Long term GICs | Motive Financial | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
Long term GICs
September 2, 2020
1:14 pm
Rick
Member
Members
Forum Posts: 970
Member Since:
February 17, 2013
sp_UserOfflineSmall Offline

Either I haven't been paying attention or these are new:GIC.jpg
Don't think now is the time to lock in for 10 years though.

September 4, 2020
2:42 pm
Jon
Member
Members
Forum Posts: 364
Member Since:
August 9, 2014
sp_UserOfflineSmall Offline

Seems like Motive is taking benefit of the changes to CDIC, where the 5 years limit on GIC is lifted.

Such a long term GIC is a good alternative to anyone that invest in bond, as the rate is still significant higher than federal gov's bond of the same term.

September 5, 2020
12:11 am
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

I think there's merit in a 10 year too, for a portion of one's money, for diversification, to soften the blow if a longterm drought occurs.
EQ is better though, at 2.7% currently.

I remember asking on this forum what people thought about the 7 year one at DUCA when it was 3.5 or 3.75 . I was discouraged from investing in it, but now I wish I had. My hesitation is that I may not be around in ten years. I would take it as annual payout only, and joint account, if I did. I find it difficult, at this age, to consider an investment where I know there is a reasonable chance I might never be able to spend if I wanted to.

September 6, 2020
11:24 am
Alexandra
Member
Members
Forum Posts: 83
Member Since:
September 24, 2019
sp_UserOfflineSmall Offline

I was just looking yesterday at the Motive 10/9/8/ yr GIC rates as well.

I do see what you are saying loonie about never being able to spend the money.
You say EQ has a 2.7% rate. So, if you invested $100K (I know that is a lot), you would get $2700 per year if you opted to be paid out annually. Or, if you wanted, you can get paid monthly (at Motive anyway) if you are over 65. Kind of like a pension. The last few years up until March of this year, I was taking annual payments on my GIC's. sf-smile

September 6, 2020
12:19 pm
Dean
Slocan Valley, West Kootenays, BC.
Member
Members
Forum Posts: 391
Member Since:
January 12, 2019
sp_UserOfflineSmall Offline

.
Hmmm ... I guess I'm cut from a different cloth. I could Never talk myself into Locking money away in a GIC (or anything else) ... for 10 whole years ❗

I even struggle with the concept of a 5 year GIC ... LOL sf-laugh

'Carpe Diem'

    Dean

sf-cool " Live Long And Prosper " sf-cool

September 6, 2020
12:47 pm
Rick
Member
Members
Forum Posts: 970
Member Since:
February 17, 2013
sp_UserOfflineSmall Offline

Dean said
.
Hmmm ... I guess I'm cut from a different cloth. I could Never talk myself into Locking money away in a GIC (or anything else) ... for 10 whole years ❗

I even struggle with the concept of a 5 year GIC ... LOL sf-laugh

'Carpe Diem'

    Dean

  

I know what you mean. The anniversary date to start rung 3 of my 5 year TFSA ladder is this week and now I'm wondering if I should buy rung 4 and 5 for 6 & 7 years to finish it off. Locking in @2.1 and 2.2% for 6 or 7 years is less than inspiring, but rate outlook is not very appealing for the foreseeable future. Maybe I'll buy rung 3 & 4 and see what happens in the next 2 years for #5. Thoughts?

September 6, 2020
1:05 pm
Dean
Slocan Valley, West Kootenays, BC.
Member
Members
Forum Posts: 391
Member Since:
January 12, 2019
sp_UserOfflineSmall Offline

Rick said
I know what you mean. The anniversary date to start rung 3 of my 5 year TFSA ladder is this week and now I'm wondering if I should buy rung 4 and 5 for 6 & 7 years to finish it off. Locking in @2.1 and 2.2% for 6 or 7 years is less than inspiring, but rate outlook is not very appealing for the foreseeable future. Maybe I'll buy rung 3 & 4 and see what happens in the next 2 years for #5. Thoughts?  

"Thoughts?", you ask ... your 'guess' is as good as mine ❗ Who knows what's gonna happen in the next few years ❓❗ LOL sf-laugh

I"ll get back to you on this, next week ... after I consult with my Financial Advisor, Kamelia Spellwitch . . .


.

Ciao for now,

    Dean sf-wink

sf-cool " Live Long And Prosper " sf-cool

September 6, 2020
1:19 pm
Rick
Member
Members
Forum Posts: 970
Member Since:
February 17, 2013
sp_UserOfflineSmall Offline

Dean said

"Thoughts?", you ask ... your 'guess' is as good as mine ❗ Who knows what's gonna happen in the next few years ❓❗ LOL sf-laugh

I"ll get back to you on this, next week ... after I consult with my Financial Advisor, Kamelia Spellwitch . . .


.

Ciao for now,

    Dean sf-wink

  

Careful with Kamelia...she has a notoriously bad track record.sf-wink

September 6, 2020
2:17 pm
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Rick, I don't know what you should do, but don't lose sight of the fact that (presumably) rung 1 will be maturing next year and you will get another kick at the can each year. That's the point of a ladder in the longer term. But in the shorter term, when you are setting up, it can be more uneven.

Dean, we were very happy when we bought long provincial bonds back when rates were about 12%, and were sad to see them come to an end. They ran about 15 years if I remember correctly. If rates were high, you might find long terms more palatable.

There may be a place, too, for redeemable GICs in some people's portfolios. I know the rates will be even lower then but it gives you an option if you should need more cash that you hadn't anticipated.
One way to accomplish this is through Hubert's one year GICs, which you just keep rolling over - if you don't cash them, the rates remain competitive; if you do, you only lose a bit on a portion of one year.

September 6, 2020
2:33 pm
topgun
Member
Members
Forum Posts: 36
Member Since:
September 6, 2020
sp_UserOfflineSmall Offline

Dean said
.
Hmmm ... I guess I'm cut from a different cloth. I could Never talk myself into Locking money away in a GIC (or anything else) ... for 10 whole years ❗

I even struggle with the concept of a 5 year GIC ... LOL sf-laugh

'Carpe Diem'

    Dean

  

It depends on your priorities.

When I started saving in the early 1970's I bought 5 year RRSP GIC's. CDIC insured them up to 5 year term. In the 1980's when interest rates were high I purchased 17 1/2 and 18 1/2 year Ontario Hydro strip bonds yielding 11 3/4%. I cashed them after about 13 years when interest rates dropped to the 6-7% range.

I have views today about buying GIC's.

I am creating a 5 year ladder with my non-registered GIC's. The advantage is about 20% of that part of my portfolio matures each year. I take out interest on maturity.

If you have GIC's in a RRIF I see no problem having any maturity for GIC's. The FI cashes the GIC with the lowest interest rate each year with no interest penalty.

It is the liquidity factor that makes me purchase these long term GIC's.

In a TFSA OK to have a 10 year ladder approach if you are less than 62. They mature annually at age 72. Like withdrawal from RIFF.

I passed that age so I will not consider. Never put much into TFSA since the option did not exist when I worked.

Many options to consider when making each investment.

Enjoy the day.

Have a Great Day

September 6, 2020
3:54 pm
Rick
Member
Members
Forum Posts: 970
Member Since:
February 17, 2013
sp_UserOfflineSmall Offline

Loonie said
Rick, I don't know what you should do, but don't lose sight of the fact that (presumably) rung 1 will be maturing next year and you will get another kick at the can each year. That's the point of a ladder in the longer term. But in the shorter term, when you are setting up, it can be more uneven.

Thanx Loonie. Rung 1 was started in 2018 so it's not due until 2023. Rung 2 was started 2019 and 3 will be 2020. With the new long term offerings, I can complete the whole 5 year ladder this year by purchasing a 5, 6, and 7 year, and renewing the 6 and 7 year for 5 years when they come due. OR....get a 5 and 6 year and see where rates go in the next year or 2 for the final rung in 2023.
Kamelia was no help at allsf-confused

September 6, 2020
4:56 pm
topgun
Member
Members
Forum Posts: 36
Member Since:
September 6, 2020
sp_UserOfflineSmall Offline

Rick said

Loonie said
Rick, I don't know what you should do, but don't lose sight of the fact that (presumably) rung 1 will be maturing next year and you will get another kick at the can each year. That's the point of a ladder in the longer term. But in the shorter term, when you are setting up, it can be more uneven.

Thanx Loonie. Rung 1 was started in 2018 so it's not due until 2023. Rung 2 was started 2019 and 3 will be 2020. With the new long term offerings, I can complete the whole 5 year ladder this year by purchasing a 5, 6, and 7 year, and renewing the 6 and 7 year for 5 years when they come due. OR....get a 5 and 6 year and see where rates go in the next year or 2 for the final rung in 2023.
Kamelia was no help at allsf-confused  

I started the 5 year ladder in 2018 on part of my portfolio. At the time I had no specific plan. I purchased about 20% 1 year, 20% 2 year, 20% 3 year, 20% 4 year and 20% 5 year. I remove interest on maturity date. It will take several years to have exactly 5 GIC's.

To complete the 5 year ladder purchase a 1 and 2 year term. When each matures buy a 5 year. You have many options.

I thought about converting a 5 year ladder to a 10 year ladder. How do you do this? When GIC matures split principle in 1/2. Purchase a 5 year and a 10 year. It still takes 5 years to convert. Not sure I want this. The difference in premium from a 1 year to a 5 year is not a big difference.

Have a Great Day

September 6, 2020
5:27 pm
Rick
Member
Members
Forum Posts: 970
Member Since:
February 17, 2013
sp_UserOfflineSmall Offline

topgun said
I started the 5 year ladder in 2018 on part of my portfolio. At the time I had no specific plan. I purchased about 20% 1 year, 20% 2 year, 20% 3 year, 20% 4 year and 20% 5 year. I remove interest on maturity date. It will take several years to have exactly 5 GIC's.  

Thanx topgun. That's exactly what I did with my RSP ladder. As the shorter term ones mature we renew at 5 years.
Not comfortable locking in for ten years either.

September 7, 2020
6:54 am
Loonie
Member
Members
Forum Posts: 6404
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

I think maybe you guys set up your ladder initially in a different way than I did.

I tried, where cash available, to set it up so that one would mature each year right from the beginning. It's pretty much all in place now for non-registered. I'm still working on RIF and TFSA, but I have laid out a plan for them which I am following. This gives me enough flexibility annually if I should decide to start on another strategy or kind of investment.

The tricky part, for me, is how many rungs to put on my ladder (how many years' terms). Regardless of rates, a long term investment like 7 or 10 years is harder to justify the older you get once you're in your 70s. I have read that some people cut down to 3 rungs in their 80s and one person said he only bought one-years from his mid-80s on. I guess it boils down to whether you are ever going to use this capital or do you see it strictly as annual income supplement. That could be a hard decision to make.

While I can see the value of putting some of one's money into the longer terms (over five years), I wouldn't want my ladder to be weighted in that direction. I would want to fill in the ones maturing over the next five years first, to allow for possibility of more desirable rates then - of course these may not materialize!

September 7, 2020
8:56 am
dentgal
Member
Members
Forum Posts: 159
Member Since:
October 11, 2015
sp_UserOfflineSmall Offline

Does anyone know if Motive has a separate arm to allow for double the CDIC protection? How about the other institutions? I'm maxed at Oaken, EQ, People's trust, etc. I have not dealt with Motive.

September 7, 2020
9:07 am
file
Member
Members
Forum Posts: 73
Member Since:
August 1, 2015
sp_UserOfflineSmall Offline

Strictly Canadian Western Bank (Motive is a division/branch) as far as I'm aware.

September 7, 2020
9:14 am
Norman1
Member
Members
Forum Posts: 3398
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

There are three CDIC members in the Canadian Western Bank group of companies:

  1. Canadian Western Bank
  2. Canadian Western Trust Company
  3. Valiant Trust Company

I don't know if Motive Financial offers deposits in the two trust companies of the group.

September 8, 2020
12:30 am
Rick
Member
Members
Forum Posts: 970
Member Since:
February 17, 2013
sp_UserOfflineSmall Offline

From Motive site:
As a Motive client, your chequing, savings and investments are eligible for deposit insurance through Canadian Western Bank, a member of Canada Deposit Insurance Corporation. In the case where a person has eligible deposits through Motive, the $100,000 coverage limit is applied to the aggregate eligible deposits of that person with Motive and CWB.

If you’re also a CWB client, it’s important to know that your deposits at CWB will be combined with your deposits at Motive when considering your maximum coverage limitation.

From CDIC site:
Canadian Western Trust Company is a subsidiary of Canadian Western Bank and a CDIC member in its own right.
Eligible deposits of up to $100,000 per category are protected separately from deposits at Canadian Western Bank.

Valiant Trust Company is a subsidiary of Canadian Western Bank and a CDIC member in its own right.
Eligible deposits of up to $100,000 per category are protected separately from deposits at Canadian Western Bank.

September 8, 2020
12:36 am
Rick
Member
Members
Forum Posts: 970
Member Since:
February 17, 2013
sp_UserOfflineSmall Offline

Loonie said
I think maybe you guys set up your ladder initially in a different way than I did.

I tried, where cash available, to set it up so that one would mature each year right from the beginning. It's pretty much all in place now for non-registered. I'm still working on RIF and TFSA, but I have laid out a plan for them which I am following. This gives me enough flexibility annually if I should decide to start on another strategy or kind of investment.

The tricky part, for me, is how many rungs to put on my ladder (how many years' terms). Regardless of rates, a long term investment like 7 or 10 years is harder to justify the older you get once you're in your 70s. I have read that some people cut down to 3 rungs in their 80s and one person said he only bought one-years from his mid-80s on. I guess it boils down to whether you are ever going to use this capital or do you see it strictly as annual income supplement. That could be a hard decision to make.

While I can see the value of putting some of one's money into the longer terms (over five years), I wouldn't want my ladder to be weighted in that direction. I would want to fill in the ones maturing over the next five years first, to allow for possibility of more desirable rates then - of course these may not materialize!  

I did a mixture of both....Hubert I got a 1,2,3,4 & 5 year and renew each at a five year term when matured.
Motive I purchased a 5 year every year.

September 8, 2020
8:38 am
Alexandra
Member
Members
Forum Posts: 83
Member Since:
September 24, 2019
sp_UserOfflineSmall Offline

In the beginning, I used four different banks for GIC's. One bank I would buy 5 GIC's one maturing each year say in January. The other bank same thing only maturing say in April, then the other in July etc. So every quarter one would mature. Eventually, I would have a GIC maturing each month. Pretty well at each maturity I would reinvest at the five year rate. Sometimes though, if a 2 or three one was at a better rate, I would go for that instead. There are certainly different ways of doing this. If you have the money and you know you aren't going to need it, and the rates happen to be super good, then buy all five yr terms, after five years you will have the five year ladder. If you just need a little money, have the GICs interest paid out annually instead of at maturity.

No permission to create posts

Please write your comments in the forum.