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Email this12:11 pm
April 27, 2017
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Hello, a member wrote in another thread that all GICs can be redeemed, although a penalty may be payable. Unfortunately, it does not appear that this is an option with Oaken (Home Trust/Home Bank) GICs, unless they are cashable GICs, or unless the Canadian-resident GIC sole owner has died, and even then, only at the option of Oaken. Can someone let me know if this is not correct? Obviously, this is something Oaken GIC depositors over the CDIC limit are thinking about currently. Thank you.
12:26 pm
December 17, 2016
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I personally redeemed a non-cashable GIC at CIBC in 2015 - the penalty was I only received the Principal and NO accumulated interest.
These are obviously trying times at HCG and Oaken so they will undoubtedly be playing tough with their investors.
12:30 pm
September 5, 2013
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Why not talk directly to Oaken Financial? If you don't mind the interest loss, I believe it is doable.
2:13 pm
April 6, 2013
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topgoat said
Hello, a member wrote in another thread that all GICs can be redeemed, although a penalty may be payable.
Not true.
It also cannot be true that all GIC are redeemable early. The financial institution may have lent that money from a five-year GIC out as a five-year mortgage. The financial institution cannot ask the mortgage borrower cough up the full balance of the mortgage now, before the end of the agreed five-year term of the mortgage.
Unfortunately, it does not appear that this is an option with Oaken (Home Trust/Home Bank) GICs, unless they are cashable GICs, or unless the Canadian-resident GIC sole owner has died, and even then, only at the option of Oaken. Can someone let me know if this is not correct? …
Paragraph 35 of Oaken's Terms and Conditions for Personal savings and GIC non-registered investments explains the early redemption and possible redemption on death of its GIC's:
35. REDEMPTION PRIOR TO MATURITY DATE
A Non-Redeemable Guaranteed Investment Certificate (GIC) is not redeemable prior to the maturity date.
A Cashable GIC is fully or partially redeemable (minimum $1000 redemption request accepted and $1000 must be maintained in the Investment) prior to the Maturity Date only after the redemption eligibility period indicated on the Investment application form has been met.
A Non-Redeemable Short Term GIC is not redeemable prior to the maturity date.
… Notwithstanding the above, redemption prior to maturity may be permitted by us without penalty in the event of the death of a sole Owner who was a Canadian Resident within the meaning of the Income Tax Act (Canada) at the time of death, or was a non-resident of Canada at the time of death, if the original term of the Investment was for less than five (5) years. The Investment and Proceeds of the Investment are only redeemable to the extent permitted in this paragraph 35.
2:33 pm
December 17, 2016
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Norman1 said
It also cannot be true that all GIC are redeemable early. The financial institution may have lent that money from a five-year GIC out as a five-year mortgage. The financial institution cannot ask the mortgage borrower cough up the full balance of the mortgage now, before the end of the agreed five-year term of the mortgage.
That premise conflicts with Outlook Financial's GIC offerings
OUTLOOK CASHABLE GICS?
In addition to the guaranteed interest rates of GICs, Outlook GICs offer these other advantages.
Unlike many other financial institutions, Outlook GICs are guaranteed without limit for 100% of the deposit and interest, so your investments are worry-free.
Choose from 1 to 5 year GICs with Outlook’s great rates – higher than most conventional financial institutions.
You can withdraw from your GIC at any time, so you’re secure in knowing you have the money if you really need it. The minimum withdrawal amount is $1000. You must maintain a minimum balance of $1000, or you have the option to cash your entire GIC at the early withdrawal rate. Withdrawals from Cashable GICs made prior to the maturity date will earn the early-withdrawal interest rate on the funds withdrawn, calculated back to the date of deposit. The remainder of the GIC will continue to earn its regular rate of interest.
2:45 pm
April 6, 2013
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No, it doesn't.
Outlook Financial's terms on their cashable GIC's are not the terms for Oaken's GIC's.
4:33 pm
December 17, 2016
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You presented a generic premise in your opening paragraph, now you're backing away.
4:33 pm
April 7, 2017
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Top It Up said
Norman1 said
It also cannot be true that all GIC are redeemable early. The financial institution may have lent that money from a five-year GIC out as a five-year mortgage. The financial institution cannot ask the mortgage borrower cough up the full balance of the mortgage now, before the end of the agreed five-year term of the mortgage.
That premise conflicts with Outlook Financial's GIC offerings
OUTLOOK CASHABLE GICS?
In addition to the guaranteed interest rates of GICs, Outlook GICs offer these other advantages.
Unlike many other financial institutions, Outlook GICs are guaranteed without limit for 100% of the deposit and interest, so your investments are worry-free.
Choose from 1 to 5 year GICs with Outlook’s great rates – higher than most conventional financial institutions.
You can withdraw from your GIC at any time, so you’re secure in knowing you have the money if you really need it. The minimum withdrawal amount is $1000. You must maintain a minimum balance of $1000, or you have the option to cash your entire GIC at the early withdrawal rate. Withdrawals from Cashable GICs made prior to the maturity date will earn the early-withdrawal interest rate on the funds withdrawn, calculated back to the date of deposit. The remainder of the GIC will continue to earn its regular rate of interest.
BUT keep in mind the Outlook Financial penalty...
Date of GIC Purchase
Prior to February 15, 2010 - Early-Withdrawal Interest Rate 2%
February 15, 2010 - Present - Early-Withdrawal Interest Rate 1%
4:42 pm
December 17, 2016
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OF course there's going to be penalties.
That was covered off in the quote I posted from Outlook. Remember, ALL Outlook GICs are cashable.
For the record the 1% is better than the ZIP interest you'd get from cashing Hubert's 1-year GIC outside of the quarterly terms.
AND better than only getting the principal back on the early redeeming of my CIBC GIC.
5:50 pm
April 7, 2017
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How do you figure zip from Hubert one year cashable???
They say:
Again, you can choose to redeem your 1 year term at any time. If you do, all interest that has been paid to you is yours to keep, but if you redeem between a quarter you will not receive any interest from that quarter. For example, if you redeem after seven months, you’ll only receive interest up to month six!
So I only read ZIP ($0.00 interest) if you cashed it in, before the the first quarter was reached.
6:02 pm
December 17, 2016
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Exactly what I said
"...better than the ZIP interest you'd get from cashing Hubert's 1-year GIC outside of the quarterly terms."
6:15 pm
April 27, 2017
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Thanks for the comments. Based on paragraph 35 of Oaken's Terms and Conditions for Personal savings and GIC non-registered investments, it does not appear that Oaken ordinarily allows for early redemption of non-redeemable GICs, and as someone pointed out, I would suspect this is especially true with recent events as they are. Does anyone think it is even worth asking?
6:17 pm
February 24, 2015
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OP, I'm not sure of your question or concern. A GIC, by definition, is meant to be held until maturity and is a type of contract between the depositor and the financial institution. Both parties know the payout at maturity. There is always a risk that the financial institution will go under, but that's why there is CDIC insurance, to protect the investor. But if the investor has deposited more than the CDIC limit, perhaps to take advantage of a rate higher than the competition, why should the investor be entitled to cash in the GIC because of events and news that may or may not affect the ability of the financial institution to meet its obligations?
However, death of the sole owner is a special circumstance. The estate must be settled, accountants, lawyers and CRA must be paid, so the sooner the better. To tie up the estate for the term of the GIC, maybe 5 years, is unreasonable. That is why the financial institution will allow the GIC to be redeemed, maybe not with the interest rate that would be paid if held to maturity, but with a payout sufficient to keep everyone reasonably happy. Otherwise, why would anyone invest in a GIC if s/he and the estate were extremely punished for dying before maturity of the GIC?
6:46 pm
October 11, 2015
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Just looking at my Oaken Financial Gic's: The application does not detail whether or not the instrument is cashable prior to maturity.
If the fine print does not specify cashability, do I have any hope of cashing out? If they TELL me that they are not cashable, do I ask to see this in writing???
I am below the CDIC limit, but extremely uncomfortable hanging in there.....
6:52 pm
April 6, 2013
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topgoat said
Thanks for the comments. Based on paragraph 35 of Oaken's Terms and Conditions for Personal savings and GIC non-registered investments, it does not appear that Oaken ordinarily allows for early redemption of non-redeemable GICs, and as someone pointed out, I would suspect this is especially true with recent events as they are. Does anyone think it is even worth asking?
Yes, it is worth asking, topgoat. Not about early redemption. Let them know you understand the early redemption terms and that you have not died. 
Ask whether or not you and they can negotiate a deal.
I'm sure they will accept an offer from you to take back their GIC for 50% of its value. 
But, I don't think you would want to take that kind of a haircut.
If you are four years into a five-year compounding 2% GIC, then the GIC will be worth about 108.24% of its face value. Surrendering for just the principal without the interest would be selling for about 92.3% of its value. A 7.7% haircut may or may not be enough. You and Home Trust/Home Bank will have to negotiate that.
Home Trust and Home Bank also do lending. If you just need the money early, I'm sure Home Trust/Home Bank will accept their own GIC's as collateral for a loan.
That's how one couple I knew got their money from their non-cashable big bank GIC's one year early. They went to the issuing bank and got a loan that was secured with the GIC's. Loan was then repaid by the GIC when it matured later in the year.
Effectively, they got negative interest for the final year of the GIC. But, that was the price that needed to be paid for getting access to the funds one year early.
7:00 pm
April 6, 2013
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dentgal said
Just looking at my Oaken Financial Gic's: The application does not detail whether or not the instrument is cashable prior to maturity.
If the fine print does not specify cashability, do I have any hope of cashing out? If they TELL me that they are not cashable, do I ask to see this in writing???
I am below the CDIC limit, but extremely uncomfortable hanging in there.....
On your application form, is there sign of the adjective "non-redeemable"? They may use that word instead of "non-cashable".
8:19 pm
October 27, 2013
Online
I can't imagine why any FI would permit early termination of non-redeemable/non-cashable GICs. They look to the fixed terms to support their mortgage book. It is especially so when the odds of maturing GIC renewals may be much less than traditionally so given the current situation.
I also fail to see why anyone is concerned with their GICs if they have stayed under the $100k threshold. It just is not a big deal.
8:41 pm
April 6, 2013
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AltaRed said
…
I also fail to see why anyone is concerned with their GICs if they have stayed under the $100k threshold. It just is not a big deal.
I agree.
But, some people may feel risk even when the facts indicate there is none.
Sort of like feeling that there is a boogeyman in the closet when visual inspections, motion sensors, and infrared cameras show there is nothing there.
It is a challenge with investing. One has to be able to sleep well with one's decisions.
10:36 pm
October 21, 2013
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FWIW, I don't think Oaken is very flexible on terms. I asked them once about RIFs. My question was whether one could adjust the withdrawal amount during the term of an RIF GIC. In other words, let's say you had opted for the minimum withdrawal and later found you needed more regular income. The answer was vague and not encouraging. However, they didn't say it was completely impossible.
This is not quite the same as cashing it in, but is the equivalent of cashing in a small portion every month.
It actually made me think that GICs may not be the best thing for RIFs.
6:03 am
December 17, 2016
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AltaRed said
I also fail to see why anyone is concerned with their GICs if they have stayed under the $100k threshold. It just is not a big deal.
As I said on another thread "Everyone's angst level is different." And it probably never helps in lowering that angst level when you come across articles like this, in the Globe & Mail -
"The Deposit Guarantee Corp. of Manitoba (DGCM) exceeds CDIC by providing unlimited protection of deposits at credit unions and their online banking divisions. But because DGCM is not part of the Manitoba government, the strength of the protection it offers is not quite at the level of the federally backed CDIC. Note that your deposits in Manitoba credit unions are protected regardless of what province you live in."
"When selling GICs from Manitoba-based credit unions, deposit broker GIC Wealth Management takes special steps to ensure clients understand their deposit insurance. “We have them acknowledge and sign a waiver that it isn’t government-insured,” said Brandon Brot, a partner at the firm."
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hmmmm ... "the strength of the protection it offers is not quite at the level of the federally backed CDIC" ... too bad the article never expanded on what they meant by that ... is it just simply the lack of government-backing or are there other concerns?
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