New GIC Interest Rates | Motive Financial | Discussion forum

Those are great rates on 4 and 5 yrs if you want to lock in now.
You can do a bit better at Bridgewater through gicwealth on 1, 2, 3 yrs, non-reg'd, with minimums, subject to change. I don't know if you can get this directly or not. 1 yr 2.220 ; 2yr 2.420 ; 3yr 2.70

Christmas is coming - and so is RSP season!

Peter said
Thanks for the heads up. I'd challenged them on Twitter about their lagging regular savings and TFSA rates, and they responded to say that their GIC rates were competitive, which is true: I think they are the leaders in GIC rates at the moment.  

Correct. That's what we're seeing, I think. "What's old is new again" is the mantra of the day, at least in my eyes. Most banks and credit unions are now raising their GIC rates, typically at the shorter end of the interest rate curve, when the BoC raises overnight lending and/or deposit rates. This is, in part, due to the high interest savings account "run" on Home Bank and Home Trust, earlier this year, also on banks wanting to better match their deposits with their loans originated and on the shorter term bond market rates rising faster than the long-term rates (due to the slow economic growth) - or a flattening of the yield curve.

HISA rates will increase but probably only at a rate of 0.25% per 0.75-1% hike in lending prime rates. 🙂

I am also now updating my own forecast and forecasting another technical recession for Canada for two consecutive quarters of late 2017 and/or winter/spring 2018, based on recent GDP, CPI and employment data. I am also forecasting, at most, only one 0.25% rate hike in 2018, whereas many forecasters in the private sector were calling for four earlier in the year.

Cheers,
Doug

Figures, I bought a 60 month term on November 14th. Just a week too soon.

Rick said

Give them a call...they have a two week guarantee.
NEVER hurts to ask.  

Hi Rick,
Thank you for the suggestion. I tried, but apparently the 14 day guarantee is only on the TFSA. 3 days for the GIC.

Another drop;
Non-Redeemable Motive® GICs1 (Rates effective 2017-12-04) Rates
12 Month Term 1.83%
24 Month Term 2.28%
36 Month Term 2.65%
48 Month Term 2.72%
60 Month Term 2.97%

5 year is under 3% now. Too bad.... I had high hopes for others cracking the 3% threshold. One thing about Motive...their GIC rates can jump around sometimes.

Rick said
Another drop;
Non-Redeemable Motive® GICs1 (Rates effective 2017-12-04) Rates
12 Month Term 1.83%
24 Month Term 2.28%
36 Month Term 2.65%
48 Month Term 2.72%
60 Month Term 2.97%

5 year is under 3% now. Too bad.... I had high hopes for others cracking the 3% threshold. One thing about Motive...their GIC rates can jump around sometimes.  

I think 3% is the new "high" for 5-year rates. Do you ever look at 6- or 7-year terms from the Manitoba CUs if they have rates above 3%? 🙂

With the Canadian economy slowing, as I predicted, I think the BoC is on hold through most of, if not all of, 2018 and into 2019. As such, I expect HISAs to remain relatively flat, to decline marginally, giving back any "rate rises" earlier this year.

Officially, though, the BoC will say, "expect rate rises," so as not to overheat the housing market again. For possibly the first time ever, we will divergence from their guidance to what they actually plan to do behind closed doors. 🙂

Cheers,
Doug

Loonie said
I'm inclined to agree with you, Doug.
I don't really understand the relatively unguarded optimism about the Cdn economy. Jobs may be up, but they're mostly precarious. Trump is playing hardball. We're supposed to be thriving from the tech sector yet results on kids' math learning don't seem to me to support this future. And so on.
Predictions on inflation seem to be bearing fruit, however!  

See? We do agree on a lot of things, Loonie.

Inflation, excluding so-called "volatile items" like fuel and housing, will be nearly non-existent for a decade, perhaps more. You're absolutely right about the precarious work. Uber, Airbnb, Amazon, offshoring of jobs, productivity gains (and I will debate any columnist [*cough* Toronto Star columnist David Crane *cough*] who laments the lack of such gains in Canada! to put it bluntly, they don't know shit!), not to mention forthcoming self-driving transport trucks (although that's probably 10 years out, at best), the death of retail stores and all of that, it's not a pretty economic picture. 🙁

It's why I'm a big proponent of universal basic income, to encourage entrepreneurship by guaranteeing a minimum annual income based on your previous year's income tax return (also very efficient, requiring no additional federal government workers), with temporary UBI available based on a contact centre adjudication looking at your current year's income and bank statements, of, let's say, $22,000. This would allow for people to turn to more liberal arts-related jobs (i.e., blogging, freelance journalism, knitting for sale on Etsy, etc.) as well as ramping up their "side gigs" into full time "gigs" (i.e., Uber) and the federal and provincial governments would "top up" your income to $22,000 until UBI is no longer paid. This would replace provincial income and disability assistance and allow for the layoff of thousands of highly paid provincial government workers in thousands of costly offices across the country by having them centralized in a contact centre per province. It would also replace GIS and Spouses Allowance such that those seniors earning less than $22,000 on combined CPP+OAS would now receive a partial UBI top-up to $22,000. 🙂

Bill Gates and Elon Musk are even advocating for this. I maintain that with the above government payroll cost savings and a "an employer robot levy," it can essentially pay for itself. It's a way to, essentially, compensate us humans for the loss of jobs to robots.

Cheers,
Doug

Doug said

I think 3% is the new "high" for 5-year rates. Do you ever look at 6- or 7-year terms from the Manitoba CUs if they have rates above 3%? 🙂

With the Canadian economy slowing, as I predicted, I think the BoC is on hold through most of, if not all of, 2018 and into 2019. As such, I expect HISAs to remain relatively flat, to decline marginally, giving back any "rate rises" earlier this year.

Officially, though, the BoC will say, "expect rate rises," so as not to overheat the housing market again. For possibly the first time ever, we will divergence from their guidance to what they actually plan to do behind closed doors. 🙂

Cheers,
Doug  

That being said....Motive is back up to 3% on the 5 year GIC again. They do like to move the goal lines around more frequently than others. I did look @ the longer terms, but I like the division of 2 - 5 year ladders six months apart...just works out for me, and with rates so volatile, not crazy about locking anything in for that long...especially since the difference between the 5 and 6 is negligible. Again, ladders should smooth that out. As for speculation on rates... we're stuck with whatever #DentureDonald does, and it looks like rates there are going up slowly but surely. No way BoC will allow a significant difference in rates between us and them. My 2 cents.

Rick said

That being said....Motive is back up to 3% on the 5 year GIC again. They do like to move the goal lines around more frequently than others. I did look @ the longer terms, but I like the division of 2 - 5 year ladders six months apart...just works out for me, and with rates so volatile, not crazy about locking anything in for that long...especially since the difference between the 5 and 6 is negligible. Again, ladders should smooth that out. As for speculation on rates... we're stuck with whatever #DentureDonald does, and it looks like rates there are going up slowly but surely. No way BoC will allow a significant difference in rates between us and them. My 2 cents.  

Thanks Rick for your thoughts on the longer terms and that they don't work particularly well for your strategy. Fair enough.

#DentureDonald? Don't think I've heard of that one but I like it a bit better, less condescending. 😉

I fear you might be right about the BoC not allowing for Canada-U.S. interest rate policy divergence, despite the fact that this would actually likely be exceedingly good for Canada as this would likely mean a significant or material further weakening of the Canadian dollar, which would be beneficial not only for bringing whatever is left of the North American manufacturing sector back to Canada (I put less stock on this) but also for important back office services (i.e., contact centres), which provide decent, but not necessarily cushy/very well paying, "living wage" jobs (i.e., $14-17). If that's the way they go, expect further material Canadian economic weakness that precipitates another, long-term Canadian recession (perhaps even a depression). It's funny that Stephen Poloz came from the Export Development Canada Crown corporation so he obviously has an international trade background and even earlier on in his BoC tenure, he consistently "talked down" the Canadian dollar, a move which I lauded. Now, he seems to be "cow towing" (spelling?) to the Canadian financial markets community (i.e., Canadian banks) and to government in trying to get the rates up. 🙁

Be careful what you wish for, Mr. Poloz. We are not in normal economic times where "runaway inflation" is in any danger. 🙁

Cheers,
Doug