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All GIC rates decrease
March 18, 2023
2:40 pm
HermanH
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Rail Baron said
Now, I'm looking at Peoples Bank to move proceeds of GICs that come due later this month. 5.3% looks better than 4.85%.  

If you are within a month of maturity, it would be a good idea to open the GIC account at Peoples Bank, in order to hold the rate. They will hold a rate for 30 days. Just make certain to specify the date of maturity on the Transfer application form.

I am planning an April 21 TFSA transfer from EQ and sent the paperwork. Unfortunately (or not), PTrust sent the application to EQ and EQ asked me what was happening, since the EQ GIC had not yet matured. I told EQ that I sent it to PT and that they knew and understood not to expect the funds until GIC maturity. Hopefully, that will be sufficient and I will not need to re-submit a new application upon maturity.

March 18, 2023
3:36 pm
Dean
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gicjunkie said

Interesting timing considering the fact that, although many are expecting interest rates to hold firm for a while, some "financial experts" are actually predicting another BoC rate hike of .25% on April 12. I guess we'll have to wait to see who the real experts are.  

As we know, those so-called 'Financial Experts' are often Wrong. And we also know ... 'Never' use their predictions to bet the Farm. sf-wink

As for the upcoming April 12th BoC decision, I wouldn't be surprised if their rate went Up another 0.25%. But if it does, it will most likely have little to no effect on GIC rates, as there are too many other factors involved, that will likely keep the GIC rates pretty much as they are.

My Two Centavos,

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

March 18, 2023
6:40 pm
Rail Baron
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HermanH said
If you are within a month of maturity, it would be a good idea to open the GIC account at Peoples Bank, in order to hold the rate. They will hold a rate for 30 days. Just make certain to specify the date of maturity on the Transfer application form.

I am planning an April 21 TFSA transfer from EQ and sent the paperwork. Unfortunately (or not), PTrust sent the application to EQ and EQ asked me what was happening, since the EQ GIC had not yet matured. I told EQ that I sent it to PT and that they knew and understood not to expect the funds until GIC maturity. Hopefully, that will be sufficient and I will not need to re-submit a new application upon maturity.  

Thanks for the advice. I've got funds maturing next week, so I'm going to wait a couple of days more to open the GIC online.

If I could count on speaking to a human at PB, I'd be more confident of setting a forward date on the GIC funding, but I don't want to have an overdraft issue with TD, and I have no confidence that PB wouldn't try and pull the funds too soon.

I'll start the application on Monday or Tuesday.

March 19, 2023
12:08 am
smayer97
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Dean said

As we know, those so-called 'Financial Experts' are often Wrong. And we also know ... 'Never' use their predictions to bet the Farm. sf-wink

As for the upcoming April 12th BoC decision, I wouldn't be surprised if their rate went Up another 0.25%. But if it does, it will most likely have little to no effect on GIC rates, as there are too many other factors involved, that will likely keep the GIC rates pretty much as they are.

My Two Centavos,

    Dean

  

Rates are 100% dictated by the short-term bond market! (I heard about this some time ago but I recently went and proved it to myself.) Rates have recently suddenly fallen about 0.33% in the Canadian market. The US market has fallen an average of 0.6% but is very volatile, with a range of 0.4 to 0.9% drop.

So I expect the CDN rate to hold or drop 0.25% if this holds, even more if the trend continues down. Of course, there is still almost 4 weeks to go for the next CDN rate announcement.

The US rate will be announced in 3 days. They may hold in the short term to the next announcement or provide some immediate relief.

The National bank or Reserve does not drive the rates! They ALWAYS follow!

March 19, 2023
5:10 am
savemoresaveoften
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Dean said

As we know, those so-called 'Financial Experts' are often Wrong. And we also know ... 'Never' use their predictions to bet the Farm. sf-wink

As for the upcoming April 12th BoC decision, I wouldn't be surprised if their rate went Up another 0.25%. But if it does, it will most likely have little to no effect on GIC rates, as there are too many other factors involved, that will likely keep the GIC rates pretty much as they are.

My Two Centavos,

    Dean

  

If BoC goes 25bps, that will help to keep 1y and 2y GIC in the high 4% low 5% area. If BoC hold rates unchanged, it wil be hard to find a GIC with a 5% handle.
I have a laddered GICs in my fixed income portion rolling over the next 6 months. So higher rates will suit but I also separate reality from wishes. The tough decision is what term to choose on the renewal over the next 6 months.
If Fed on hold this Wednesday, BoC will pause too in April.

March 19, 2023
8:02 am
Winnie
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I think, that Hubert decreased all GIC rates, because they listened to some "financial experts", who are actually predicting BoC rate to be reduced .25% on April 12, because of banking problems in the USA.
Those "financial experts" say, that BoC will be forced to reduce BoC rate, BoC will have no choice.

That is what I heard and just making assumption, that Access CU also heard the same "financial experts".
Or, just maybe Access CU have way too much deposits?

March 19, 2023
8:58 am
cgouimet
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Winnie said
I think, that Hubert decreased all GIC rates, because they listened to some "financial experts", who are actually predicting BoC rate to be reduced .25% on April 12, because of banking problems in the USA.
Those "financial experts" say, that BoC will be forced to reduce BoC rate, BoC will have no choice.

That is what I heard and just making assumption, that Access CU also heard the same "financial experts".
Or, just maybe Access CU have way too much deposits?  

I agree that Hubert's 5% 1Year-Quaterly GIC likely attracted more funds than they needed to fund their loan business.

As the financial expert in this household of 2, I would be surprised to see the BoC lower rates on Apr 12.

BTW Access and Hubert can now be considered the same FI.

CGO
March 19, 2023
9:13 am
savemoresaveoften
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Think u did a typo as next meeting is Apr12.
Based on what we have seen or known so far, Tiff does not have any solid reason to fall on to cut rates just yet. Keeping it unchanged but mention BoC will be quick to respond is what he will do if Fed chooses to sit out the next hike. Within the Fed, I can imagine a tug of war btw 25bps hike vs nonchnagr, prob even see 1 guy vote for cut. Decision won’t be unanimous this time.
Exciting times.

March 19, 2023
9:53 am
cgouimet
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savemoresaveoften said
Think u did a typo as next meeting is Apr12.
Based on what we have seen or known so far, Tiff does not have any solid reason to fall on to cut rates just yet. Keeping it unchanged but mention BoC will be quick to respond is what he will do if Fed chooses to sit out the next hike. Within the Fed, I can imagine a tug of war btw 25bps hike vs nonchnagr, prob even see 1 guy vote for cut. Decision won’t be unanimous this time.
Exciting times.  

Yes. Thank you. Sticky keyboard.

CGO
March 19, 2023
10:54 am
smayer97
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Winnie said
I think, that Hubert decreased all GIC rates, because they listened to some "financial experts", who are actually predicting BoC rate to be reduced .25% on April 12, because of banking problems in the USA.
Those "financial experts" say, that BoC will be forced to reduce BoC rate, BoC will have no choice.

That is what I heard and just making assumption, that Access CU also heard the same "financial experts".
Or, just maybe Access CU have way too much deposits?  

As I pointed out, rate rates FOLLOW the short-term bond markets. Don't need to be an expert to read the charts. The only question is typically timing. So both amount of rate change and when is not very hard to predict.

March 19, 2023
11:12 am
Norman1
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cgouimet said

I agree that Hubert's 5% 1Year-Quaterly GIC likely attracted more funds than they needed to fund their loan business.

 

Yes, that's all it is. Access CU is a lender and not a bond fund. Deposits are raised to be loaned out.

Access CU will try to set deposit rates at the lowest point that will bring in deposits at a pace that matches the pace they are originating matching loans.

No need for flaky economic forecasts or central bank gazing. They can just monitor their own deposit flow which they can determine in real time with 100% accuracy.

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