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GIC Rate increase
July 4, 2022
12:32 pm
HermanH
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I think that your idea to 1) purchase multiple GICs for each year and 2) have the interest paid out each year, will work. You get the flexibility of early redemption of the entire GIC principal without any penalty, since you already received any interest. By having several GIC for each year, you can control the number redeemed.

Personally, I would go for the long-term GIC because I do not expect rates to rise higher. For example, I would prefer the interest to compound at the 5.15% 7-yr rate because I do not expect any intermittent rates (between 1-6yr) to exceed 5.15% and would expect any money (interest or principal) taken before yr 7 to earn a lower rate. Of course, if you need or plan to spend the interest, then your scheme is eminently practical. sf-cool

July 4, 2022
12:41 pm
Loonie
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I would be careful of not exceeding insured limits. If your parents put them in joint names, and you have 20 GICs, that means maximum of 5000 per GIC.
It seems like a lot to keep track of to my way of thinking. When they come due, Motive will not necessarily have the best rates. It's likely they won't. So then you have all the bother of transferring these smallish amounts somewhere else.
I guess it depends on your financial situation.

July 4, 2022
1:49 pm
hwyc
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Greedy Guy said
New & higher GIC rates effective July 4:
1 yr = 4.24%
2 yr = 4.70%
3 yr = 4.74%
4 yr = 4.77%
5 yr = 4.88%
6 yr = 5.05%
7 yr = 5.15%  

There's still a rate gap ~0.5% of between 1yr and 2yr in general. Still want to wait a bit to see if the gap will narrow.

July 4, 2022
5:29 pm
Rebelyouth
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@HermanH @Loonie @hwyc

Thank you for your replies.

I probably reduce the number of GICs ( 1 or 2 for each year).

The amount will be for now less than 100k, so they should be ok.

And I probably will wait a bit, to see in 10 days if the BOC will increase another 50 or 75 points, and check the best deal.

What I try to convince is to move the money without blocking them completely, plus get some interest on a monthly bases like the TSFA, and Motive fit the bill.

Another one I am looking for is Hubert, with their 3 months steps GICs.

July 4, 2022
6:31 pm
Loonie
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Yes, I think Hubert might be ideal for people who aren't familiar with using alternative banks or credit unions as their customer service by phone is the best in the industry in my opinion.
You might need to explain the concept of a credit union.
Also, if your parents are reluctant , you might just try to convince them to by one GIC. When the interest rolls in, they might be willing to buy another.

July 4, 2022
7:45 pm
HermanH
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Before pulling the trigger on any GICs with annual interest redemption, make absolutely certain about the interest rate you plan to earn. I remember one institution (but forget which one) also offered annual interest redemption, but they did so at a reduced rate from the annual compound interest rate.

July 18, 2022
3:33 am
Greedy Guy
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GIC rates effective July 18:
1 yr = 4.30%
2 yr = 4.75%
3 yr = 4.80%
4 yr = 4.82%
5 yr = 4.95%
6 yr = 5.10%
7 yr = 5.15%

July 18, 2022
7:17 am
GR
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GIC rates up a little, including 4.30% for 1 yr. and 4.75% for 2 yrs. (monthly at same rate for ages 57+)

As noted elsewhere, savvy savings account rate increased to 3.00%.

https://www.motivefinancial.com/en/rates

July 25, 2022
12:28 am
Greedy Guy
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GIC rates July19--> July 25 (no change to +0.05%):
1 yr = 4.30% -->4.35%
2 yr = 4.75%-->4.78%
3 yr = 4.80%-->4.83%
4 yr = 4.82%-->4.85%
5 yr = 5.00%-->5.00%
6 yr = 5.10%-->5.10%
7 yr = 5.15%-->5.15%

July 25, 2022
2:04 am
cgouimet
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Greedy Guy said
GIC rates July19--> July 25 (no change to +0.05%):
1 yr = 4.30% -->4.35%
2 yr = 4.75%-->4.78%
3 yr = 4.80%-->4.83%
4 yr = 4.82%-->4.85%
5 yr = 5.00%-->5.00%
6 yr = 5.10%-->5.10%
7 yr = 5.15%-->5.15%  

What's with the 4.78, 4.82, 4.83? Kinda like labelling 1lb of butter 453.6g ...

CGO
July 25, 2022
2:50 am
HermanH
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Simply a PR exercise, to show that they are 'top of the ladder'.

July 25, 2022
4:28 am
canadian.100
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HermanH said
Simply a PR exercise, to show that they are 'top of the ladder'.  

Ok with me - as soon as someone/anyone offers 5% for One Year GIC, I will start to buy some.......
Interest (1 Year GIC) has to somewhat match the 5%-6.25% dividends (plus dividend tax credit) I get from my stocks these days - and I DO expect the stock market to be up considerably by end of 2023 when interest rate increases will have run their course.

July 25, 2022
8:04 am
agit
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canadian.100 said

Ok with me - as soon as someone/anyone offers 5% for One Year GIC, I will start to buy some.......
Interest (1 Year GIC) has to somewhat match the 5%-6.25% dividends (plus dividend tax credit) I get from my stocks these days - and I DO expect the stock market to be up considerably by end of 2023 when interest rate increases will have run their course.  

agree 100% why would anyone lock in for that rate when Scotia bank HISA around 3.90% Tangerine, CIBC and soon Meridian over 3.5%.

August 8, 2022
7:19 am
Greedy Guy
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GIC rates July25--> Aug 8 (1 yr change only):
1 yr = 4.35% -->4.43%
2 yr = 4.78%-->4.78%
3 yr = 4.83%-->4.83%
4 yr = 4.85%-->4.85%
5 yr = 5.00%-->5.00%
6 yr = 5.10%-->5.10%
7 yr = 5.15%-->5.15%

August 22, 2022
7:06 am
GR
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1 year GIC rate increased slightly to 4.49% (was 4.43%). Strange that they would raise the rate, but stay 1 point under the 4.50% for 1 year offered by at least three other financial institutions.

October 3, 2022
7:08 am
GR
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1 yr. GIC increased to 4.60% and 2 yrs. to 4.70%.

(Reminder that Motive pays monthly GIC interest at same rate as annual for ages 57+.)

https://www.motivefinancial.com/en/rates

October 30, 2022
11:50 pm
Greedy Guy
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GIC rates effective Oct 31:
1 yr = 4.60% -->4.70%
2 yr = 4.70%-->4.85%
3 yr = 4.70%-->5.05%
4 yr = 4.72%-->4.90%
5 yr = 4.85%-->5.10%

October 31, 2022
4:07 am
Nirvana7734
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Greedy Guy said
GIC rates effective Oct 31:
1 yr = 4.60% -->4.70%
2 yr = 4.70%-->4.85%
3 yr = 4.70%-->5.05%
4 yr = 4.72%-->4.90%
5 yr = 4.85%-->5.10%  

Looking good! That's the direction that I like to see. I haven't used a term-deposit/GIC since the 1990s. Based on the articles from the Financial Post and Globe & Mail posted elsewhere in the forms about the likely rate-peak being in December-January, I'm closing in on deciding which institutions I'd like to invest with. My partner and her family are big fans of Motive/Canadian Western Bank, so this may play into my decision.

Thank you for posting this update, Greedy Guy.

October 31, 2022
5:45 pm
MattS
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One feature motive has that many don’t offer is you can select any term you want , total flexibility. Ie to maintain my 5 yr ladder I have a chunk to invest in 2023 anytime. If I like the rates now I can take their 5 yr rate and book the term for 62 months which will keep my renewal in Jan 2028 where I want it. Most other institutions have no flexibility, they would say invest now if you like the rate for 60 months and keep it in HISA when it’s due for 2 months. I recommend motive also because they offer 1-10 yr terms if that’s of any interest. I get it 10 yrs is very long but I was comfortable with investing a small % of my total gic money for their 5.15 months back. Most don’t offer a 10 yr. So for total term flexibility down to any month and length of terms offered I give them an endorsement

October 31, 2022
6:21 pm
Loonie
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I didn't realize Motive allowed you to name your term That is a good feature, and would be especially useful for TFSAs where you want them to mature in December.

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