GICs get you nothing more than 'Chicken Feed'.

Sad, but True

Dean

Alexandra said
Just got e-mail from Oaken with their new rates starting tomorrow:

1 yr: 3.35% from 3.5%
18Mo: 3.45% from 3.6%
2 yr: 3.65% from 3.85%
3 yr: 3.7% from 3.85%
4 yr: 3.75% from 3.9%
5 yr: 4.0% from 4.05%  

Oaken used to have better rates than others - not so now. With inflation ranging between 3.5% and 4%, these are not good investments, particularly when one factors in income tax paid on the interest. I imagine interest rates are going to stay low/lower in Canada this year due to our economic situation.

1 yr: 3.35% from 3.5%
18Mo: 3.45% from 3.6%
2 yr: 3.65% from 3.85%
3 yr: 3.7% from 3.85%
4 yr: 3.75% from 3.9%
5 yr: 4.0% from 4.05%

RetirEd said
… For term GICs, it's not on an accrual basis but based on crediting dates. Any amount credited or paid in this year will be on NEXT year's T5. Amounts paid or credited last year should have appeared on THIS year's T5.
…

That's correct. For any investment that pays interest annually or more frequently, one reports the interest as it is actually paid. Compounding is reinvesting the paid interest.

Simplii GIC's pay or compound interest monthly. So, one reports their interest like the interest from a savings account that pays interest monthly.

Personal taxpayers don't report accrued, unpaid interest to December 31 for such investments.

If one has, say, a five-year GIC with interest credited or paid out on the same day every year, the first year's interest will be reported on the second year's T5. The second year will be reported for the third year, and so on.

For savings accounts, interest is paid as one goes, and is recorded through the year, and on a T5 the next year.

RYAN said
How would be T5 slips issued for a 15 months GIC? Do I get one T5 for interest accrued till Dec 31 this year and another T5 for interest accrued in 2027, or just one T5 slip for 15 months?  

I believe the details are available on the CRA website of how T5's are prepared but IIRC, you would get your first T5 for the GIC(s) that have been invested for 12 months as at 31DEC for the calendar year in question. In other words, if it has been less than 12 months when 31DEC2026 comes around, you would not get a T5 until after the end of the NEXT calendar year and this would include interest for all interest paid/accrued life-to-date for the GIC in question to 31DEC2027 of the next calendar year.

RYAN said
I got this offer too. I just reopened an account with Oaken. Is Oaken Digital insured by CDIC?  

Yes, times 2, because both Home Bank and Home Trust (where your money actually goes) are each covered by CDIC.

Every time they have had one of these promos, my next maturity has just missed their time frame, but this time I got lucky 🙂