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Home Bank GiC Rate Drop: Oaken Follow?
July 24, 2017
3:14 pm
Nehpets
Ontario
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My GIC broker informed me Home Bank has decreased its one year rate to 2.45% from 2.55% this morning.

I called Oaken to find out if they were also lowering their rate, but the telephone rep said they have no information.

Applications for an Oaken / Home Bank GIC will guarantee today's rate for 5 business days, and they will still place the GIC with Home Bank at the Oaken rate if your Oaken CDIC limit is at its maximum.

July 25, 2017
7:59 am
frank87
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Not surprised. The current rates were unsustainable. They were likely getting too MUCH deposits over the past month.

July 25, 2017
2:42 pm
Doug
British Columbia, Canada
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I'm not so sure an Oaken rate drop is that likely - Home Capital Group has been diverging the deposit broker-sourced GIC rates from its direct-to-consumer Oaken brand of GICs in terms of rates so Oaken will, at least for the medium-term, have higher rates than deposit broker-sourced GIC rates.

Also, is your deposit broker giving you the straight goods or did they just cut their underlying "fee" that they pay the deposit broker for new deposits, forcing the deposit rate to cut their posted public Home Trust/Home Bank rate? That's rhetorical - you'll never get a truthful answer there! sf-cool

Seems we have to "grin and bear it" and open up yet another account ourselves with Oaken...in fact, the unreliability of deposit brokers in trying to shun Home Capital Group's deposit-taking entities during its period of stress highlighted an important vulnerability in that channel and may, in fact, be the final "death knell" for deposit broker-sourced deposits. We're seeing this happening with mortgage brokers and I suspect, within 5-10 years, you'll only see a handful of deposit brokers across the country (if that, it'll probably be 0). Some GICs may still be available through the "Big 5" banks' discount brokerage operations but will likely be greatly reduced and limited to their own offerings. 🙂

Cheers,
Doug

July 25, 2017
3:39 pm
Loonie
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I hadn't thought about it before, but I suppose there's less market for deposit brokers now that we're all DIYers and can get better rates quite often on our own. As it stands, I think of them as just another option, along with my own searches. I haven't used one in a long time and would only use them if it made a significant difference. At one time, it was the only way you could find out about more obscure FIs.
But they may continue to be a convenience for some people.

July 25, 2017
4:12 pm
Nehpets
Ontario
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Loonie said
... we're all DIYers and can get better rates quite often on our own. As it stands, I think of them as just another option, along with my own searches.  

Most of the time, I can do better on my own, sometimes calling a manager at select FI's I deal with; however, it seems some FI's when in a hurry to raise capital, will offer (my) broker a sweet, time limited, interest rate...so it's just another option for me too.

Doug said Also, is your deposit broker giving you the straight goods or did they just cut their underlying "fee"

That's right, we'll never know, but you've made me wonder!...sf-smile

July 26, 2017
12:47 pm
Loonie
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From Oaken today:

"As part of our commitment to making customers the first to know about our rate changes, please note that effective Thursday, August 3, 2017, we'll be decreasing our interest rates for the following terms:

•1 Year GIC - 2.50% (currently 2.75%)

•18 Month GIC - 2.60% (currently 2.85%)
•2 Year GIC - 2.70% (currently 2.95%)
•3 Year GIC - 2.80% (currently 3.05%)

• 4 Year GIC - 2.90% (currently 3.15%)
• 5 Year GIC - 3.00% (currently 3.25%)
All other Oaken rates will remain unchanged. "

July 26, 2017
12:58 pm
Nehpets
Ontario
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Whew!!! Got one in just in the nick of time before the rate drop!

Stephen

July 30, 2017
1:43 pm
Doug
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Nehpets said
Whew!!! Got one in just in the nick of time before the rate drop!

Stephen  

I note that they're effective August 3rd, so there's still time, presumably, to book a GIC at current rates and, if a new account opening is needed, I'm betting they'd be willing to extend the offer to you to the date on which your account opening is approved. 😉

Cheers,
Doug

July 30, 2017
6:54 pm
Loonie
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My experience is that they will not extend the date for non-registered funds.
They will extend it for TFSAs and RSPs, I think about a month.

July 31, 2017
7:47 am
Nehpets
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Home Bank GIC rate as of this morning is 2.3% (agent)

As has been posted, Oaken is scheduled to decrease rates Aug 3, but the new rate is not known at this time.

That might put Parama Credit Union and Resurrection Credit Union, both in Toronto, at or close to the lead at 2.4% (for new deposits only)

Stephen

June 19, 2021
10:59 am
COIN
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I think I heard on the radio that Home has re-opened their store. So, you can deal with real humans again. Can we assume that Home/Oaken is safe again?

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