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15-month GIC at 2.45%
September 30, 2014
2:08 pm
Loonie
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New offer from Peoples, appears to be time-limited, but they are not saying how long.
Unclear whether it applies to registered investments.
http://www.peoplestrust.com/WorryFree/

"This Fall, we’re offering a 15 month GIC at 2.45%. That’s one of the best GIC rates you’ll find in Canada. If you want a secure place to invest your money, with guaranteed returns and a worry free investment, this is the GIC for you.

We can only offer this extraordinary rate for a limited time. Act now.

Other features of this account:
##Online banking access
##Monthly GIC statement available online
##Minimum Deposit for this GIC is $1,000
##Interest is compounded annually."

September 30, 2014
5:06 pm
AltaRed
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Nice but I won't purchase a GIC from anyone that limits maturity options to 'renew for same term'. I hit Cancel when I got to that part. That is pure b*****it.

September 30, 2014
5:23 pm
Loonie
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I haven't tried it yet. Was there not an option to simply cash out by not clicking the box or whatever?

September 30, 2014
5:37 pm
kanaka
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Is there a rating for Trust Companies...where is it...I wold like to see.

September 30, 2014
6:05 pm
AltaRed
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Loonie said

I haven't tried it yet. Was there not an option to simply cash out by not clicking the box or whatever?

No option. It simply said it would be renewed for same term at maturity..... and then to choose Confirm or Cancel. I cancelled.

If I am motivated tomorrow I may phone them and ask WTF?

September 30, 2014
7:00 pm
Jon
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Not that attractive, consider they already offer 2.4% for 1 year.

September 30, 2014
11:30 pm
Loonie
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http://www.peoplestrust.com/hi.....ons/#tc4.2 reads as follows:

"4.3 Non-Registered GIC Specific Terms and Conditions
The supplementary terms contained in this Section 4.3 apply only to Non-Registered GICs.
Interest is compounding on Non-Registered GICs that have initial terms of between 2 and 5 years, but interest does not compound on any other Non-Registered GICs. You may instruct us to transfer any accrued interest out of your Non-Registered GIC, and such accrued interest will not compound on the Non-Registered GIC from and following the transfer.
Non-Registered GICs are transferable with prior notice to PTC.
If we have not received any investment instruction from you by 2:00 pm (Pacific Time) on the maturity date, the principal sum and all of the accrued interest will be re-invested in a new Non-Registered GIC for the same term at the then current interest rate for Non-Registered GICs; provided that if you provide us with an investment instruction within 10 days following the maturity date requesting the withdrawal of all or part of the principal balance of your matured Non-Registered GIC and accrued interest, we will pay the registered holder(s) interest on the amount of the principal that you request to be withdrawn, at the interest rate that was applicable to the matured Non-Registered GIC, for the period between the maturity date and the date that we receive your investment instruction (which period may not exceed 10 days), and we will repay the withdrawn amount and accrued interest to the registered holder as described in the following paragraph.
Upon the maturity date or early redemption date (if permitted), and where we are instructed not to re-invest the principal sum or interest in another of our financial products, the principal sum and accrued interest will be paid to the registered holder(s) by way of electronic fund transfer to the registered holder(s)’s External Account. Funds will only be payable to the registered holder(s) and no other party."

This is part of the Terms and Conditions that you get if you proceed through this page:
http://www.peoplestrust.com/hi.....ounts/gic/
I did not encounter anything about an unavoidable auto renewal, although I think you would have to be pro-active in contacting them. I cancelled my application just before the end, where it asked me to decipher the code, as I was just experimenting.

It's possible that if you go through the promotional link, you get a slightly different process which causes the problem, but I did not try it. It looks the same to me, at least on the first page.
Or maybe it was a programming issue and they fixed it already? I'm fairly sure this was the first day of the offer.

October 2, 2014
2:58 pm
Loonie
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I spoke to Peoples. There is auto-renewal, but you can void that by simply sending an email. I would ask for confirmation back that they have received it.

Auto-renewal, while annoying, is common, in my experience. I have had the same issue at National Bank, TD and B2B, but as long as I remembered to call them in advance, it was not a problem.

Edited to add: also true at Oaken - I just had occasion to read the fine print on the back of my GIC certificate.

October 2, 2014
3:20 pm
AltaRed
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That may be the case but I do not buy from someone that does auto-renewal. I don't want to have a note in file to remind me to call ahead....too busy in my retired life to have those constraints sf-wink That is why I buy all my GICs through my discount brokerage accounts.

There is no real reason why institutions cannot automatically dump matured funds into one's eSavings or Cheuqing accounts in that same institution.

October 2, 2014
5:55 pm
Loonie
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I don't have a brokerage account, nor do I want one right now. I also prefer the better rates I am getting without it and probably wouldn't use it for this anyway, even if I had it. I just put in my electronic calendar a month ahead of time. I don't see why one couldn't advise them of this intention right after purchasing the GIC in the first place, but have never tried.

However, everybody has to decide what works best for them.

October 3, 2014
8:12 am
Bryan Stro
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With regard to this 2.45% rate, Peoples Trust is building up it's cash reserves to prepare itself in event of a housing crash.

October 3, 2014
9:10 am
Bill
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I wouldn't put much money with People's Trust until someone explains to me how they can offer rates much higher than everyone else. For example, their 3% TFSA savings account rate is 50% higher than the next highest, Canadian Direct Financial. I assume most financial institutions are quite savvy in what they invest our savings in, so I wonder what People's is investing in with my money that allows them to be way ahead of the pack. I'm old enough to remember some trust company failures back in the day, and they were the ones consistently offering the highest rates. And the global financial system wasn't a casino in those days.

Also, Brian said, re remembering when GICs come due, "One would need to have an alert system of some type to remind them to send the email before expiry date." The "alert system" I use is a wall calendar (one of the free ones you get this time of year for next year) and a pencil, with due dates for the year clearly marked.

October 3, 2014
12:01 pm
NorthernRaven
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Think of that 3% TFSA rate like a door-crasher loss-leader sale on TVs. It gets customers in the door, and there were natural limits to the amount of money people could invest, so they weren't paying a huge amount in extra interest. They obviously feel that an extra 1% on the chunk of deposits that are TFSA has been worth it in terms of new customers and deposit base.

I think Peoples has a line of guaranteed (i.e. subprime) credit cards, and has a couple of specialties in multi-occupant and health-care mortgages. As long as their cost of funds makes sense given their business, and again, the TFSA bump has probably been costing them less than you might think, although as TFSA pots increase they may eventually revisit it.

October 3, 2014
9:51 pm
Rick
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Brian said

Canadian Direct Financial will deposit proceeds back to e-savings when advised at purchase time.

When I opened my RSP GIC's with CDF, I specifically asked to have them deposited to my RSP savings account when they mature, and they refused. They don't offer RIF's (yet) so I wanted them to be available to transfer out to another institution that does. They said they would automatically roll over unless I called them when they become due to arrange for transfer. Not positive, but I believe I have 10 days after maturity to transfer. BTW...last time I spoke to a CSR they said that plans to offer RIFs are in the works and they should be available by the time I need them.

October 3, 2014
10:03 pm
Loonie
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Bill, Oaken currently has higher rates than Peoples in all GICs except the 1-year, where they are tied. I realize this is temporary on the part of Oaken, but, in reality, all rate offerings are subject to change at any time, and "temporary" rates can be extended.

Peoples has chosen to showcase their daily TFSA rate; Oaken has much higher longer-term GIC rates. Each has chosen a strategy. Peoples can get out of their highest rates much faster than Oaken can get out of theirs, although people are less likely to withdraw money that is invested at a superior rate, even if it's not guaranteed. I think Peoples' strategy makes sense for a smaller institution.

Personally, I also like the fact that my money is being invested in multi-unit housing assisted by CMHC and in health care facilities, both of which are much needed.
They also offer prepaid gift cards etc. I noticed one of them for sale on the rack in the grocery store not long ago with their logo on the back. Gift cards and promotional cards are very popular.

I remember the earlier failures too. Everybody got their money back from CDIC. My understanding is that the regulatory bodies have tightened things up since then, but I don't have any details.

October 3, 2014
10:16 pm
Loonie
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TD allowed me to reverse an auto rollover a few days after the due date a year or so ago.

October 4, 2014
6:24 am
Loonie
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It sounds like "Transfer" to me. Perhaps you gave an instruction to transfer it to another account?
I don't have any GICs with Peoples.

November 1, 2014
9:13 am
kanaka
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AltaRed said

Nice but I won't purchase a GIC from anyone that limits maturity options to 'renew for same term'. I hit Cancel when I got to that part. That is pure b*****it.

I hear what you are saying. I have decided to select financial institutions that usually have the best rates. And that all have good or half a$$ed ways of providing a summary of your investment and rules for indicating how the funds are to be dealt with at maturity. I have accepted that, but my question is.....can you not contact them 30 days before maturity to let the funds fall back to a savings account to allow you to determine disposition of the matured funds?

November 1, 2014
9:17 am
kanaka
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Loonie said

I spoke to Peoples. There is auto-renewal, but you can void that by simply sending an email. I would ask for confirmation back that they have received it.

Auto-renewal, while annoying, is common, in my experience. I have had the same issue at National Bank, TD and B2B, but as long as I remembered to call them in advance, it was not a problem.

Edited to add: also true at Oaken - I just had occasion to read the fine print on the back of my GIC certificate.

Oaken does accept at point of purchase to put matured funds into your savings account for non resisted GICs but they seem to have different rules for RRSP GICs.

November 1, 2014
9:22 am
kanaka
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Bill said

I wouldn't put much money with People's Trust until someone explains to me how they can offer rates much higher than everyone else. For example, their 3% TFSA savings account rate is 50% higher than the next highest, Canadian Direct Financial. I assume most financial institutions are quite savvy in what they invest our savings in, so I wonder what People's is investing in with my money that allows them to be way ahead of the pack. I'm old enough to remember some trust company failures back in the day, and they were the ones consistently offering the highest rates. And the global financial system wasn't a casino in those days.

Also, Brian said, re remembering when GICs come due, "One would need to have an alert system of some type to remind them to send the email before expiry date." The "alert system" I use is a wall calendar (one of the free ones you get this time of year for next year) and a pencil, with due dates for the year clearly marked.

Someone here explained that a year ago. Their TFSA 3% could be affordable to them as the max any one can invest in it is only the TFSA contribution limit. So their commitment is not a huge one. It was explained much better than I for sure. And no doubt, yes it is a corner stone offer.

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