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It's here Oaken 5% for 5 years
June 24, 2022
3:53 pm
TommyT
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Re: Yes the CSB's were @ 19%, maybe in 1981? I got some then. But when I did, the government set a limit I believe @ around $15K? Can't remember exactly.

It was 19 and a half percent for the first year with a $15,000 limit. I took out some fifty year strip bonds the same year.

June 24, 2022
3:55 pm
cgouimet
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TommyT said
I'm already limit up at Home Bank and Home Trust. I wish they'd raise the insurance limit to $250,000 from $100,000. I hope Oaken can survive without a bailout. Buffett has a small vested interest in Home Capital. EQ Bank would be in the same boat. Fortunately Trudeau is Prime Minister. I think in today's age people won't have to wait long to get reimbursed if their principle and interest combined are $100,000 or less.  

Both Oaken and EQ are "banks". So CDIC @ $100k.

For $250k, go to ON CU's.

For unlimited, go to MB CU's ...

CGO
June 24, 2022
4:07 pm
TommyT
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How high rates will go will depend on country's debt levels. In this era unlike the Volcker era retirees are soon to outnumber workers which means rates will go higher and higher rates may not even make a dint in the inflation rate but debt also comes into play. The trend is still like Japan towards more retirees than workers so higher rates will help more people than its hurts. It all comes down to how high rates will go in America before their housing market drops in my opinion 20 percent. Canada will be a basket case if housing gets there in America even with a technical recession. I think Powell is trying to bring down home prices by twenty percent. People talk about Powell pivoting but from the Volcker era Paul lowered interest rates too soon and inflation came back immediately. I'd be floored if Powell did the same thing.

June 24, 2022
4:11 pm
TommyT
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cgouimet said

Both Oaken and EQ are "banks". So CDIC @ $100k.

For $250k, go to ON CU's.

For unlimited, go to MB CU's ...  

Most of my money is in the Manitoba credit unions. All I know is this time around I'd play it safer with GIC's as the chances of third tier banks failing is real this time especially in Ontario.

June 24, 2022
5:38 pm
Bill
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TommyT, I didn't get your comment, why is it fortunate Trudeau is in power? Did you mean he'd be more apt to bail out smaller banks? Or that he'd get us our CDIC cheques faster than another PM in the case of failure? Or.......?

June 24, 2022
6:46 pm
MattS
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Trudy hands out $$ like it’s water.. that’s why… another 250 million today for food as 500 mil. Was not enough.. when right here at home we are having a hard time with groceries increasing so much.. I’m flabbergasted there is no consequence to running 100 billion dollar deficits.. the ratings agencies that don’t down grade countries out of control shows they are not independent agencies whatsoever

June 25, 2022
4:13 am
cgouimet
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MattS said
Trudy hands out $$ like it’s water.. that’s why… another 250 million today for food as 500 mil. Was not enough.. when right here at home we are having a hard time with groceries increasing so much.. I’m flabbergasted there is no consequence to running 100 billion dollar deficits.. the ratings agencies that don’t down grade countries out of control shows they are not independent agencies whatsoever  

I'm sure Bitcoin Poliver will fix it all for you ...

CGO
June 25, 2022
10:07 am
HermanH
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Nicaragua's bitcoin experiment is going to be an excellent lesson to the world.

June 25, 2022
11:21 am
JenE
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Peter - Oaken is now offering 4.30% for 18 month GIC term.

June 26, 2022
1:45 am
Canuck
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So what do you all think? Pull the trigger or not? 5% is pretty tempting. Or is it better to take the 1 year at 4% / 4.05% (EQ / Oaken)? Or is it better to wait longer and do nothing for now? This would be for RSP GICs which I do not plan on touching, so it's only about maximizing the return.

June 26, 2022
8:43 am
Peter
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JenE said
Peter - Oaken is now offering 4.30% for 18 month GIC term.  

Thanks; updated!

June 26, 2022
12:47 pm
Loonie
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Canuck said
So what do you all think? Pull the trigger or not? 5% is pretty tempting. Or is it better to take the 1 year at 4% / 4.05% (EQ / Oaken)? Or is it better to wait longer and do nothing for now? This would be for RSP GICs which I do not plan on touching, so it's only about maximizing the return.  

To get the best answer, probably need to look at how much money you have in total RSP as well as how much you are currently needing to place.

June 26, 2022
1:20 pm
Canuck
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Loonie said

To get the best answer, probably need to look at how much money you have in total RSP as well as how much you are currently needing to place.  

Thanks for the response.

I have about $58,000 currently sitting in an RSP savings account, another $11,000 or so that I still have to make as a new RSP contribution for this year, and I have about $25,000 already locked into RSP GICs (all amounts rounded to the nearest thousand). So that's about $69,000 ($58,000 + $11,000) to put into new GICs of a total of $94,000 ($69,000 + $25,000). I'm trying to figure out when, where and for what term length to buy RSP GICs for the $69,000. The only goal is maximizing return; I don't anticipate needing to make a withdrawl anytime soon.

June 26, 2022
5:07 pm
pwr1019
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cgouimet said

Both Oaken and EQ are "banks". So CDIC @ $100k.

For $250k, go to ON CU's.

For unlimited, go to MB CU's ...  

Oaken is $200K CDIC split $100K at Home Trust and $100K at Home Bank

June 26, 2022
5:31 pm
semi-retired
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pwr1019 said

Oaken is $200K CDIC split $100K at Home Trust and $100K at Home Bank  

Don't forget the 100K includes the interest.

June 26, 2022
5:57 pm
cgouimet
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pwr1019 said

Oaken is $200K CDIC split $100K at Home Trust and $100K at Home Bank  

Yes. Good correction...

CGO
June 27, 2022
1:56 am
RetirEd
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Dang... I have a big chunk of TFSA GIC recently matured (at 3.2%, which did very well over the low-rate era) and I could move it to Oaken any day for the 5-year 5%... how long should I wait for rates to float up on the 5-year, which has a high likelihood of being an advantageous rate for much of that time, especially if there's a recession in the term?

My feeling is to wait for the next round of BoC settings on the 13th. But my non-registered GIC matures after August 1st, and I'll need some of that for liquidity.

I'd still be under CDIC split limits at Oaken, though I'll have to be on the ball in five years to move the cash out at maturity, as they have no TFSA saving accounts. And will they impose massive withdrawal penalties in the next five years?

RetirEd

Without a crystal ball...
or even a Magic 8-Ball...

RetirEd

June 27, 2022
3:55 am
cgouimet
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RetirEd said
Dang... I have a big chunk of TFSA GIC recently matured (at 3.2%, which did very well over the low-rate era) and I could move it to Oaken any day for the 5-year 5%... how long should I wait for rates to float up on the 5-year, which has a high likelihood of being an advantageous rate for much of that time, especially if there's a recession in the term?

My feeling is to wait for the next round of BoC settings on the 13th. But my non-registered GIC matures after August 1st, and I'll need some of that for liquidity.

I'd still be under CDIC split limits at Oaken, though I'll have to be on the ball in five years to move the cash out at maturity, as they have no TFSA saving accounts. And will they impose massive withdrawal penalties in the next five years?

RetirEd

Without a crystal ball...
or even a Magic 8-Ball...  

EQ likely matching soon ...

Likely even better on or after Jul 13 ...

CGO
June 27, 2022
9:38 am
toto
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I had a five year at 3.5 just mature at Home Bank , but I moved it into tangerine account with a 2.6 offer to wait for July 13th rate hike, and then I plan on moving it back to Oaken in the expectation that the 5 year rate will go up.

June 27, 2022
10:22 am
Loonie
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Canuck said

Thanks for the response.

I have about $58,000 currently sitting in an RSP savings account, another $11,000 or so that I still have to make as a new RSP contribution for this year, and I have about $25,000 already locked into RSP GICs (all amounts rounded to the nearest thousand). So that's about $69,000 ($58,000 + $11,000) to put into new GICs of a total of $94,000 ($69,000 + $25,000). I'm trying to figure out when, where and for what term length to buy RSP GICs for the $69,000. The only goal is maximizing return; I don't anticipate needing to make a withdrawal anytime soon.  

Thanks for the response.

I guess you have 3 options, then.

1. Lock it all in at 5%
2. Spread it out. Buy four GICs, for varying lengths, omitting the maturity year you already have in place. This will create a GIC ladder. When the one that is due next year matures, you buy a five year one with it plus your new contribution for 2023; the following years, you do the same, so that after a few years they are all in five year GICs which is usually where best rates are.
3. Wait for higher rates and proceed with either 1. or 2.

Nobody knows where rates are going next year. They tell us they will settle down, and maybe they will, but I don't know. I am inclined to think higher rates will last longer than anticipated, just as so-called "temporary" inflation has gone well beyond that. Those in authority always tend to want us to think crises are temporary, but we have to determine whether that is likely.

If I were in your position, I would try to look beyond the returns over the next five years, as this is a longer term investment. I would go for the ladder because it gives me options to adjust as the years go buy, averaging out my rate. You will never get the best rate at all times. But, yes, it could turn out that you'd have been better off putting it all in five year GICs this year. What you hope for is a good average over time.

If you decide to go ahead and buy five year GIC this year, I would wait a bit longer. There is at this point every reason to assume the rate will improve.

One thing you can do right now, regardless, is narrow your list of FIs. Identify the ones that will be willing to hold their rate until your transfer goes through. You don't want to find yourself trying to grab a 6% rate only to find that by the time your funds arrive they will only give you 5.5 or whatever because rates have gone down. Find the FIs that will hold the rate for you, and focus on them. I'm sorry, but I don't have that information right now. I think most FIs will cooperate on this but I wouldn't assume it.

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