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Luminus 5 Year Escalator @3.50% Average
May 22, 2019
12:04 pm
gicjunkie
Ontario
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As per Peter's suggestion, here is a separate thread identifying this rate special.

5 Year Escalator (Minimum $500 deposit, RSP and RIF eligible) Rates
1st Year 1.50%
2nd Year 2.50%
3rd Year 3.50%
4th Year 4.50%
5th Year 5.50%
Average rate of 3.50%

https://www.luminusfinancial.com/Personal/Rates/

Again, this has been available for a while. Don't know how long it will last.

May 29, 2019
9:32 am
gicjunkie
Ontario
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FYI : These escalator GICs are not cashable on the anniversary dates. Interest may be compounded or paid annually. They say a T5 will be issued annually in either case.

May 29, 2019
10:16 am
Doug
British Columbia, Canada
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gicjunkie said
FYI : These escalator GICs are not cashable on the anniversary dates. Interest may be compounded or paid annually. They say a T5 will be issued annually in either case.  

Yeah, as long as the interest is compounded to the GIC annually, institutions in my experience report the interest annually on a T5 (which is what I want). I don't want them to compound the interest internally without showing a compound interest line item on the GIC "account" because then I'd have to pay tax on the interest at maturity instead of annually.

Cheers,
Doug

May 29, 2019
1:27 pm
gicjunkie
Ontario
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Doug said

Yeah, as long as the interest is compounded to the GIC annually, institutions in my experience report the interest annually on a T5 (which is what I want). I don't want them to compound the interest internally without showing a compound interest line item on the GIC "account" because then I'd have to pay tax on the interest at maturity instead of annually.

Cheers,
Doug  

The problem is always that they say they will issue the T5, then they don't. I am finding more and more mistakes being made these days on procedural issues. One must always pay attention to the details. The CRA wants interest accrued annually and I don't want CRA problems later on when the total is paid.

June 2, 2019
7:01 pm
dealjunkie
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why not 3.5 each year better compounding effect right than the step-up

June 12, 2019
10:11 am
dealjunkie
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gicjunkie said
5 Year Escalator Rates
1st Year 1.50%
2nd Year 2.50%
3rd Year 3.50%
4th Year 4.50%
5th Year 5.50%
Average rate of 3.50%

https://www.luminusfinancial.com/Personal/Rates/
 

Is the compounding effect on this escalator the same as good if the 3.5 was spread out evenly 3.5 annually times 5? What's the compounded yield at maturity?

June 12, 2019
3:07 pm
gicjunkie
Ontario
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According to my rudimentary math skills, the difference is about $56.00 in total on a $100.000.00 investment over the five years, in favour of the 3.50% annual compounding. Not worth quibbling about. The average annual yield is 3.7538%.

June 12, 2019
6:38 pm
dealjunkie
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Anyone here who wouldn't do their 5yr escalator cons?

June 24, 2019
4:09 pm
gicjunkie
Ontario
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This rate will likely not last past this week, so if you are interested, act quickly.

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