Another GIC rate increase at LBC Digital | LBC Digital | Discussion forum

HermanH said
Anyone notice the 2- and 5-yr 5.25% rate increase?  

Nice...thanks.

Fully understandable. GoC5 bond yields have fallen recently.

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.