May 28, 2013
Got this today from Hubert:
"Our Happy Savings Account rate is changing. Effective Friday, August 30, our Happy Savings Account rate will be adjusted to 1.85%.
As always, at Hubert we promise to make sure our members are in the loop about what's going on, especially when it comes to our rates, products and services. So whether our rates are changing or we're introducing a great new service, we promise to let you know as soon as possible."
The savings rate is now a bit less 'happy'. And this while mortgage rates seem to be going up!
August 1, 2013
Rhvic, all savings accounts are variable rates. This means they can at their own decision can lower or increase their savings interest rate at anytime. You can see they gave a few days notice and that is it. This is why an investor and financially savvy person needs to have their money invested for a specific purpose.
If you need quick access to liquid money use a higher interest savings account. If you need money in 90 days or later, use a cashable GIC like Home Trust at 1.75% fixed 1 year cashable after 90 days with no penalty. You should have your money in different portions to balance between maximizing your long term overall average interest rate or bond yield from 1-5 years, 5-12 years, 12-25+ years.
The difference in annual interest earned and accrued can be huge. A 1 year GIC at 2.10% versus a 5 year GIC at 3.00%,TFSA, RRSP at 3.15%, 7 -9 year provincial strip bonds at 3.25% to 3.56%, 10-15 years 3.75% to 4.15%, 16-30 year provincial strip bonds, bonds 3.90%, 4.15% to 4.10% to 4.38%.
These are all current GIC rates, net yields after commission provincial bonds, strip bonds. If you invest on an ongoing basis of say $10,000 in RRSP's, TFSA's a year, it would cost you about $160,000 or more over 30 to 35 years.
Liquidity and having access to your money is great to have but too much liquidity and easy access to all your money will never let you reach your retirement needs, income, investment needs over the long term. The key also is to max out your RRSP's, TFSA's always.
December 23, 2011
August 1, 2013
Kanaka, I know what you are saying but it's time to look at their competitors for higher rates and more options. Home Trust Company 1 year GIC, TFSA, RRIF is 2.10%, 18 month 2.30%, Carpathia C.U. 1 year GIC is 2.00%, TFSA's, RRSP's, RRIF's 1 year is 2.15%, 18 month all of these types 2.50%, Achieva Financial 1 year GIC, RRSP, RRIF, TFSA 2.00%.
Community Trust 1 year GIC, RRSP, RRIF, TFSA 2.00%, Outlook Financial 1 year RRSP, RRIF, TFSA, GIC is 2.00%, Comtech C.U. 1 year GIC, TFSA, RRSP, RRIF is 2.15%, Concentra Financial C.U. 1 year GIC, TFSA, RRSP, RRIF is 2.00%,First Ontario C.U. 1 year GIC, TFSA, RRSP, RRIF is 2.00%, Meridian C.U. has a 18 month GIC at 2.20%.
I'm sure there are more but when they don't have a competitive product or service, it's time to go where they want or need your money.
May 28, 2013
SD2013, thanks for your reply; you have clearly done a lot of research. But I do not see how putting money into "...a cashable GIC like Home Trust at 1.75% fixed 1 year cashable after 90 days with no penalty" is better than leaving it in Hubert's savings account at 1.85%. And yes, I do realize that these institutions can change their rates at any time. Currently, I am reluctant to lock my money into any long term GICs at these low rates. Oh, for the days of 6% interest on your savings account!