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It's here Oaken 5% for 5 years
June 27, 2022
1:54 pm
Canuck
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Loonie said
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.  

Thanks for the detailed response. It's very helpful.

I guess that I'll wait a bit longer to see what happens after the next rate hike. Then based on how close the rates are together for the different term lengths and the likelihood of future rate hikes, I'll decide whether to ladder the GICs are only buy 5 years.

July 14, 2022
10:06 am
Wanderer
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Too bad Oaken doesn’t have TFSA. At least I don’t see any. I put my money in Peoples Trust and as GICs mature the interest will cause a need to get another TFSA. Also need to move money in from regular savings each January but there will be no room for it to be CDIC insured.
Hope Oaken starts TFSA sometime soon.

July 14, 2022
10:31 am
MattS
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Oaken will offer you 90 day short term deposits on registered accounts
You could always keep renewing that and add your new money at one of those intervals

July 14, 2022
12:18 pm
Alexandra
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MattS said
Oaken will offer you 90 day short term deposits on registered accounts
You could always keep renewing that and add your new money at one of those intervals  

It looks like Oaken will offer several short term GIC's for registered accounts.
Right now the 30-90 day is at 1.7%. Rates increase at each stepup.

I'm glad you mentioned this as I hadn't noticed it before. Maybe this offering is new? I have RRIFs and TFSA GICs with them.

July 14, 2022
12:22 pm
COIN
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Alexandra said
I have RRIFs and TFSA GICs with them.  

Does Oaken have self-directed RRIF's and LIF's?

July 14, 2022
12:59 pm
MattS
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Alexandra said

It looks like Oaken will offer several short term GIC's for registered accounts.
Right now the 30-90 day is at 1.7%. Rates increase at each stepup.

I'm glad you mentioned this as I hadn't noticed it before. Maybe this offering is new? I have RRIFs and TFSA GICs with them.  

They told me for my rrsp I was only able to get the 90 day as I wanted 30 days just to get past July 13.. but I’m stuck till sept now

July 14, 2022
1:23 pm
phrank
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MattS said

They told me for my rrsp I was only able to get the 90 day as I wanted 30 days just to get past July 13.. but I’m stuck till sept now  

That's not great if you're stuck, but rates should go up again around then as the next BoC announcement is on Sep 7th, I think. Maybe another 75 to 100 basis points is coming.

July 16, 2022
9:25 pm
Lamaison
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It would seem that there's not much doubt that Oaken is anticipating that rates are going to be going up for quite a while yet. They seem to be trying to coax customers into GIC's with comparatively good rates (for now anyway) by keeping their Savings Account rates pretty low as compared to others. EQ doing the same.

July 17, 2022
7:44 am
Laertes
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Anyone think Oaken will raise rates in the next few days, or was this (rather substantial) increase in the prime rate already baked in?

July 17, 2022
8:36 am
BlueSky
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Laertes said
Anyone think Oaken will raise rates in the next few days, or was this (rather substantial) increase in the prime rate already baked in?  

IMHO, perhaps not in the next few days, but rather toward the end of August, in anticipation of the BoC rate announcement. However, anything is possible with our shaky economy, and bad economic conditions. Oaken will periodically up its rates to remain amongst the top FIs. Inflation is here to stay for the foreseeable future, BoC is playing its catching up game, and above all, there's a lot of liquidity out there that needed a home for quite a while.

July 17, 2022
3:28 pm
GR
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Laertes said
Anyone think Oaken will raise rates in the next few days, or was this (rather substantial) increase in the prime rate already baked in?  

Oaken's GIC rates today for 1 to 4 yrs. are further down the list than normally, so I would definitely not be surprised to see increases this week.

July 17, 2022
7:06 pm
MattS
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They would have baked in the consensus 0’75 only not the 1.00.. so FI been slow adjusting to the “surprise” extra 0.25

July 17, 2022
8:06 pm
COIN
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Have mortgage rates gone up yet? Prime has already increased.

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