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Ideal Savings lowers savings rate to 2.00%
April 13, 2018
5:30 am
Top It Up
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Ideal savings - variable

Ideal deposit * - 2.00%

* Accounts opened, or those with applications postmarked by 13 April 2018, will continue to receive the promotional rate until 31 December 2018.

https://idealsavings.ca/rates/

April 13, 2018
8:12 am
gamgam
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When opening an acct do you need to send in a void cheque as well as an initial deposit?

April 13, 2018
8:16 am
Top It Up
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If you're sending your initial deposit with a cheque, through the mail, that's all they need.

April 13, 2018
8:23 am
gamgam
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Thank you Top It Up!

April 13, 2018
8:29 am
Top It Up
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You need to speak with Ideal directly BUT I think filling out the online form qualifies you as having "postmarked" your account application as of the day you complete it ... i.e. today, April 13th.

April 13, 2018
8:51 am
gamgam
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How do you speak with Ideal directly? 1-844-616-1443 is just an automated message.

April 13, 2018
9:00 am
Top It Up
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Therein lies the shortfall in Ideal's customer service.

That recorded message should have offered you the chance to leave a message with the "promise" they'll get back to you. Last time I left a message, they returned the call in 3 hours.

April 13, 2018
9:10 am
gamgam
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Oh boy! Not bad considering they say within two business days! Thanks

April 13, 2018
7:46 pm
Joe
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Top It Up said
Ideal savings - variable

Ideal deposit * - 2.00%

* Accounts opened, or those with applications postmarked by 13 April 2018, will continue to receive the promotional rate until 31 December 2018.

https://idealsavings.ca/rates/  

Your not chasing yield Top it Up.....are you? I thought you said you didn'tsf-laugh have time for that...but but but....LOL

April 14, 2018
7:40 am
Top It Up
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The money's been PARKED at Ideal since 2016 - hardly qualifies as rate chasing.

April 14, 2018
11:41 am
Londonguy
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Well, this decrease is disappointing, and it makes me wonder how the mortgage lending business is doing this spring on Manitoba -- not what they expected I guess, otherwise why take their fishing pole out of the water

April 14, 2018
12:06 pm
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I haven't spent anytime pondering this announcement BUT the MB government announced changes to Manitoba credit union provincial taxation, in their last budget -

Credit unions losing tax deduction
Finance minister says 'they are competing full-on ... with the chartered banks’

Winnipeg Free Press - March 14, 2018

Credit unions of Manitoba got blindsided in this week’s provincial budget with the announced phase-out of a special deduction that, by 2023, will mean an additional $15 million its 30 members will have to pay in provincial corporate income tax.

While Credit Union Central of Manitoba (CUCM) CEO Garth Manness said it was a surprise, Finance Minister Cameron Friesen said they should have seen it coming.

The special tax deduction which currently allows credit unions and caisses populaires to pay a lower rate of tax on a portion of their income is being phased out over five years beginning on Jan. 1, 2019. It was a program originally introduced at the federal level about 45 years ago, according to Friesen.

It was intended at the time to give credit unions, then in their infancy, a leg-up to allow them to survive in the very competitive financial services industry.

"Fast forward to 2018 and credit unions are now modern, mature financial institutions," Friesen said.

"They are competing full-on in personal banking, corporate banking, ag lending... with the chartered banks. We are saying at this point, we don’t believe they need an additional deduction available only to them."

In addition to phasing out the special deduction, the province also eliminated a one per cent profit tax. But the two measures hardly cancel each other out. Credit unions will go from paying one per cent tax on net earnings over $400,000 to paying 12 per cent by 2023.

But Manness disagrees that the assistance is no longer necessary.

"Our primary competition, the banks, have access to capital markets and have many more vehicles in order to build their capital base," Manness said. "But the co-op financial institutions are structured differently than corporate financial institutions. The way for credit unions to build equity is primarily through building retained earnings.”

Since the 2008 banking crisis, financial institutions around the world are now compelled to secure greater amounts of equity capital as security against their loan portfolio. In the case of credit unions in Manitoba, that has gone up from eight per cent to 11.5 per cent.

"We are not really challenging those targets," Manness said. "We are simply stating that we have really only one clear mechanism to get the best form of capital and that is through retained earnings, and taxing away our income just makes it that much more difficult for us to meet those targets."

There are 30 credit unions in Manitoba with more than 600,000 members in total with combined assets of just more than $30 billion. Friesen estimates that the five largest — theoretically the most capable of handling the additional cost — will likely bear the brunt of about 70 per cent of the increase.

Manness believes the fact that credit unions have become such an integral part of the fabric of so many communities and are making available important debt financing to many businesses in the province, that his members should not be hit with such a significant tax increase.

"We are very disappointed," he said. "It is going to make it more difficult for us to run our business. We are a Manitoba success story. Why we should be rewarded with increased tax as a result of being successful and helping to build the Manitoba economy is a question we would raise.”

Friesen said the government is a big supporter of credit unions and has a lot of confidence in their ability to continue to grow.

He said the rationale to phase out the deduction was part of the Pallister government’s broader strategy of re-evaluating about $600 million worth of tax credits across a range of sectors.

"They are extensive, poorly co-ordinated and more than that, what we noticed was there was no format under the former government for tax credits to be reviewed for efficiency or effectiveness," Friesen said. "They were enacted and then stuck there. There was no way to measure their value either to the sector or group or to the tax-payer. That season is over."

As well, the province took a cue from the federal government and three provincial governments who have already eliminated the deduction or are in the process of it. The Saskatchewan government announced a phase-out of the credit union deduction in its 2017 budget. [emphasis mine]

Manness said CUCM will try to convince the department of finance to rethink the deduction phase-out, but Friesen does not intend to budge.

"We have made up our mind," he said. "We will go down that path."

April 16, 2018
1:19 pm
Londonguy
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Now THAT would be a really good reason to pull their rates back in a bit -- thanks for the info, I was not aware of it

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