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Another GIC rate increase at LBC Digital
June 10, 2022
7:09 am
Sammy
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Often under the radar, LBC Digital increased the GIC rate again and now offer one of the best rates out there for now.

ERM MINIMUM INTEREST RATE*
1 year $100.00 3.75%
2 years $100.00 4.25%
3 years $100.00 4.30%
4 years $100.00 4.35%
5 years $100.00 4.50%

November 15, 2022
12:09 pm
HermanH
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Anyone notice the 2- and 5-yr 5.25% rate increase?

November 15, 2022
1:24 pm
lifeonanisland
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HermanH said
Anyone notice the 2- and 5-yr 5.25% rate increase?  

Nice...thanks.

November 18, 2022
10:21 am
HermanH
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Sigh, and 5-yr has already dropped back to 5%.

November 18, 2022
11:04 am
AltaRed
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Fully understandable. GoC5 bond yields have fallen recently.

November 18, 2022
11:34 am
HermanH
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Not for everyone. The GIC brokers have 5-yr rates rising to 5.48% or so.

November 18, 2022
12:42 pm
AltaRed
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HermanH said
Not for everyone. The GIC brokers have 5-yr rates rising to 5.48% or so.  

I understand that but I suspect those issuers are mainly narrow market institutions that have to compete for retail funds (as in the 30 institutions Monarch deals with) on a direct client basis from a smaller retail deposit base.

The bigger FIs, like LBC, EQ, HCG et al most likely source most of their deposits through the full service and DIY brokerage channel and do not have to pay much more than what corporate and government bonds pay. What LBC, EQ and Oaken will pay for 5 year GICs, on the GIC chart is about the same as they pay in the full service and DIY brokerage channel, which is about 150-170bp more than a GoC5 bond.

So I stand behind my first comment. LBC's 5 year GIC rate will tend to more or less trend with the GoC 5 year bond yield.

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