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LIF in GIC's
July 3, 2018
8:06 am
Nehpets
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Which financial institutions accept LIFs invested in GIC's?

Stephen

July 3, 2018
3:44 pm
Loonie
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I believe the Big Banks all do.
I cashed mine out as it was such a nuisance. This is what I recommend if you have a smallish amount and can do this, but you are stuck with a lot of rules if you have a larger amount.
I believe the larger, more established bricks-and-mortar credit unions also offer these. I'm thinking of DUCA and Meridian, but probably not online.

July 3, 2018
5:14 pm
Nehpets
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Loonie said
I believe the Big Banks all do.
 

They do, Loonie as do many if not most insurance companies; however their rates are unattractive.

My LIF is administered by a broker, but the available rates, even through the broker, this year are less attractive than in previous years, so I'm exploring my options.

LIFs are troublesome, mostly because, it seems FI's tend to take advantage of the fact that the funds are locked in and that there are admin costs to the FI.

I've already checked and Oaken, with its decent rates, does not take LIFs.

I will check Meridian however..thanks for the tip!

In the end, I may just hold my nose and save myself aggravation and renew through the existing broker...

July 4, 2018
4:49 am
Loonie
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I'm fairly sure about Meridian, the more I think of it, because I remember asking my advisor there what I could do with it if I brought it to him. It was a kind of "test" question, as I did't think there was anything worth bothering with.
He gave me totally the wrong suggestion, one that absolutely would not have worked for a LIF, but he did not say that they don't deal with them. He knew what they were and knew some of the restrictions.

If you did decide to move it to some place like Meridian, you'd probably only have to do it once, just to get it away from the underperforming broker. There won't likely be a lot of better offers in future. The no frills places that most of us deal with are unlikely to ever offer them, IMO.

Let us know how you make out!

July 4, 2018
10:08 am
Norman1
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Perhaps a different broker could provide better rates?

Currently, these are the top rates of annual-pay GIC's are available through discount broker Scotia iTRADE:

1 year 2.25% (Bank of Nova Scotia, ADS Canadian Bank, …)
2 year 2.65% (Zag Bank)
3 year 2.84% (Canadian Western Bank)
4 year 3.00% (Concentra Bank)
5 year 3.15% (Canadian Western Bank, Concentra Bank)

There will be a $100 per year admin fee for the LIF if aggregate of accounts is less than $25,000 and fewer than 12 commissionable trades per year.

July 4, 2018
2:47 pm
Nehpets
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Norman1 said
Perhaps a different broker could provide better rates?
  

Norman,

Thanks for the additional information. As it turned out, the current broker took another look at his list of FI's and found that Street Capital 2.4% and Haventree 2.3% (one year....two relative newcomers to the deposit market, offered better GIC rates for LIF's than were previously available from other FI's.

Other brokers I've communicated with either don't handle LIFs, or have a very limited number of investment choices for GIC's.

This particular broker has a larger, diversified stable of FI's and, fortunately, on a second look was able to find a satisfactory placement.

The conclusion is that my problem is solved for this year.

Thanks for the input!

Stephen

July 4, 2018
10:08 pm
Norman1
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Nehpets said

Thanks for the additional information. As it turned out, the current broker took another look at his list of FI's and found that Street Capital 2.4% and Haventree 2.3% (one year....two relative newcomers to the deposit market, offered better GIC rates for LIF's than were previously available from other FI's.

The conclusion is that my problem is solved for this year.

That's good to hear. Deposit rates, especially with the smaller financial institutions, can fluctuate daily.

Your deposit broker did well for you with Street Capital Bank. The current posted rate on Cannex for a one-year GIC ($5,000+) from Street Capital Bank is 2.18%.

July 5, 2018
1:55 am
Loonie
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That's better than Meridian too!

July 5, 2018
7:07 pm
Norman1
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Meridian CU seems to have more than one rate for their one-year GIC.

On their web site, the long-term one-year non-redeemable GIC is 2% (minimum $100).

On deposit broker Fiscal Agents site, there is an agent rate of 2½% (minimum $10,000).

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