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Hubert Rates up, 19 Jan 2018
January 20, 2018
5:18 am
Bill
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[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?

Doug, Kayla told you the rates don't reset, then you say that you're aware you're locked into the current 3 month rate. She didn't say that, she said the rates don't reset.

Then you go on to try to lead her the way you want by saying/asking that if the rates increase you start getting the new rate next quarter. So she says (essentially) ok, whatever, bye now.

I'm guessing everybody's GICs don't get reset every time there's a rate increase, or decrease for that matter, but I've not bought the product before, I don't know for sure. Maybe, incredulous and inconvenient as it may seem to you, Hubert expects you to actually redeem the old GIC and get a new 1-year term (the new rates are for those who want to sign up for another full year, not the remaining term of a previous year) if you want to get different rates.

January 20, 2018
7:33 am
2of3aintbad
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If Hubert's rates go DOWN, instead of up, in the quarters corresponding to his/her start date, no investor would be happy. You buy a GIC because you are satisfied with the terms. So if you are already in the middle of your quarter, you might as well wait until your next quarter. Interest rates may go up again and you'll do better. Of course, if you need that money at a specific date, that may change your reasoning.

January 20, 2018
10:43 am
Doug
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With the utmost respect, Loonie and Bill, I don't get how I couldn't be any more clearer. Bill, I was waiting for someone to pull out that snippet and try and use that as "evidence" to the contrary and that's precisely why I included it. It shows that she was confused by initial question. Read her follow-up response to my re-worded, and also clarified, question:

[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? ... 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

If you even look at your "current interest rate" on your 1-year quarterly term GIC, it shows only the rate you're currently receiving for the current quarter or "tier" that you are in. None of the other rates are "set in stone" and they reference the "average annual rate" based on the average of the current four (4) calendar quarters, that is not your guaranteed rate for the term. If, in a subsequent quarter, Hubert raises their rates for that particular quarter (and they generally raise all of the quarters' rates in tandem when they do adjust the term's rates), you will receive that updated quarter's rate.

Redeeming is an option, yes, but then you would reset back to "quarter #1" and never get to quarter #2, #3 or #4. "Locked in" may be poor terminology with a cashable GIC, which this effectively is, I'll grant you that, but I used it to describe the sense that your future rates are not necessarily set in nor stone nor are you necessarily committed to what they put as the "average annual rate" (based on its current quarterly rates), which they use for convenience purposes. 🙂

I thought Kayla was pretty clear but I will try and contact them and get an internal screen print that proves this point further. sf-cool

Cheers,
Doug

January 20, 2018
11:06 am
Loonie
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I think I see now where you got confused.
Kayla's response was to the second of your two posts, which occurred one after the other, apparently with nothing in between from her to respond to the first one. She either didn't notice or forgot about the first one when responding to the second one. In your re-statement, #24, you have conflated your two posts so that they appear to have been one. T

It goes like this:
[Doug]
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

There is nothing in their website that even hints that you would automatically be plugged into any new rate. There is nothing that comes by email or any other means to tell you that you will be switched to a new improved rate. I can tell you this from personal experience. Surely, if it were otherwise, they'd be eager to proclaim it, especially when it is to our advantage.

The statements always only show the rate for the current quarter. As I have said before, I am not thrilled with Hubert's layout. But this does not imply that the rate for subsequent quarters is subject to change.

You are correct that if you redeem, you will start again at the first quarter. Currently, this is still advantageous if you are just completing your first quarter of the old rate or are fairly early in that first quarter, at least by my math.

I think they're open Saturdays now, so you should be able to get this clarified today fairly easily. Failing all else, I'll be sure to let you know if my earlier GIC suddenly gets a boost going into the second quarter.

in fact, now that I think about it further, I am fairly sure I did have this exact situation a year or so ago. I bought a one year GIC with average rate of 1.95. At some point during that year, the new rate went to 2.05. I worked out that it was not to my advantage to cash in and start over in that particular case. My quarterly rate did not, however, change from what I had initially booked.

January 20, 2018
1:10 pm
Bill
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This could go on for a while, parsing every phrase, Doug, but I think you had it right way back when you said: "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".

Key is "if I redeem" - yes, if you redeem (i.e. cash-in, terminate) your GIC mid-quarter (or anytime for that matter) and then buy a new 1-year GIC you will obviously start with the new rates on the new GIC. However if you don't redeem, you won't get the new higher rates, you'll continue to get the rates you originally signed up for. Bottom line - as long as you currently have a cashable 1-year GIC with them its terms will be unaffected by rate increases or decreases after you purchase it.

January 20, 2018
3:51 pm
SavingIsGood
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Doug said If, in a subsequent quarter, Hubert raises their rates for that particular quarter (and they generally raise all of the quarters' rates in tandem when they do adjust the term's rates), you will receive that updated quarter's rate.

This is absolutely NOT correct. This 'Doug' spreads misinformation left and right.

When you buy 1y GIC at Hubert, your rates are 'cast in stones' until end of term - which is ONE YEAR. If you start with 2.0, 2.1, 2.2 and 2.3 that is your rate even if Hubert increases its rates to 15.1, 16.2, 17.3, 25.0.
You you want 'new, better rate' you have to talk to Hubert to do payout of your 'redeemable' GIC and they you can start another 1 year term with new rates. That is why it is called GIC. Understand: GIC - GUARANTEED Investment Certificate.
3 months are YOUR personal 'quarter': if you buy GIC on 2018.01.22, YOUR next 'quarter' is 2018.04.22 then, 2018.07.22, etc. Nothing to do with calendar 'quarters'. Better term is 'three months period'.

Just stop beating the dead horse; with Hubert it is VERY clear how they operate and how THEIR 1y redeemable GIC works; there are 25 messages which bring no benefit to conversation, just some bickering between smart-Alec and the rest.

January 20, 2018
10:48 pm
User230
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GICS are a risk. Under rising rate conditions GICs aren't such a good choice. Under lowering rate conditions GICs are a better idea.

All GICs I know of are fixed to the initial market the deposit occurred in and it doesn't need to be stated.

Even if the rates within the GIC are variable, the GIC as a whole is fixed and is completely dependent on the initial market it was purchased in.

The current market has no bearing whatsoever on a GIC purchased in the past.

January 21, 2018
9:33 am
gicjunkie
Ontario
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User230 said
GICS are a risk. Under rising rate conditions GICs aren't such a good choice. Under lowering rate conditions GICs are a better idea.

All GICs I know of are fixed to the initial market the deposit occurred in and it doesn't need to be stated.

Even if the rates within the GIC are variable, the GIC as a whole is fixed and is completely dependent on the initial market it was purchased in.

The current market has no bearing whatsoever on a GIC purchased in the past.  

This is why, if you have enough to invest, laddering is important. The highs and lows tend to even out.

Sometimes we think rates will continue to rise, but then some possibly foreseen, but often unforeseen, event occurs which affects the economy and puts a halt to the trend. If, like right now, rates are trending up, one may wish to try a shorter term GIC or just keep funds in a high interest savings account. Problem is, you will never know when the rates will peak. The economy can be doing really well, then NAFTA could fall apart or a nuclear threat occurs that screws everything up.

Laddering can take advantage of the highest long term rate at that point in time, knowing you will have other investments coming due in the not too distant future to reinvest. Obviously, if we could predict the markets, we'd all be very rich. We can only invest based on what we know about the current market, what our own personal risk tolerances are and what we have available to invest at any point in time. There is no perfect solution to this problem of fluctuating rates.

The laddering philosophy works for me at this point in my life. I am pretty much into risk avoidance. Having said that, I do sometimes go a bit short term with extra money if the rates are trending up, hoping to go to a longer term a bit later. Again, I do this with a "laddering" mindset.

To me, GICs are minimal risk because of the CDIC, DICO and other provincial insurances, as long as you stay within the investment limits.

Hope this helps a bit.

January 21, 2018
5:56 pm
Loonie
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I think gicjunkie is basically right. I know there are some studies somewhere which demonstrate the few occasions when laddering would not have been the best idea,, but we can only see them in hindsight. and the capital is secure.

Even if you decide to temporarily disrupt your ladder during a rising rates period and wait for a better rate, you are not necessarily much or any ahead because you then have to fill in the blanks in your ladder by , for example, buying a four year instead of a five year GIC, at a lower rate than the five year.

January 21, 2018
7:16 pm
tcharger67
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Guys can I just throw 2 cents out there.

Is anyone noticing that moving between different banks in regular savings and TFSA, RRSP accounts through introductory offers... IE simplii at 3%, theyre actually getting a substantially better return than the any GICs right now

January 21, 2018
7:55 pm
Joe
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tcharger67 said
Guys can I just throw 2 cents out there.

Is anyone noticing that moving between different banks in regular savings and TFSA, RRSP accounts through introductory offers... IE simplii at 3%, theyre actually getting a substantially better return than the any GICs right now  

It's been like this for over 3 yrs.....but it takes 30 seconds, every 3 months to move the money.....and that's just too much for some members here who refuse to "play the game". Funny though, those members are the same ones with over 1000 posts who probably spend over 1 hour a day or more on this forum....LOLsf-cool

Tangerine....Canada's best bank. LBC.............Canada's 2nd best bank.
Hubert.....worst bank in Canada.

January 21, 2018
8:00 pm
gicjunkie
Ontario
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There are now numerous GICs available at 3% to 3.15% for 5 years right now. Granted, there is a short term benefit of parking your money in a 3% savings account instead of locking in for 5 years when rates are expected to increase, and hopefully they will.

The downside is that these special saving account rates last only a few months, (to attract new business) drop, to much lower levels, and then you have to go through the process of moving the funds around again. This in itself can be quite annoying after a while, especially if you have to keep opening and closing accounts. I have tried to park my spare cash in a few institutions which have a history of giving decent savings account rates, without having to go through the above opening and closing process too much. Then, when enough funds are available to me, I generally go long term in a GIC while keeping to my laddering philosophy.

January 22, 2018
7:31 am
Top It Up
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Joe said

but it takes 30 seconds, every 3 months to move the money.....and that's just too much for some members here who refuse to "play the game".  

But it's NOT just 30 seconds if you have to set up a new account and then set up for transferring money around and then keeping track of yet another account that might only net you a paltry $15 - $20 interest on $10,000 over the promotion period.

------------

You just have to read through this thread to see ALL the FUN customers were having setting up at Simplii

https://www.highinterestsavings.ca/forum/simplii-financial/simplii-financial-3-0-interest-on-new-deposits-until-february-28-2018/

January 22, 2018
7:52 am
tcharger67
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I agree with both above statements in regards to the effort delivered. Gics at 5yr 3%+ seems risky given the latest increases, and the potential for 4+% even by the end of this year alone, given the latest BOC curve and likely hood rates will increase more this year.

I don't think bouncing between promo rates is a good long term solution, but given the BOCs latest history and media announcement, I think holding out to sign anything more than a 1 year GIC is going to hurt financially

That being said, I suppose I should have said for members 350k plus I believe that little bit if work is well worth the time. In reality it's about 10 minutes on hold and 10 minutes to make transfers, 10 minutes for paperwork, and maybe 1$ in letter mailing. I keep a full log of account numbers and information so I have become quite efficient at transfers. Especially when I can check this forum and see new posted rates once a week.

January 22, 2018
11:48 am
gicjunkie
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There is no right or wrong way to do this. A lot depends on how much money you have to invest, your current income level, where you are in your life, your risk tolerance, and how much effort you want to put into this. Just do what you feel comfortable doing.

January 22, 2018
2:17 pm
Rick
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gicjunkie said
There is no right or wrong way to do this. A lot depends on how much money you have to invest, your current income level, where you are in your life, your risk tolerance, and how much effort you want to put into this. Just do what you feel comfortable doing.  

Couldn't agree more.

January 22, 2018
2:24 pm
phrank
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gicjunkie said
There is no right or wrong way to do this. A lot depends on how much money you have to invest, your current income level, where you are in your life, your risk tolerance, and how much effort you want to put into this. Just do what you feel comfortable doing.  

What? You're not going to tell me what to do? lol. Words of wisdom.

January 23, 2018
4:30 pm
christinad
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Can someone remind me if Hubert has transfer fees?

January 23, 2018
5:09 pm
Loonie
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no transfer fees

Edit: assumed you meant RSP/RIF/TFSA.

January 23, 2018
5:22 pm
Nehpets
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christinad said
Can someone remind me if Hubert has transfer fees?  

From Hubert FAQ's:

Are there any fees?
Hubert has zero transaction fees. Whether you’re making a deposit, transferring funds, setting up a registered account, or making a withdrawal, you won’t be charged a fee!

However, Hubert does charge fees for two things:

Wire transfers (incoming fee is $8.72 CDN for Canadian wires or $11.31 USD for US wire transfers).
$25 fee for accounts that are inactive for six months with a balance under $1,000.
Since inactive accounts are not being monitored by the account owner they pose a higher risk for fraudulent activity and have to be dealt with in a timely manner. If you don’t process a transaction semi-annually we’ll mail you a letter notifying you your account has become inactive and will request you to log into your account and process a transaction. Once this is complete we’ll remove your inactive status.

Hubert does not charge exit transfer fees for TFSA's

Stephen

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