing GOC5 is rattling around 0.3% with no signs of strength, financial institutions are paying a hefty premium at 1% or more.

August 2, 2020
5:48 am
savemoresaveoften
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since the pandemic, the discount broker GIC rate for 3rd party is a laugh.
They can get away with it for registered account as the money is basically "captive", and their message is "buy our own GIC" as the spread is now a lot smaller than it used to be.

At the quoted rate, may as well park it in CSAV compared to their 1 year rate if the cash is stuck inside a registered account.

August 2, 2020
1:46 pm
Norman1
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AltaRed said

When the competing GOC5 is rattling around 0.3% with no signs of strength, financial institutions are paying a hefty premium at 1% or more.

Financial institutions are not able to borrow at those Government of Canada rates. Even the Government of Canada has some challenges doing do so. The Bank of Canada has been acting as a buyer when there isn't enough buyers otherwise through its Government of Canada Bond Purchase Program.

Bank of Canada support is not extended to financial institution bonds. Bonds of financial institutions are specifically excluded from the Bank of Canada's Corporate Bond Purchase Program.

August 2, 2020
3:50 pm
AltaRed
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I didn't mean direct purchases of GOC5 bonds, but debt that is correlated to short term bonds such as asset backed Commercial Paper and Banker's Acceptances http://www.rbc.com/economics/e.....ts/fmw.pdf

October 17, 2020
9:07 am
Norman1
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Rates are down since August. Deposit broker GIC Wealth has respectable $25,000+ rates for 3 to 5 years:

Scotia
iTRADE
GIC Wealth
($25,000+)
Rate Chase
EQ Bank Peoples
Trust
Oaken Hubert
1 year 0.72% 1.10%2 1.25% 1.45% 1.40% 1.50%
2 year 0.88% 1.45% 1.05% 1.55% 1.50% 1.55%
3 year 1.00% 1.65% 1.15% 1.65% 1.60% 1.65%
4 year 1.10% 1.75% 1.25% 1.70% 1.75% 1.70%
5 year 1.30% 2.06%1 1.50% 1.85% 2.00% 1.90%
1$50,000+, 2$100,000+
October 17, 2020
9:24 am
gicjunkie
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I find it amusing that what we are now calling "respectable" is 2.06% for 5 years. I recently got a 2.25% rate for 5 years from GIC Wealth which must now be considered terrific, though, I really didn't think so at the time.

October 17, 2020
9:33 am
hwyc
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Oh no … that "2.25% train" left the station … got to be full … curious who's the issuer

October 17, 2020
10:40 am
Norman1
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A single-branch credit union in Ajax, Ontario is currently offering close to 2¼% on five-year GIC's:

1 year 2 year 3 year 4 year 5 year
Equity Credit Union 1.30% 1.50% 1.75% 2.00% 2.15%

Need to live or work in Ontario to join.

October 17, 2020
11:17 am
hwyc
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Thkx Norman1 … you're the best

October 17, 2020
11:47 am
GR
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Norman1 said
A single-branch credit union in Ajax, Ontario is currently offering close to 2¼% on five-year GIC's:

1 year 2 year 3 year 4 year 5 year
Equity Credit Union 1.30% 1.50% 1.75% 2.00% 2.15%

Need to live or work in Ontario to join.  

This information is mainly of interest to those living or working in the eastern GTA. Even better rates than those above are likely available directly from Equity Credit Union in Ajax, Ontario. Cannex shows 1 year GIC at 1.70% (new money?). Also, a banner outside their storefront recently showed 2.25% for 1 year for $250,000.

October 17, 2020
12:11 pm
Norman1
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That is odd! Different rates on their own web site and on Cannex:

1 year 2 year 3 year 4 year 5 year
Equity Credit Union 1.30% 1.50% 1.75% 2.00% 2.15%
Equity Credit Union
(Cannex)
1.70% 1.80% 1.90% 2.00% 2.10%

Perhaps Equity CU didn't update their web site or their rates entered on Cannex! sf-embarassed

Another possibility is the rates on their own site are for those dealing directly with them and the Cannex rates are for those dealing through deposit brokers.

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