New GIC rates | Motive Financial | Discussion forum

GR said
Minuscule rate increases for 2 and 3 year GICs to 2.50% and 2.70%, respectively, for all products. Would like to see Motive increase their savings account rate, which hasn't been competitive for a long time.  

While the shorter duration GICs are higher than normal due to the current economic environment, one would think HISA rates should be, too. However, as I've said before, somewhat ad nauseam (an "ode" to Loonie ), "what's old is new again." The "mini-bank run" vis a vis Home Trust/Home Bank last spring has, I think, made banks and CUs make their GIC rates more competitive than HISAs again. Even Tangerine is starting to get half decent GIC rates again (i.e., 2.25% for less than 5 years, I believe)! As much as we'd all like to see higher regular, posted HISA rates, I see a return to competitive GIC rates. 🙂

Thoughts? Loonie?

Cheers,
Doug

Jon said
Totally agree Doug, especially FI believe the interest rate is only going to move up in the short to mid term and they want to lock in the low rate they are enjoying right now to ensure their future profitability (on the expense of current profitability).  

Great point re: current versus future profitability, Jon. 🙂

In that respect, I still we'll do pretty well with 1-3 year GICs over HISAs as there's still enough of a "spread" over those GIC rates, for the most part, over most HISA rates. If HISA rates start to move, we'll need to re-evaluate that and increase cash positions. 🙂

Cheers,
Doug

Wow! I don't think I've ever been ode-ed before!

What Jon is saying makes sense to me. I am sure they are trying to get us to commit for longer term in anticipation of higher rates. Mortgagees are no doubt also trying to lock in for longer rates, so there is a market.

The question of HISA vs 1,2,3 rates is still in flux for me.

Before last year's rate hikes, the spread between HISA (esp promos) and 1,2,3 was so dismal that there really wasn't much to choose. At that time, I felt the choice was basically between HISA and 4,5 yr. - the latter just to get something happening while we waited eternally for the rate rise, which took a good five years longer than first anticipated (long enough for a complete GIC cycle). So, I took some longer terms and left quite a bit in HISA. Still think that was the right move for the time.

We came very close to having a clear reverse curve, and "negative interest" was bandied about, scaring us all. I forget the technical name, where the longer rates are lower than the shorter ones. This wasn't very long ago that we were in danger of this happening.

Now, there is confidence that rates will go up and up on the part of some folks. The normal curve between long and short is starting to re-establish itself but is still jittery on the short end. 2.48 is nice, but we can get 2.5 at Tang, Ideal, etc. on HISA with prospect of higher rates ell within 2 years on either HISA or GICs.

So, I see no compelling reason for taking 1,2,3 yr rates. Some of the 3's might be OK in smallish doses. Still might be worthwhile going for 5 for 3%.

I like Hubert's one year cashable, staggered, now at 2.25 p.a. Pay is decent if not spectacular, and gives me flexibility if rates really do go up. When 5 yrs gets to 3.25, I'm in for some, and will wait for more.

would ideally like to get out of rate roulette with Tang and others as it's a big nuisance and take up far too much time, but we're not there yet. Even so, will likely stick with Hubert's one-year GICs, cashable once or twice a month from which to draw for extraordinary expenses or rolled over. This should substantially reduce what i have in HISAs.

Motive GIC rates increasing:

12 Month Term 2.18%
24 Month Term 2.56%
36 Month Term 2.77%
48 Month Term 2.80%
60 Month Term 3.06%

Motive reduces GIC rates again, against market trend.

12 Month Term 2.30%
24 Month Term 2.70%
36 Month Term 2.95%
48 Month Term 3.15%
60 Month Term 3.30%

Jon said
They increase long term rate more than short term rate, implying that they expect interest to keep increasing.  

Yes, that's what I thought too. But it could also reflect the fact that borrowers feel the same way, so there is more demand for longer terms.

Non-Redeemable Motive® GICs1 (Rates effective 2018-06-25) Rates
12 Month Term 2.30%
24 Month Term 2.65%
36 Month Term 3.00%
48 Month Term 3.15%
60 Month Term 3.35%

Changed the 2 & 3 year rates a bit starting Jun 25. Motive seems to adjust their rates more often than most. Usually minor adjustments, but more frequent.

Like I said....those rates lasted a week.
Non-Redeemable Motive® GICs1 (Rates effective 2018-07-16) Rates
12 Month Term 2.20%
24 Month Term 2.84%
36 Month Term 3.18%
48 Month Term 3.23%
60 Month Term 3.49%

So BoC raise prime .25% and rates are adjusted by between 0 and .08%

Still no movement on their HISA accounts
5 year rate is getting better and better looking. Crak 4% this year would be nice.

Some further incremental increases...

Non-Redeemable Motive® GICs1 (Rates effective 2018-08-07) Rates
12 Month Term 2.35%
24 Month Term 2.97%
36 Month Term 3.23%
48 Month Term 3.31%
60 Month Term 3.51%