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Oaken Rate Hike June 06, 2017
June 6, 2017
9:50 am
Nehpets
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Email received today:

Long-term GICs
1 Year GIC – 2.75% (previously 2.60%)
18 Month GIC – 2.85% (previously 2.70%)
2 Year GIC – 2.95% (previously 2.80%)
3 Year GIC – 3.05% (previously 2.90%)
4 Year GIC – 3.15% (previously 3.00%)
5 Year GIC – 3.25% (previously 3.10%)

Short-term GICs
180-269 Days – 2.30% (previously 2.20%)
270-365 Days – 2.40% (previously 2.20%)

June 6, 2017
11:30 am
Brimleychen
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Be happy. That shows how market works. Our savers have been punished by Bank of Canada for too long. From the first day of the HCG drama starts, we believed that we should be rewarded. I will expect more to come especially in November / December.

June 6, 2017
11:51 am
oldnavy
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Is it the good time to open a GIC with them or wait for another round of rate raising?

June 6, 2017
12:13 pm
ValueTime
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(... continued from a similar Oaken topic)
I sent request to Oaken support asking to have $100K of GIC designated as "joint" in order to be covered under CDIC limits. It appears this could take as long as 5 weeks.
I asked for a similar request through Hubert and it took under 48 hours.
So when the later is complete I'll look at upping my GIC exposure with Oaken.

June 6, 2017
12:24 pm
Top It Up
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oldnavy said
Is it the good time to open a GIC with them or wait for another round of rate raising?  

Well, yesterday's press release from Home Capital showed the company continuing to bleed GIC cash which is probably why we've seen another hike in their rates.

NO ONE knows where their GIC rates are headed?

So, depending on the amount you have to invest, and where YOU think the rates might be headed, you could hedge yourself and ladder-in ... some now, some later ... although for me, that 3.25% for a 5-year GIC, is looking pretty tasty.

June 6, 2017
12:32 pm
2of3aintbad
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To me, the most interesting term would be for an 18 month GIC for a TFSA. If you bought before June 30, it would mature in December 2018, so you could still withdraw and have that amount available to reinvest in January 2019.

Not that I think you should fill your TFSA with fixed income, and especially not 5 year GICs, but this 18 month GIC might fit in.

June 6, 2017
2:24 pm
Loonie
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I would take it now if you're interested. Who knows if they will raise rates again, or, more importantly, whether they will still exist to be offering better rates later? They need people to invest now in order to be here tomorrow.
If there's a better rate later, perhaps you'll want to take advantage of that also.

I have already reached my personal comfort limit for exposure to any single FI with Oaken, but would definitely invest if I hadn't.

June 6, 2017
4:00 pm
One-up
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IMHO... Still too low. I think they could do better considering what they are paying on interest for loans now and the risk. Especially on their regular high interest savings rate which I think they should have at 3% to compete with others like Eq and special savings promos from Tangerine. If Oaken/Home Trust did this for a good solid year without having us locking into a GIC, you would see a lot of their savings deposit issues go away. They would still make a razor thin profit on their alternative mortgages (just check Cannex.com). Point is, they would be making a profit again versus big losses due to the loans. I know I would go there if this was the case and was able to transfer money in and out electronically. They need to look at their market better and adjust to the reality.

June 8, 2017
6:02 pm
Save2Retire@55
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I was about to get on this for my wife with new deposits but 2 things are holding me back:

1. The only method of transfer is by Cheque (Unless the transfer is from another registered account)

2. The interest is calculated and paid annually. Of course not monthly!!

June 8, 2017
6:29 pm
Top It Up
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Save2Retire@55 said
I was about to get on this for my wife with new deposits but 2 things are holding me back:

1. The only method of transfer is by Cheque (Unless the transfer is from another registered account)

2. The interest is calculated and paid annually. Of course not monthly!!  

On point #2 - here's their current rates - interest paid Annual Compound or Annual Pay, or Semi-Annual, or Monthly

https://www.oaken.com/gic-rates/?elqTrackId=3d3c9731447743fb9e54859aa2bddac8&elqaid=348&elqat=2

June 8, 2017
7:46 pm
Loonie
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One-up said
IMHO... Still too low. I think they could do better considering what they are paying on interest for loans now and the risk. Especially on their regular high interest savings rate which I think they should have at 3% to compete with others like Eq and special savings promos from Tangerine. If Oaken/Home Trust did this for a good solid year without having us locking into a GIC, you would see a lot of their savings deposit issues go away. They would still make a razor thin profit on their alternative mortgages (just check Cannex.com). Point is, they would be making a profit again versus big losses due to the loans. I know I would go there if this was the case and was able to transfer money in and out electronically. They need to look at their market better and adjust to the reality.  

It would be good for US but not good for them. This is what started the ball rolling down the hill in the first place, when megabucks started being withdrawn from savings accounts in a hurry. They need and want longer commitments, and it is those that will fund mortgages and a more enduring business.

That said, I think they should be offering 2% on savings. It would be enough to keep me there if I had a savings account with them, which I don't; but 1.75 is not. I have never had a savings account with them because they have never paid the best rate for it. It's not what they're most interested in. Some of us have been after them for ages to offer a savings account option for TFSA and RRSP, but they have refused. And if they recover from the current fiasco, it will surely be even longer in coming.

June 8, 2017
7:54 pm
Loonie
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Top It Up said

On point #2 - here's their current rates - interest paid Annual Compound or Annual Pay, or Semi-Annual, or Monthly

https://www.oaken.com/gic-rates/?elqTrackId=3d3c9731447743fb9e54859aa2bddac8&elqaid=348&elqat=2  

I'm not sure why the issuing of a cheque would be such a concern to you unless you don't have a chequing account. You need one to open almost any non-registered account at one of these alternative banks, probably all of them. I don't see it as a big inconvenience, considering the interest rate, and wouldn't consider it an issue personally at all.

June 9, 2017
7:30 am
Typhoon
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When I send money to Oaken I simply arrange an online transfer from my "bricks and mortar" bank. It's simple (you can set up the process on the Oaken website, and after that it's simply a few clicks of the mouse and you're done).

June 9, 2017
7:57 am
Miron
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I just spoke with them and there is the need of a mailed cheque once only to connect them with your other FI... and this process is the same for any virtual bank... the only kind of exception was EQ Bank who let you use their app to upload a cheque so you can set up your account instantly. So electronic transfers are there sf-smile

June 9, 2017
2:57 pm
Save2Retire@55
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Top It Up said

On point #2 - here's their current rates - interest paid Annual Compound or Annual Pay, or Semi-Annual, or Monthly

https://www.oaken.com/gic-rates/?elqTrackId=3d3c9731447743fb9e54859aa2bddac8&elqaid=348&elqat=2  

Yes. But I was talking about TFSA. The only option is Annual compound or pay.

June 10, 2017
12:03 am
Loonie
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That's true. They only offer monthly pay for non-registered GICs.
I don't know why this is so, but, since they are desperate for deposits, perhaps you can negotiate for what you need. No harm in asking.

June 10, 2017
10:10 pm
Norman1
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Loonie said

That said, I think they should be offering 2% on savings. It would be enough to keep me there if I had a savings account with them, which I don't; but 1.75 is not. I have never had a savings account with them because they have never paid the best rate for it. …

I did notice that Oaken increased the rate on their 30-day short-term GIC's to 2%:

Term (Days) 30‐59 60‐89 90‐119 120‐179 180‐269 270‐364 Min. dep.
Paid at maturity 2.00 2.00 2.10 2.15 2.30 2.40 $1,000

Looks like Oaken would like a 30-day commitment for that extra ¼% to 2%.

June 15, 2017
6:15 pm
Save2Retire@55
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Loonie said
That's true. They only offer monthly pay for non-registered GICs.
I don't know why this is so, but, since they are desperate for deposits, perhaps you can negotiate for what you need. No harm in asking.  

Good point. Will call them tomorrow and see what they say. Thanks

June 19, 2017
1:46 pm
Doug
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Norman1 said

Loonie said

That said, I think they should be offering 2% on savings. It would be enough to keep me there if I had a savings account with them, which I don't; but 1.75 is not. I have never had a savings account with them because they have never paid the best rate for it. …

I did notice that Oaken increased the rate on their 30-day short-term GIC's to 2%:

Term (Days) 30‐59 60‐89 90‐119 120‐179 180‐269 270‐364 Min. dep.
Paid at maturity 2.00 2.00 2.10 2.15 2.30 2.40 $1,000

Looks like Oaken would like a 30-day commitment for that extra ¼% to 2%.  

Agreed - this is a good strategy - increasing both the rates at the shorter end of the GIC curve as well as longer term GIC rates, before HISA rates get raised. With a 30 day GIC, they can better forecast withdrawals with those that either auto-renew for another 30 days and those that do not.

I like they've got the rates reasonably high enough on the shorter end - now they need to raise the 4- and 5- year GIC rates and also match the Home Trust deposit broker GIC rates with that of Oaken Financial.

Financially, I think they've got to be considering a company rebranding as Oaken Trust Company and Oaken Bank, to remove the bad "stigma" of the Home branding. Also, a reorganization of HCG would also be welcome whereby HCG is amalgamated with either Home Trust or Home Bank such that the Schedule I chartered bank or trust company becomes the publicly-traded "parent" and the other bank or trust company becomes a subsidiary. 🙂

Having public shareholders simply own a holding company creates additional "holding company risk". 🙂

They're making all the right moves so far, though!

Cheers,
Doug

June 19, 2017
1:55 pm
AltaRed
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Home Trust GIC rates really can't be the same as Oaken GIC rates due to the commission/trailer paid to the brokers. A broker channel always extracts something and HCG cannot give up the broker channel since that is where the major business is.

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