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Questions about institutions selection.
November 14, 2022
10:56 am
Canadianbull
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Who should I go with for 5 years GIC.
Motive, EQ or Tangerine?
Is it good to buy more than 5 years GIC if I don't need the money?
Is there any other option out there?
Or should I invest in stocks instead?

November 14, 2022
11:10 am
HermanH
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Canadianbull said
Who should I go with for 5 years GIC.
Motive, EQ or Tangerine?

One factor may be the type of account. For example, if you buy a registered TFSA/RRSP GIC and wish to move the funds at maturity, some banks like Motive and Tang will charge you a transfer fee, while EQ will not.

November 14, 2022
11:22 am
Loonie
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I think any of these financial institutions will do.
I would choose Motive, at least today, as it has the best rate at 5.2%. This will outweigh transfer fees on registered funds over a five year period, unless you are investing a very small amount. However, Motive doesn't offer RIFs as far as I know.
If ownership of the GIC will be joint, you will need to avoid EQ, as it doesn't offer joint GICs.

If you are in the GTA and the funds are not registered, I would recommend deposit broker GICWealth, currently offering 5.35% with minimum $25,000 investment, but I am not sure who the issuer is.

Your other questions are harder to answer, and depend on many other personal factors including your age, other resources and investments, risk tolerance, your assessment of the economy, etc.

November 14, 2022
12:21 pm
Alexandre
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My personal opinion, of course, but I would not rush to lock my money long term while BoC keeps increasing rates. I'll wait till these rate increases slow down.

If you never had account with Tangerine, you could get their Savings account 4.5% promo for 5 months, enough to wait and see how far up GICs will go.
https://www.tangerine.ca/en/landing-page/earnmore

November 14, 2022
12:30 pm
savemoresaveoften
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Loonie said
I think any of these financial institutions will do.
I would choose Motive, at least today, as it has the best rate at 5.2%. This will outweigh transfer fees on registered funds over a five year period, unless you are investing a very small amount. However, Motive doesn't offer RIFs as far as I know.
If ownership of the GIC will be joint, you will need to avoid EQ, as it doesn't offer joint GICs.

If you are in the GTA and the funds are not registered, I would recommend deposit broker GICWealth, currently offering 5.35% with minimum $25,000 investment, but I am not sure who the issuer is.

Your other questions are harder to answer, and depend on many other personal factors including your age, other resources and investments, risk tolerance, your assessment of the economy, etc.  

not a fan of GIC brokers for longer term, unless it provides a significant unbeatable yield advantage. Just too much of a hassle if the broker / brokerage shop is no longer around and one needs to deal with maturity / settlement etc.

November 14, 2022
3:15 pm
Loonie
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Have you actually encountered this problem, savemoresaveoften, or are you just speculating?

November 14, 2022
4:11 pm
savemoresaveoften
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Loonie said
Have you actually encountered this problem, savemoresaveoften, or are you just speculating?  

Touch wood I have not encountered this problem. However at least one of these brokers are essentially 1-2 men shop. There can be any personal reason or incident that results in it closing shop in short or no notice.

November 14, 2022
4:57 pm
Loonie
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I suppose something could go very wrong, but the ones we are most familiar with have very large corporate customers as well, and the broker doesn't possess the money. He is just an agent.

Monarch has morphed over the decades. When I first bought through them, i think it was called The Investment Shop. That was about forty years ago. I believe it has changed owners, and I think that is what would likely happen with smaller outfits.
It might be a small nuisance if the business actually came to an end but the issuer would still owe you and would pay you.
It's not something I worry about, personally, as I think the odds of problems are very small indeed and I am sure it would get sorted out.

But I take your point that some people might want to weigh the extra income against perceived potential hassles.

I think it would likely be a lot less hassle though than many promos we follow, with all their complicated fine print! I ignore most of them.

My criteria for promos etc run approximately like this: I won't do anything that won't pay me at least $500 extra, and it has to be fairly easy to do; for closer to $1000, I will tolerate some inconvenience; and for more than that I will likely be willing to drive somewhere or go through an extra hoop. I'm still waiting for the promo that will make it worth my while to get on a plane and fly to another province!
But when it comes to a deposit broker with whom I already have a relationship, just another 10 bps will get my business, maybe less.

In the current example, if you put 100K with GICWealth at 5.35%, compounded for five years, you get about $920 more at the end than the rate at Motive, the nearest competitor, at 5.20%. To me, that's worth doing. (Buyer should be aware of insurance limits, including interest.)

November 14, 2022
5:40 pm
HermanH
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savemoresaveoften said Touch wood I have not encountered this problem. However at least one of these brokers are essentially 1-2 men shop. There can be any personal reason or incident that results in it closing shop in short or no notice.  

Good point to raise. My previous broker committed suicide and left a mess to resolve.

November 14, 2022
5:45 pm
Norman1
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Those small one or two person deposit brokers usually place the GIC's in client's name and don't hold the GIC's. It doesn't matter if the broker goes away afterwards. Client is the direct owner of the GIC in the records of the issuer.

Just have to interact directly with GIC issuer until one finds another deposit broker.

November 14, 2022
5:49 pm
HermanH
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Loonie said
Monarch has morphed over the decades. When I first bought through them, i think it was called The Investment Shop. That was about forty years ago. I believe it has changed owners, and I think that is what would likely happen with smaller outfits.

Isn't Monarch buying GIC Direct?

Loonie said
My criteria for promos etc run approximately like this: I won't do anything that won't pay me at least $500 extra, and it has to be fairly easy to do; for closer to $1000, I will tolerate some inconvenience; and for more than that I will likely be willing to drive somewhere or go through an extra hoop. I'm still waiting for the promo that will make it worth my while to get on a plane and fly to another province!

When I was looking for a place to stash US funds, I was seriously considering considering International Bank of China (Canada) ICBK. It required an in-person visit to open the account. I calculated that I fly to Vancouver from Edmonton, open the account, and return and still make more than thethe pathetic rates offered from Edmonton. I did not go through with it, but it was an interesting exercise.

November 14, 2022
6:20 pm
suburbs4life
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Slightly off topic Q but why are people so negative about the fact that eq does not offer joint GIC’s? I assume this is a goal for people trying to avoid probate fees on estates?

Whoever, gives the money will still be taxed at their marginal rate and for minors. Are people trying to insure more than $100k at a time with joint GIC with person A and B then separate GIC with person A and then person B?

November 14, 2022
7:02 pm
Loonie
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1. Double taxation. You have to pay probate tax TWICE on the same money - once after each person dies.
2. No widow(er) should have to worry about accessing their money (minus 1.5% tax - Ontario) on death of spouse.

These issues loom larger as you age.

S.

November 15, 2022
6:27 am
Canadianbull
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Thank you all for your valuable feedback.

November 15, 2022
6:44 am
savemoresaveoften
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Norman1 said
Those small one or two person deposit brokers usually place the GIC's in client's name and don't hold the GIC's. It doesn't matter if the broker goes away afterwards. Client is the direct owner of the GIC in the records of the issuer.

Just have to interact directly with GIC issuer until one finds another deposit broker.  

Yes and No. I have contact the issuer direct and was told since it is through a broker, have to channel thru the broker for all enquiries only. The issuer wont confirm details whether I even have a GIC with them or not.
So while one may indeed be the legal owner of the GICs, it is not as simple as described to have it sort out if the special circumstance arises. Just saying.

November 15, 2022
7:22 pm
suburbs4life
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Thanks Loonie

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