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Oaken Continues To Slowly Raise Its Rates
February 5, 2022
1:14 pm
Bill
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It appears Home gets it's not good strategy to centre your business plan around catering to the 100 or so Canadians that will "walk" their money at a moment's notice to wherever they can get another .05% interest. Even I can think of a bunch of better business plans than that!

February 5, 2022
2:25 pm
Loonie
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It's not about walking your money because you didn't get another .05% interest. It's about having a savings account and keeping it there for any number of reasons. Every other FI I can think of manages to do this, if they offer registered accounts, and it doesn't seem to mess up their business plans.

February 5, 2022
6:02 pm
Bill
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Registered products are designed for sort of long-term, not frequent ins and outs, so why offer registered savings account? Especially when everybody else already does. And especially in an environment where people move money in a heartbeat if they get a slightly better yield anywhere else, you hear it on here all the time. Registered GIC accounts force them to be locked in for at least a while, and you send the short-term rate-chasers to all the other fi's, let 'em have 'em, and thereby save admin costs of managing registered savings accounts (which helps allow them to offer higher rates than other fi's - and no-one complains about that difference from other fi's!). So I kinda get their niche strategy in this regard.

February 5, 2022
7:39 pm
Loonie
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Well, the reason to do what the others are doing would be in order to be competitive and hang on to those deposits. They are not the only FI on the block with decent rates. At the moment they don't feel they need to be competitive. Maybe they don't need any more money yet. Maybe they are just being shortsighted. We don't really know their strategy.

As I said above, there are many reasons for needing to move the money to savings, not just so that you can get a GIC somewhere else.

I was waiting to consolidate 3 TFSA GICs maturing within a few months, but couldn't do that at Oaken because of their obstinate refusal to offer a registered savings account. Their short-sighted policy forced me to move it all to Hubert. Once it all gets there, I will wait a bit to see if rates improve and Oaken will have lost its priority. There is a possibility that I (or someone in the same situation) might move it all back to Oaken, which is far more nuisance for Oaken (and the customer) than just allowing them to leave it there in savings.
Some might feel that Oaken and others will offer better rates later this year so want to keep it there in savings so they can put it in an Oaken GIC later because they like dealing with Oaken. No can do. When you lose a customer's money because of poor policies, it's much harder to get it back than if you let them keep it there. I think most people will put up with a slightly lower rate in order to avoid the inconvenience of moving a registered account.

Given the number of people who are interested in and utilize the "December manoeuvre" and who say their TFSAs are in cash, it doesn't seem that they all agree that TFSAs are necessarily for longer term investments. People will use them however they want. Some will be putting aside money each month in order to buy a GIC later. They are doing exactly what they are supposed to be doing with this account - saving. No can do at Oaken. When those people get their money saved up, where will they buy their GIC? They will look first at the FI where they have their TFSA savings account.

As the marketing profs all try to drum into their students, it's a heck of a lot easier to keep a client than to get and keep a new one. All you have to do is meet their needs and do it well.

I don't care what they do. It is a nuisance to move out my GICs, but all but one will be gone by mid-summer.
It's not that I dislike Oaken rates. I will likely continue to have some non-registered GICs there although others may not be as willing. They seem to be able to manage non-registered savings accounts, where the risk of transfer out is even greater.

I could offer more reasons, but what's the point?

February 6, 2022
6:38 am
Bill
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Yeah, maybe, obviously Home disagrees, at least up to now.

I'm not surprised there's at least one small fi out there that can't be bothered catering to the very few who are prone to regularly move registered funds among various fi's, and indeed seems even to discourage this "frequent flyers" business - but good luck, you never know!

February 6, 2022
9:30 am
TommyT
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Dean said

That , + I'm also presently a fan of Hubert's cashable 1 Yr GIC @ 2.00%.

Can't wait to see what the GIC rates will look like, 12-14 months from now. Then it will most likely be time to go 'Long' again.

    Dean

  

To me it sure looks like hyperinflation will grip America starting in 2023 and beyond once the midterm elections are over. Fudging inflation figures leading up to the midterms in America this November is what I would expect (to the downside of course) but to me hyperinflation looks certain starting in 2023. I wish they would increase the CDIC deposit insurance from $100,000 to $250,000.

February 6, 2022
9:41 am
COIN
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TommyT said
I wish they would increase the CDIC deposit insurance from $100,000 to $250,000.  

Apparently, the big banks don't want to pay the extra premium.

February 6, 2022
10:23 am
lifeonanisland
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Reading this thread with interest. Currently have TFSAs and RSPs taking advantage of Tangerine special rates in registered HISAs, and other TFSAs and RSPs sitting in 1.25% registered accounts at EQ after taking advantage of their special 90 day rate. Oaken is one of my future options as I try to stay nimble in this climate of rising interest rates (for example, considering the one year 2.15%). But that Oaken DOES NOT have registered HISAs is a complete surprise to me. How does that even work? What do they actually do with the funds when a registered GIC matures?

February 6, 2022
10:41 am
Loonie
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At one point I was told by Oaken that if you don't send them instructions they will just roll over a registered GIC for another term.
They were willing, reluctantly, to hold on to the money for a few days at no interest in a kind of financial limbo awaiting your instructions.

February 6, 2022
10:41 am
lifeonanisland
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But what happens if you do send them instructions to NOT roll over? Where do they put your funds?

February 6, 2022
10:44 am
Loonie
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That instruction, to do nothing, is not an option with them as far as I could tell. The default is a rollover. It's possible this is made clear when you invest. I haven't checked.

February 6, 2022
10:46 am
savemoresaveoften
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lifeonanisland said
But what happens if you do send them instructions to NOT roll over? Where do they put your funds?  

on their website, u can clearly choose whether u want principal and/or interest roll into a new GICs, transfer out to a linked FIs, or move to the savings account if u choose.
Its all done online, and do not need a real person to do it for you. And you can change ur instruction as often as u want !
I just did that 2 weeks ago so pretty sure their process has not changed for the worse yet I hope 🙂

btw I am talking Home Bank and Home Trust, which is Oaken's GIC issuer names

February 6, 2022
10:50 am
Loonie
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savemoresaveoften said

on their website, u can clearly choose whether u want principal and/or interest roll into a new GICs, transfer out to a linked FIs, or move to the savings account if u choose.
Its all done online, and do not need a real person to do it for you. And you can change ur instruction as often as u want !
I just did that 2 weeks ago so pretty sure their process has not changed for the worse yet I hope 🙂

btw I am talking Home Bank and Home Trust, which is Oaken's GIC issuer names  

This only applies to non-registered funds. I believe the question was about registered ones where there is no savings account available.

February 6, 2022
10:58 am
lifeonanisland
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Loonie is correct...registered accounts only. If you don't want to roll over, and don't immediately transfer out, where do they put your money? Deregistering is not an option!

February 6, 2022
11:08 am
Loonie
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lifeonanisland said
Loonie is correct...registered accounts only. If you don't want to roll over, and don't immediately transfer out, where do they put your money? Deregistering is not an option!  

As I said, I believe they will roll it over in a week or two. If you want a bettter answer, you should ask them.

February 14, 2022
9:16 am
Dean
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.
"Happy Valentine's Day", from Oaken sf-smile
.

    Please note that effective Monday, February 14, 2022, we will be increasing the interest rate for the long-term GICs as noted below:
    .
    Long-term GICs:
      2 Years GIC – 2.50% (currently 2.40%)
      3 Years GIC – 2.70% (currently 2.60%)
      4 Years GIC – 3.00% (currently 2.65%)
      5 Years GIC – 2.85% (currently 2.75%)

    These new rates will be applied automatically for all corresponding GICs booked on Monday, February 7, 2022 or later. All other Oaken rates will remain unchanged.

Note the new 4 Yr rate ... it's very tempting ❗

    Dean

    sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

    February 14, 2022
    9:34 am
    lifeonanisland
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    You're right. It's really tempting. On the other hand, I can see what's happening all around us. Could we see a 4 percent 4 year GIC by mid-year? I think we've been in this dumpster fire of low interest rates for so long that we start to believe they'll never go up. Patience may be rewarded...and maybe sooner than we realize.

    February 14, 2022
    10:26 am
    Bill
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    It's pretty clear that rates are trending up right now so patience is a virtue right now, to me, in the fixed income portion of a portfolio. Of course, war or another pandemic or some other catastrophic event can change things on a dime so a good time to have cash ready to pull the trigger if rates suddenly look to reverse course again.

    February 14, 2022
    4:07 pm
    Loonie
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    I think that people who use a GIC ladder can afford to wait it out until towards the end of the year if they keep sufficient cash available.
    I don't rule out another catastrophe or two though.
    To hedge your bets, you could spread out your investments throughout the year. Some took advantage of CIBC's 3.25% five year offer earlier this year, perhaps with this in mind. It was a very good offer at the time. You can now get as much as 3.2 through deposit brokers, whose rates are going up frequently.

    March 4, 2022
    6:22 am
    hwyc
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    New rates effective today. 18-month now 2.50%.
    Other terms should be on chart (& chart history) after today's refresh.

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