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Hubert Rates up, 19 Jan 2018
January 19, 2018
7:27 am
Loonie
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High-interest savings: 2.00%

1-year term: 2.45% average
2-year term: 2.60%
3-year term: 2.75%
4-year term: 2.90%
5-year term: 3.15%

One-year rate breakdown:
The first three months: 2.30%.
Months four to six: 2.40%.
Months seven to nine: 2.50%.
The last three months: 2.60%.

January 19, 2018
7:50 am
Nehpets
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Good news and good timing as I was in the process of transferring funds to Hubert this weekend!

January 19, 2018
9:31 am
Doug
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Agreed, this seals the deal for me. No to Tangerine and their measly (not to mention miserly!) 2.5% quarterly promo that will ultimately and likely end up averaging out to between 2.3-2.6% anyway!

Remember, friends: as I and others have pointed out last year, Tangerine adjusts their "rate differential" on existing promos to keep your promotion the same so, in this way, Hubert's quarterly 1-year term that Loonie (and now me) loves quite a lot has inflation-protection built in as the rate can be adjusted upward every 3 months. sf-cool

Sunova Credit Union, Hubert's parent organization, has a 15-month 2.5% GIC but this 1-year 2.45% quarterly term is actually better, with the built-in inflation protection. 😉

Cheers,
Doug

January 19, 2018
9:47 am
Loonie
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I'll keep some at Tang anyway because I think this rate at Hubert is here to stay - at least until May 31. Still, it's more reliable than Tang's time-limited offer.

January 19, 2018
9:54 am
Doug
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Loonie said
I'll keep some at Tang anyway because I think this rate at Hubert is here to stay - at least until May 31. Still, it's more reliable than Tang's time-limited offer.  

Pet peeve: When I see people using "Tang" as a shorthand for Tangerine or Tangerine Bank like they used to abbreviate ING DIRECT Canada as "ING". It doesn't "flow" nicely. I think "TB" might be a better abbreviation for Tangerine Bank, although, I recognize that has its own issues as well, but likely on if used in the context of a discussion with medical diseases. 😉

Yeah, the Tangerine promo is fine, but if the BoC does (foolishly) go ahead and raise rates in March or April, it'll actually be less than Hubert's 1-year quarterly term. I'm digging Hubert's flexibility in this GIC. Anything I can do to put most of my money in credit unions as opposed to Tangerine without sacrificing much in the way of return, I'm happy. 😉

Cheers,
Doug

January 19, 2018
10:32 am
Nehpets
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According to my call into Hubert today, inquiring if the GIC's I booked January 8 could be revised to today's rate, I was told Hubert's grace period for rate increases is one week...so my deadline would have been January 15.

Nevertheless, I cashed in the GIC's booked on January 8, forfeiting all interest (minor amount) to rebook them at today's more favorable rate.

Again, Hubert was easy to deal with, with the transactions taking a little under an hour to complete.

Stephen

January 19, 2018
10:36 am
Loonie
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Good move, Stephen.
I worked out that the ones I bought before Xmas should stay until March, then cash and reinvest. But for January 8, it makes sense to cash now and reinvest.

January 19, 2018
10:39 am
Doug
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Loonie said
Good move, Stephen.
I worked out that the ones I bought before Xmas should stay until March, then cash and reinvest. But for January 8, it makes sense to cash now and reinvest.  

Agreed, good move, Stephen. That's great Hubert Financial lets you redeem a GIC prior to its minimum holding period with just forfeited interest. 🙂

Loonie, my understanding is with the 1-year quarterly term, you wouldn't need to re-book it in March as you would move, automatically, into the interest rate for months 4-6, correct? Hence the "inflation protection" because those aren't "locked in" rates as they adjust with each quarterly...at least that's my understanding. It'd be silly if it's not. 🙁

Cheers,
Doug

January 19, 2018
11:06 am
Nehpets
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Loonie said
Good move, Stephen.  

Full disclosure: It was thanks to my wife's input that we made that move !!

sf-wink

January 19, 2018
12:46 pm
Loonie
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The second quarter rate on the previous 2.25 annual one year rate is 2.2.
The first quarter rate on the new 2.45 annual one year rate is 2.3

Whether or not you should redeem and start again depends in part on the difference between those two rates.

I must admit that I wasn't quite sure what you meant by inflation protection, Doug. I don't think it's exactly that, but it does allow you to re-set if rates go up.

January 19, 2018
1:35 pm
DavidAlta13
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Factual corrections to some misunderstandings about Hubert's one-year quarterly* terms:

*"quarterly" means every 3 calendar months from the date of purchase, with the same day of the month. If you bought on Dec 22, 2017, your term's quarterly interest payments would be calculated as of Mar 22, 2018, Jun 22, 2018, Sep 22, 2018 & Dec 22, 2018. It does NOT mean the calendar quarter ends of Mar 31, Jun 30, Sep 30 & Dec 31.

Once purchased, Hubert's one-year quarterly term rates are set (locked in) for the year:
The rates are NOT automatically adjusted if new one-year quarterly term rates are changed, up or down.
For example, for a Hubert one-year quarterly term purchased before this week's changes, here are the rates before and after this week's changes:
Q1: 2.10% / 2.10%
Q2: 2.20% / 2.20%
Q3: 2.30% / 2.30%
Q4: 2.40% / 2.40%
Straight Average: 2.25% / 2.25%.
There is NO automatic rate adjustment or "inflation" protection.

Hubert does, however, allow their quarterly one-year terms to be cashed in before maturity.
When you cash in early, you simply forfeit all interest since your last quarterly interest payment.

With today's rate increase, it may be worth cashing in early and buying a new quarterly one-year term at the new rates. Whether to that immediately or on the day of the next quarterly payment is a manual calculation to see if any forfeited interest is recouped with the higher rates.

With the new annual average rate of 2.45%, those who were offered Tangerine's special of 2.50% (the highest in Canada, beating the next best EQ Bank's offer of 2.3%) are still better off.

If one were to rank rates from highest to lowest and then describe them as going from the most generous to the most miserly, then objectively, Canada's highest rate would be either generous or the most generous.

I am grateful to Tang, EQ & Hubert.

January 19, 2018
3:24 pm
Bill
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Don't forget Simplii's 3% for the 5-month period ending Feb 28.

It's cool to complain about our institutions these days, gratitude is a rarely expressed sentiment - nice to see.

January 19, 2018
5:24 pm
semi-retired
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Hello all I just opened a 1 year TFSA quarterly term GIC at the beginning of the year.I wonder if terminating it to upgrade to the new higher rate would void my 2018 contribution limit.Your not really making a physical withdrawal of funds,but the GIC registration #that would be sent in to CRA for the original GIC would probably change.Any thoughts.I will call tomorrow & ask them.

January 19, 2018
5:53 pm
Loonie
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semi-retired said
Hello all I just opened a 1 year TFSA quarterly term GIC at the beginning of the year.I wonder if terminating it to upgrade to the new higher rate would void my 2018 contribution limit.Your not really making a physical withdrawal of funds,but the GIC registration #that would be sent in to CRA for the original GIC would probably change.Any thoughts.I will call tomorrow & ask them.  

It won't be a problem. Just get them to walk you through it on the phone. it's a kind of transfer, not cashing in.

January 19, 2018
6:08 pm
Bill
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The wording on their site is that you can "redeem" the one-year GIC, so that doesn't sound like a direct transfer to me, it's cashing it in. But you have to do it by phone anyway, so I'm sure they've done this before.
To be sure, you could first open a Hubert TFSA savings account, then redeem the GIC and have the proceeds put into that savings account, then use the savings account funds to buy the new GIC, all the while keeping it in a TFSA.

January 19, 2018
7:27 pm
Doug
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Hi David:

I wanted to be crystal clear with Hubert Financial before I booked their 1-year GIC that has its interest paid quarterly. You are correct in that it is not "calendar quarters" but quarters that start from the day you book the GIC. However, the interest rates do indeed reset quarterly. This is demonstrated by my current interest on my 1-year GIC showing 2.3%. If Hubert changes the rate, I don't get the higher interest for the current quarter I'm in and if I redeem funds mid-quarter (i.e., before my next "interest payment date"), I do forfeit that current quarter's interest payment. However, as both Kayla and Brittany from Hubert Financial explained to me, I would get the subsequent quarter's updated interest rate. sf-cool

[Doug]
So regarding the 1-year quarterly GIC, just to confirm, the rates are adjusted quarterly including for current 1-year quarterly GIC holders (i.e., no need to re-book)?
12:28:25 PM

[Kayla]
if the rate changes during your one year term the rate would still be the same rate the original term was set to. you wouldn't receive the new rate.
12:31:04 PM

[Doug]
But that's not what you said though!
12:31:25 PM
you mean I'd have to go through the needless and unnecessary process of, potentially, redeeming it more than once per year after the current quarter to get the updated rate next quarter?
12:32:17 PM

[Kayla]
no sorry the rate that is posted on our web site changes every 3 months as posted
12:33:38 PM

[Doug]
I thought, and hoped, that the GIC's account information screen would show 4 specific interest rates, one for each quarter, that allowed for it to be updated if rates increased in subsequent quarters. Get what I mean? That would seem to make more sense.
12:33:46 PM

[Kayla]
i just mean like today when rates increase you wouldn't receive the better rate. dose that make sense?
12:34:19 PM

[Doug]
yeah I know I am locked in to the current 3 month interest rate...I'm fine with that, totally. So if its rates increased I'd still receive the updated rate next quarter?
12:34:50 PM
I also know that if I redeem it mid-quarter, I forfeit that quarter's interest, which is also totally fine.
12:35:14 PM

[Kayla]
yes that is correct! sorry for the confusion.
12:35:42 PM

[Doug]
No problem. No worries. Thanks for clarifying!

You can see from my questions that I make sure I get it nailed down to the point that there is absolutely no ambiguity. Thanks anal retentive self! sf-cool

It is confusing, though. I do agree there! 🙂

Cheers,
Doug

January 19, 2018
7:36 pm
Loonie
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I have had these for several years and have never found it confusing. I think it's just a matter of what expectations you came with. They never said they would change your terms, and some people would not necessarily want their terms changed for various reasons. Perhaps I/we didn't explain it well earlier.

Look at it this way. It's a one-year GIC. You accept the terms when you take it out in the first place. Those terms (rates) don't change but they do include the possibility of redemption.
If you choose to redeem, you can immediately re-invest, with new terms.
And you can do this again if circumstances warrant.

January 19, 2018
7:51 pm
Doug
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Loonie said
I have had these for several years and have never found it confusing. I think it's just a matter of what expectations you came with. They never said they would change your terms, and some people would not necessarily want their terms changed for various reasons. Perhaps I/we didn't explain it well earlier.

Look at it this way. It's a one-year GIC. You accept the terms when you take it out in the first place. Those terms (rates) don't change but they do include the possibility of redemption.
If you choose to redeem, you can immediately re-invest, with new terms.
And you can do this again if circumstances warrant.  

Loonie, what are you trying to say? Forgive me but I don't get it. I'm not sure what you said but David said above that the quarterly interest rates don't update. That part of what he said is simply factually inaccurate. See the Hubert conversation which I happily shared. sf-cool

I am currently getting 2.3% - next quarter I'm scheduled to get 2.4%. If they raise the rates on the 1-year term before my next "interest payment date" (being April 19th, 2018), my second quarter rate will update. If they do it April 20th, 2018, it won't but I'll be eligible for the higher rate in my third quarter. Does that make sense? I could redeem and re-book but then I'd start over in the first quarter again. 🙂

Cheers,
Doug

January 19, 2018
7:53 pm
Doug
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Loonie said
I have had these for several years and have never found it confusing. I think it's just a matter of what expectations you came with. They never said they would change your terms, and some people would not necessarily want their terms changed for various reasons. Perhaps I/we didn't explain it well earlier.

Look at it this way. It's a one-year GIC. You accept the terms when you take it out in the first place. Those terms (rates) don't change but they do include the possibility of redemption.
If you choose to redeem, you can immediately re-invest, with new terms.
And you can do this again if circumstances warrant.  

If you are saying that the rates are locked in for the full year, that's not correct, as per Hubert. 🙂

Rates are only locked in for each quarter, basically. 🙂

Cheers,
Doug

January 19, 2018
8:21 pm
Loonie
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The concept of "locked in" is not really useful here. "Re-set" may also be confusing the issue.

The TERMS of the GIC remain in effect as long as you leave the GIC in effect. All four quarters remain as they were when you took out the GIC until such time as it matures or you cash it in, which ever comes first.
If you re-invest, you start over again, as if you'd never had the previous GIC, with the rate of the first quarter of the new contract.

I don't know why this is so hard to understand, but I don't think I am able to explain it any more clearly.

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