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Ideal Savings account setup
November 21, 2016
3:10 pm
AdrenalineTrade
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With a guaranteed 2.5% for the next year, I am going to be moving some funds there. I tried to use the online account setup, but it did not work properly. I have mailed in my hard copy application and cheque, and will let everyone know how long it takes to get everything set up. With a potential influx of tens if not hundreds of millions, I am curious as to what delays will arise.

Further, does anyone else have hesitations regarding the fact that Manitoba guarantees ALL funds? As opposed to CDIC.

November 21, 2016
3:53 pm
Loonie
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There have been other threads discussing Manitoba's CU insurance which you might want to review. As I recall, NorthernRaven had done significant investigating on this and felt it was as good as or possibly even better than CDIC insurance.

My own perspective is that the ceiling per individual shouldn't matter. It's about insuring dollars versus their back-up. Ownership of those dollars is not relevant. Some feel, however, that if such a crisis occurred, that those with higher balances would not be treated with same priority or perhaps would be downgraded if there was not enough insuranc money to cover. Bear in mind that no deposit insurance system anywhere has enough funds to reimburse everyone if there were massive failures.

Questions about how they might handle a large influx are valid. Do I trust the management? I have no idea. See my caveats earlier on that.
We know that with EQ (which advertised very heavily and then got a huge response), the system basically broke, they had to close their virtual doors for several weeks, and the rate fell precipitously.

Diversity is always important. I wouldn't put all my eggs in one basket, regardless of the insurance system. If anything goes wrong, you are going to have to wait several months to get your money back, so you want to have other places (and other insurance systems) to draw on.

November 21, 2016
5:49 pm
NorthernRaven
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Loonie said

There have been other threads discussing Manitoba's CU insurance which you might want to review. As I recall, NorthernRaven had done significant investigating on this and felt it was as good as or possibly even better than CDIC insurance.

Nothing beats CDIC, since it has the Government of Canada's printing presses explicitly behind it... :) The conclusion I did come to is that given CMHC on the hook for a chunk of residential mortgages, the generally conservative nature of CU operations, the size of Manitoba's guarantee fund and the importance of their CU sector, and so on, it would likely take a hugely improbably meltdown of the Manitoba economy to wipe out the CUs badly enough to cause deposit losses. But I don't make calls for other people.

At least for now, you can get Manitoba rates but CDIC coverage from EQ (for HISAs), and market-leading GIC rates from Oaken or Peoples with CDIC coverage, so those wanting the federal guarantee have that choice.

The bit about ALL funds being guaranteed is more to do with the fact that the national banks have huge corporate deposits, and there's a massive chunk of deposits that are over the $100K limit. Insuring these would cost the banks a hunk in premiums, and since a Big 5 bank failing is so highly improbable, there's not much point in paying to cover them.

November 26, 2016
7:16 am
Koogie
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So is there any particular reason that Ideal hasn't been added to the comparison chart ?

November 27, 2016
10:46 am
Peter
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Koogie said

So is there any particular reason that Ideal hasn't been added to the comparison chart ?

I typically just wait a couple of months for people to post more experiences with a new financial institution and also to let the initial hype die down.

December 3, 2016
3:32 am
Doug
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While I agree their website looks a bit like a Wordpress blog, which is what made me think it was an independent deposit broker of some sort and would've had me questioning why they even got their own sub-forum and would've vehemently opposed adding them to the "comparison chart," I see it's very much OK. As for adding them to the "comparison chart," with the increasing prevalence of the Manitoba-based credit unions all offering the same interest rate (there are now eight that operate virtual branches and brands of each of the credit unions, six of whom are currently listed), I would actually like to propose an additional criteria for inclusion in the "comparison chart" and this could be as a separate criteria that applies just to Manitoba-based credit unions or to all financial institutions (the latter being my preference) above the last criteria about the regular posted interest rate being "competitive":

free of transactional fees or charges for all cheque or EFT debit transactions in a given monthly statement period

As an alternative to this, it could be:

required to provide a minimum of five (5) free cheque or EFT debit transactions in a given monthly statement period

This would not be unduly onerous of a requirement as there'd still be no requirement to provide either a debit card or offer free ATM or point of sale debit transactions, as it is a savings account afterall. Either option would, however, remove from consideration those financial institutions that, in my view, "trick" people in to signing up for their service when in reality they only over one (1) EFT or cheque debit transaction per month (too few, in my opinion) while offering the exact same service (or worse) interest rate as a fellow Manitoba-based credit union (i.e., Achieva Financial versus Implicity Financial or Hubert Financial, the latter two don't charge any debit transaction fees). It would also allow us to streamline our Manitoba-based credit unions in the chart from the current six (6) to two (2) or three (3). As always, we would still be able to optionally maintain the respective sub-forums for each financial institution, whether included in the "chart" or not, as well as in the "bank profiles" if we wish. :)

I'd also like to re-raise an earlier proposal I'd had to further define what a "competitive" regular posted interest rate is, something which I believe Peter earlier deferred on but might be able to be re-considered at a future date. Moved as proposed:

the regular interest rate on the high interest savings account must be competitive, which is defined as being a minimum of 50 bps (or 0.5%) above its benchmark*

In the page's "footer", benchmark would be further defined as:

*Benchmark is based on being a high interest savings account offered by "Big 5" Canadian bank that pays the highest regular, posted interest rate (i.e., no "promotional" or "anniversary" interest) with no strings attached (other than a minimum balance of $5000, as seems to be common across all of the "Big 5" Canadian banks) The benchmark is reviewed at least annually.

Currently, the Scotiabank Momentum Savings Account is 0.90% for balances above $5000 with no other strings attached.

This move would have no effect on any of the existing listed accounts but would be in place for future rate decreases. Canadian Tire Bank may be slightly impacted for possible removal (at 1.3%) but we could allow it to remain for now by "grandfathering" it in to the "chart," until such time as they either: (a) lower the interest rate; (b) cease business operations; or, (c) Peter chooses to review those included in the "chart" at some point in the future. :)

Cheers,
Doug

December 3, 2016
7:20 am
NorthernRaven
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Again, I'd argue for the greatest possible inclusivity in the basic data, then provide filtering or highlighting for whatever opinionated criteria Peter wants the site to embody.

So include Tangerine and PCF on the chart, and the CU clones, etc. Then have a "Hide accounts that suck" button, defined to taste. Or make that the default, and make the button "Show accounts that suck". But have some way to see everything, and not have to go chase around to a bunch of other websites.

I'd note that the Scotia Momentum account rate is now 0.75% (not 0.9%; the Accelerator is 0.8%), so Canadian Tire would now meet the "Doug 50 basis point" test. Also, CT has a 1.6% TFSA rate, which would be lost if they were booted off. And, the Scotia accounts charge $5/debit, unless you have another Scotia account to transfer to, which is a non-trivial "other string".

A $1 debit charge with a monthly freebie isn't unreasonable for many savings purposes, and again I'd argue not to throw the baby out with the bathwater. If decluttering, or saving people from the sin of slightly suboptimal savings account choices, is a goal, do filtering or grouping of me-too offerings. When I come across a site of some sort of collected information, and I see obvious missing items without explanation, I assume the site is either lacking in comprehensiveness or has undisclosed financial or other conflicts.

December 3, 2016
2:21 pm
Doug
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With all due respect, NorthernRaven, I have to respectively disagree with you. The High Interest Savings "comparison chart"'s mandate was never to be an exhaustive list of Canadian bank or credit union savings accounts. We have to set certain criteria - and a benchmark to measure what's "competitive" - for inclusion. It was created as an alternative to regular bank and major credit union savings account options. As rates declined precipitously for a variety of factors, including central bank interest rates being just one, some moved to lower their rates further and increase their "spread". Others, like HSBC Direct, a one-time pioneer along with also shuttered Citizens Bank of Canada, eventually closed their operations and - in HSBC's case - stopped taking online account openings altogether at a time when the major banks and credit unions were expanding that! Tangerine and PC Financial also, likewise, lowered their "posted" regular interest rates to match that of the "Big 5" banks' best accounts (0.80% currently for Tangerine's Savings Account option, I believe). As such, Peter, myself and several others agreed that quality plays a major role in the decluttering. :)

I'm all for including a link to Cannex's Deposit Accounts interest rate page, which is updated regularly, in the page's "footer" of the "comparison chart" for an expanded list (for those that want it). However, when you have eight Manitoba-based credit unions offering the same product with the exact same rates, I'd strongly argue a second "filter" for inclusion needs to be applied and that filter out to be value for money, of which four to six of them charge excessive fees per debit transaction item which immediately erodes the value of the interest rate they're offering. It's also highly misleading. One item per month isn't enough, even for savings accounts as one might need to tap the savings account for regular income on a semi-monthly or bi-weekly basis or they might want to transfer funds over to a competitor and face outbound "push" transaction limits and, thus, need to do more than one transaction per month.

I'm not saying it has to be unlimited or even five free EFT or cheque debits, it could be three free EFT or cheque debits, which is what Ideal Savings offers currently and would be "on par" with HSBC's High Rate Savings Account. We could even allow Achieva Financial and Outlook Financial to remain on the basis that Achieva provides a $1.00 per month credit to the account for e-Statement enrollment (which would effectively allow two free debit transactions, essentially) and Outlook Financial offers the superior MemberDirect online banking platform (like Implicity Financial) and is offered by Assinibone Credit Union, the province's second-largest by AUM.

As for Canadian Tire Bank, aside from my prediction this bank will be sold to and/or amalgamated with Scotiabank in the next 5-7 years (at most), I've proposed allowing it to remain on a grandfathered basis unless they should further lower their regular, "posted" rate or otherwise make it uncompetitive.

As for the "benchmark," oops, I guess I meant Scotia Savings Accelerator Account then. Thanks!

One other point - the "wishes" of a few of this forum's most frequent posters should not necessarily outweigh the "silent majority" when there are perfectly valid and, I'd argue, far more objective (rather than subjective) policies being proposed. It's much the same way why I try and maintain the "free chequing" chart by not allowing "minimum monthly balance requirement" to be a criteria for inclusion otherwise we'd be inundated with requests from literally hundreds of credit unions. ;)

Cheers,
Doug

December 3, 2016
10:16 pm
Loonie
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Moderator:
I think this recent turn of events in this thread should be moved to Site Suggestions.

December 3, 2016
10:27 pm
Peter
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Loonie said

Moderator:
I think this recent turn of events in this thread should be moved to Site Suggestions.

Thanks. In this case I've decided to just lock the thread, because splitting it would lose some key discussion about why Ideal Savings has not be added to the chart yet.

Please continue any further Ideal Savings discussions in other or new threads in this forum and any further discussion about general inclusion criteria in the "Site suggestions" forum.

Please write your comments in the forum.