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People's Trust.....4.00%!!!!WOW
December 28, 2008
11:21 pm
Roc
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December 28, 2008
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I think I have found the highest paying savings account out there....People's Trust at 4.00%!!!!! I just opened up my account there and sent over $300,000 from my previous bank at ICICI( Who by the way just lowered their rate to a measly 2.50%!!!). There are 2 concerns I have about People's Trust. One is that you cannot view your balance online. The operator tells me "It is too expensive to look at your account online, thus we have passed on the savings by offering a higher interest rate". The second concern I have is that my money is only insured for $100,000. If People's Trust goes bankrupt I'm screwed!!(Looking at their 2007 Annual Report it shows a NET profit of only $7,000,000.00???). A bank making only a few million dollars worries me just a tad bit!!! Should I stay with People's Trust or move my money to a much safer investment like the stock market? Please help!!!!

December 29, 2008
1:38 am
Peter
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I don't have any experience with People's Trust. However, I can suggest that you spread your large deposits across multiple institutions. The CDIC insures your deposits with participating institutions for up to $100,000 per account. Depending on the rules, you might even be able to spread your money across multiple types of accounts within the same institution.

December 29, 2008
8:18 pm
Doug
British Columbia, Canada
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If this is possible, one thing you may consider is that because the $100,000 insured deposit limit is per depositor, you can have a joint account with a mother, a joint account with a father, a joint account with a spouse or sibling, and a sole account, each insured up to and including $100,000. As well, I believe for the purposes of CDIC insurance, RRSPs are insured separately than non-registered portfolios (TFSAs count towards your non-registered totals) so you could have $100,000 in an RRSP as well.

Cheers,
Doug

December 29, 2008
8:22 pm
Doug
British Columbia, Canada
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It's actually $100,000 per depositor, Peter, not per account. That causes some confusion amongst customers and it's a common misconception. So, even having multiple savings accounts and chequing accounts in the same name at the same institution, if your total deposits at that institution and amongst all its branches (transit numbers) are over $100,000, CDIC only covers the first $100,000. That being said, as I said above, you can put monies into an RRSP, which I believe is insured separately, and other monies into separate, joint accounts and then you get more than $100,000 of coverage.

It should be noted that deposits held in a corporation's name (a.k.a. corporate or current accounts, as they're called) are not CDIC insured.

Cheers,
Doug

December 31, 2008
11:58 pm
Roc
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Just a quick response to the $100,000 per depositor comment. Yes that is true I can have 3, 4 or 5 accounts with the same bank, but am only insured for $100,000 total. I don't however feel that I should spread out the money to 2 or 3 banks just incase a bank goes bankrupt. When was the last time you remember a bank or trust company went bankrupt in Canada? I'm going to gamble a little and keep the entire $300,000 at People's Trust and enjoy the 4.00% they pay me (Which is roughly $12,000/yr!!) I also have $125,000 in RRSP's, currently at ICICI making 2.50%. But I'll move that to Outlook Financial a 1 yr GIC that pays 3.55%. I'm 35 yrs old and plan to retire on my 45th birthday. What will be my NET Worth in 10 yrs assuming the rates remain the same, and I am able to save $50,000/yr? Thanks!

January 1, 2009
11:37 am
lilredex
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"What will be my NET Worth in 10 yrs assuming the rates remain the same, and I am able to save $50,000/yr?"

You'll be worth lots. But from that comment it appears you intend to follow the GIC route for the next ten years. It that's the case why re-new for 1 yr? Chances are pretty good the rates will be lower then. Have done a lot of my RRSP planning through GICs over the past and have always gone for the longest terms. Turned out to be the right moves. Even had a 10 yr. CSB GIC that paid 7% in the last years. Guys at TD laughed at me for making that move. Turned out I had the laugh on them Yo-Yo's.

Take a look at Achieva, Outlook, Maxa Financial, and Fiscal Agents (Oakville,ON), for better rates. Would also diversify your holdings. Remember the Golden Rule.........never put all your eggs in one basket

January 1, 2009
12:03 pm
lilredex
Guest
Guests

Your net worth will be $1,068,390.86 If...............you have $300G (now) and add $50G yearly for next ten years all at 4% compounded. Take a look at your Peoples site> Tools> RRSP calculator> RRSP Retirement calculator.

January 1, 2009
12:12 pm
lilredex
Guest
Guests

By going longer term and moving the rate to "5.1%" your new balance is : $1,157,403.90 A $15G yearly bonus.

http://www.maxafinancial.com/b.....x?cid=1719

January 1, 2009
3:08 pm
Jason
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Should I stay with People's Trust or move my money to a much safer investment like the stock market?

The stock market is not a safer investment than a savings account.

I don't however feel that I should spread out the money to 2 or 3 banks just incase a bank goes bankrupt.

I disagree with this comment. You seem to be implying that diversifying your investments increases risk, which is almost always false, especially in this case. If you keep $300,000 in one CDIC-insured account, there is a chance that you can lose $200,000 if the bank goes bust. On the other hand, if you have three CDIC-insured accounts at different banks, each with $100,000 there is absolutely no risk whatsoever that you will lose a penny, even if all three banks go bust. (This is of course assuming in both cases that CDIC honours its commitment.)

By going longer term and moving the rate to "5.1%" your new balance is : $1,157,403.90 A $15G yearly bonus.

http://www.maxafinancial.com/b.....x?cid=1719

This rate is for a 7-year GIC. It should be noted that CDIC insurance only applies on GIC's with terms up to 5 years.

January 1, 2009
3:11 pm
Jason
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When was the last time you remember a bank or trust company went bankrupt in Canada?

That would be 1996. See http://en.wikipedia.org/wiki/C.....orporation.

January 1, 2009
6:04 pm
lilredex
Guest
Guests

But, this is a Manitoba Credit Union and is not insured under CIDC. Any amount or term is covered by CUDGC, if you have faith in them..........I do.

http://www.cudgc.com/faqs.html#q1

January 1, 2009
9:39 pm
Roc
Guest
Guests

Thank you for some of the suggestions!!!Here's my plan of action:

So I've decided to move $125,000.00 in RRSP from ICICI to Outlook and lock into a 1yr GIC paying 3.55%. At People's Trust, I have $300,000.00 I plan to move $100,000.00 to B2B Trust Savings that pays 3.50% and keep $200,000.00 at People's Trust.(I know I could lose $100,000 but I'll take the gamble.)

Looking at People's Trust financial statement for 2007, it reads NET INCOME $7,585 in "thousands of dollars". My question to you guys is: Did they make $7,585,000.00 or $7,585,000,000.00??? You can check it out at their website:

http://www.peoplestrust.com/fi.....ncials.htm

Again, thanks for the suggestions and hope to hear from you soon!

January 8, 2009
12:45 am
John
Guest
Guests

Roc said:

I think I have found the highest paying savings account out there....People's Trust at 4.00%!!!!! I just opened up my account there and sent over $300,000 from my previous bank at ICICI( Who by the way just lowered their rate to a measly 2.50%!!!). There are 2 concerns I have about People's Trust. One is that you cannot view your balance online. The operator tells me "It is too expensive to look at your account online, thus we have passed on the savings by offering a higher interest rate". The second concern I have is that my money is only insured for $100,000. If People's Trust goes bankrupt I'm screwed!!(Looking at their 2007 Annual Report it shows a NET profit of only $7,000,000.00???). A bank making only a few million dollars worries me just a tad bit!!! Should I stay with People's Trust or move my money to a much safer investment like the stock market? Please help!!!!


Hi there! The People profits you refer to are as of Dec 31, 2007 - but so much has happened in the past year, a lot of banks are suffering and will continue to do so...and many are going the way of the dinosaur in 2009. By some estimates closures in the U.S. will top 1000 regional banks. Canada is not immune from this tidal wave of bad news. Be careful, always look for CDIC in these times. Why do you think they are offering 4% if not to beef up their balance sheet? I keep my own funds diversified - ING, HSBC, Manulife. Take care!

January 29, 2009
1:18 pm
Chris
Guest
Guests

Roc said:

Thank you for some of the suggestions!!!Here's my plan of action:

So I've decided to move $125,000.00 in RRSP from ICICI to Outlook and lock into a 1yr GIC paying 3.55%. At People's Trust, I have $300,000.00 I plan to move $100,000.00 to B2B Trust Savings that pays 3.50% and keep $200,000.00 at People's Trust.(I know I could lose $100,000 but I'll take the gamble.)

Looking at People's Trust financial statement for 2007, it reads NET INCOME $7,585 in "thousands of dollars". My question to you guys is: Did they make $7,585,000.00 or $7,585,000,000.00??? You can check it out at their website:

http://www.peoplestrust.com/fi.....ncials.htm

Again, thanks for the suggestions and hope to hear from you soon!


You're better off buying stocks in Canadian banks, collect the dividend and enjoy the capital appreciation over the years. 4.00% interest after deducting tax and inflation leaves you with pretty much a zero return.

January 29, 2009
6:16 pm
Craig
Guest
Guests

Chris said:

Roc said:


Thank you for some of the suggestions!!!Here's my plan of action:


So I've decided to move $125,000.00 in RRSP from ICICI to Outlook and lock into a 1yr GIC paying 3.55%. At People's Trust, I have $300,000.00 I plan to move $100,000.00 to B2B Trust Savings that pays 3.50% and keep $200,000.00 at People's Trust.(I know I could lose $100,000 but I'll take the gamble.)


Looking at People's Trust financial statement for 2007, it reads NET INCOME $7,585 in "thousands of dollars". My question to you guys is: Did they make $7,585,000.00 or $7,585,000,000.00??? You can check it out at their website:


http://www.peoplestrust.com/fi.....ncials.htm


Again, thanks for the suggestions and hope to hear from you soon!



You're better off buying stocks in Canadian banks, collect the dividend and enjoy the capital appreciation over the years. 4.00% interest after deducting tax and inflation leaves you with pretty much a zero return.


I wouldn't be buying bank stock at the moment, but otherwise I agree with you. Still, a 4% return on cash is nothing to sneeze at in this climate. Inflation is the lowest it's been in a long time. I'm hoping these guys start offering registered cash accounts (although they are not offering a TFSA, I've already asked them).

February 18, 2009
5:41 pm
sylvie
Guest
Guests

Doug said:

It's actually $100,000 per depositor, Peter, not per account. That causes some confusion amongst customers and it's a common misconception. So, even having multiple savings accounts and chequing accounts in the same name at the same institution, if your total deposits at that institution and amongst all its branches (transit numbers) are over $100,000, CDIC only covers the first $100,000. That being said, as I said above, you can put monies into an RRSP, which I believe is insured separately, and other monies into separate, joint accounts and then you get more than $100,000 of coverage.


It should be noted that deposits held in a corporation's name (a.k.a. corporate or current accounts, as they're called) are not CDIC insured.


Cheers,
Doug


Hello,

Hello,

I have been checking People's trust as well and when I saw your comment about corportations not being insured I therefore had to check it out....It is NOT CORRECT that corporations are not insured....I have sent an email to CDIC and got a confirmation in writting from them and Corporations are insured...If you want a copy of the email I will send you an email. Their website is not clear ....but thanks as I was not too sure but now I am.

Sylvie

February 20, 2009
12:56 am
guest
Guest
Guests

Roc said:

Just a quick response to the $100,000 per depositor comment. Yes that is true I can have 3, 4 or 5 accounts with the same bank, but am only insured for $100,000 total. I don't however feel that I should spread out the money to 2 or 3 banks just incase a bank goes bankrupt. When was the last time you remember a bank or trust company went bankrupt in Canada? I'm going to gamble a little and keep the entire $300,000 at People's Trust and enjoy the 4.00% they pay me (Which is roughly $12,000/yr!!) I also have $125,000 in RRSP's, currently at ICICI making 2.50%. But I'll move that to Outlook Financial a 1 yr GIC that pays 3.55%. I'm 35 yrs old and plan to retire on my 45th birthday. What will be my NET Worth in 10 yrs assuming the rates remain the same, and I am able to save $50,000/yr? Thanks!


How is it possible for you to save $50,000/yr when you say:
.
10:21 am
February 18, 2009

Roc

Guest
.

"So my total gross income yearly is $14,550.00!!!!Plus I have a good high paying job that pays me $60,000/yr gross income. Life is good when you have money in the bank, hopefully you too can follow in my footsteps. This would definitely make Donald Trump green with envy and proud!!!!!!"

.
Your figures are way out of wack.

I guess that's why you also said:
.
8:07 pm
January 23, 2009

Roc

Guest

.
"Attention Math Wizards:
What are some of the formulas to calculating interest? I know that simple interest is calculated using I = Prt (Interest = Principle x rate x time). There must be another formula out there? I have a 1YR GIC with Outlook Financial paying 3.55% on $126,500.00 and I'd like to know what's my balance at year end? In my case that would be : ($4490.75=$126,500.00×0.0355×1)????(My math is so bad that I require a calculator just to answer the skill testing math question in order to write this blog!!!!)
thanks"

.
P.S.
I also enjoyed your article on offshore tax havens. I'm beginning to see a pattern here:

.
3:39 pm
January 12, 2009

Roc

Guest

.
"Found a great way to make alot of money really fast.....Millennium Bank!!!! Located in the Grenadines/St.Vincent area(Near Barbados) they offer GIC's, and Savings Accounts that have the highest rates I've ever seen!!!. Owned by United Trust of Switzerland, the interest earned is tax exempt(They pay no tax down there), the currency is avaliable in Canadian dollars. One small downside to Millennium Bank is that they are NOT FDIC insured, but what are the odds of them going bankrupt? Send over $100,000 at 7.25% for a 5YR GIC and watch that money grow to $136,250!!!!Tax Free!! Visit their website at http://www.mlnbank.com
Questions:
Is this a good bank to invest in living in Canada? Does Revenue Canada consider this Bank as "Foreign Income" even though a T-5 Slip will never be issued to you? How do you claim any interest made from an account there? Or do you need to?
Thanks"

.
Please fill me in if I missed any other hillarious quotes.

February 21, 2009
10:49 am
Stan
Guest
Guests

Roc said:

I don't however feel that I should spread out the money to 2 or 3 banks just incase a bank goes bankrupt. When was the last time you remember a bank or trust company went bankrupt in Canada? I'm going to gamble a little and keep the entire $300,000 at People's Trust.


History of Trust Company Failures
Commonwealth Trust Company 1970
Security Trust Company Limited 1972
Astra Trust Company 1980
District Trust Company 1982
AMIC Mortgage Investment Corporation 1983
Crown Trust Company 1983
Fidelity Trust Company 1983
Greymac Mortgage Corporation 1983
Greymac Trust Company 1983
Seaway Mortgage Corporation 1983
Seaway Trust Company 1983
Northguard Mortgage Corporation 1984
CCB Mortgage Investment Corporation 1985
Canadian Commercial Bank 1985
Continental Trust Company 1985
London Loan Limited 1985
Northland Bank 1985
Pioneer Trust Company 1985
Western Capital Trust Company 1985
Bank of British Columbia 1986
Bank of British Columbia Mortgage Corporation 1986
Columbia Trust Company 1986
North West Trust Company 1987
Principal Savings & Trust Company 1987
Financial Trust Company 1988
Settlers Savings and Mortgage Corporation 1990
Bank of Credit and Commerce Canada 1991
Saskatchewan Trust Company 1991
Standard Loan Company 1991
Standard Trust Company 1991
Shoppers Trust Company 1992
Central Guaranty Mortgage Corporation 1992
Central Guaranty Trust Company 1992
First City Trust Company 1992
First City Mortgage Company 1992
Dominion Trust Company 1993
Prenor Trust Company of Canada 1993
Confederation Trust Company 1994
Monarch Trust Company 1994
Income Trust Company 1995
North American Trust Company 1995
NAL Mortgage Company 1995
Security Home Mortgage Corporation 1996

February 21, 2009
6:46 pm
Doug
British Columbia, Canada
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You are correct, Sylvie. I was wrong about the point corporate deposits aren't CDIC insured. In fact, incorporated companies and limited partnerships corporate deposits are CDIC insured up to and including the maximum limit of $100,000 per depositor. A sole proprietorship's (Bob Smith doing business as Bob's Plumbing) deposits would be included as part of Bob Smith's overall limit.

Cheers,
Doug

February 25, 2009
2:19 pm
david
Guest
Guests

As per insurance, don't forget about CIPF. You could put $1 million in an account and have it protected. Or if you have more, put a million in each of these listed institutions http://www.cipf.ca/c_find_active.asp

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