1 yr = 5.45%, 2 yr = 5¾%, 3 yr = 5.10% (via RBC Online Banking) | RBC Royal Bank | Discussion forum

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1 yr = 5.45%, 2 yr = 5¾%, 3 yr = 5.10% (via RBC Online Banking)
October 13, 2023
11:00 pm
Norman1
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From RBC online banking website non-redeemable GIC purchase page:

1 Year Non-Redeemable GIC
4.05% Posted Rate
1.40% Your Bonus
5.45% Your Rate

2 Years Non-Redeemable GIC
4.25% Posted Rate
1.50% Your Bonus
5.75% Your Rate

3 Years Non-Redeemable GIC
4.00% Posted Rate
1.10% Your Bonus
5.10% Your Rate

October 13, 2023
11:39 pm
everhopeful
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Nice bonus! You're the chosen one sf-laugh ... but the bonus is just marginally higher than advertised rates, except for the 2yr: https://www.rbcroyalbank.com/investments/gic-rates.html

It is nice to see RBC actually being competitive. They would have to do many more good things to have me back as a client though.

October 14, 2023
11:55 am
Alexandra
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Norman1 said
From RBC online banking website non-redeemable GIC purchase page:

1 Year Non-Redeemable GIC
4.05% Posted Rate
1.40% Your Bonus
5.45% Your Rate

2 Years Non-Redeemable GIC
4.25% Posted Rate
1.50% Your Bonus
5.75% Your Rate

3 Years Non-Redeemable GIC
4.00% Posted Rate
1.10% Your Bonus
5.10% Your Rate

  

What I like about the RBC website is that one can purchase a GIC right there with either RBC or Royal Trust (I think Royal Mortg's as well?) Can't remember exactly but it is there. So all separate under CDIC. I just may go with them instead once my GIC with CIBC matures. As I mentioned can roll over for one year @ 5.75% but if I did I would be considerably over the CDIC insured amount.
So probably will put half in the one year @5.5% and the other half in 2yr @5.75% with RBC
Thing is I can lock the 5.75% at CIBC right now even though maturity isn't until 31 Oct. RBC could lower their rates by then.

October 14, 2023
5:15 pm
Norman1
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It is not a issue exceeding CDIC limits with CIBC.

CIBC long term deposits have a DBRS debt rating of AA. Estimated risk of default is around that of Province of Ontario bonds, with DBRS debt rating AA(low), and of Province of BC bonds, with DBRS debt rating of AA(high).

October 15, 2023
4:00 am
RetirEd
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Does RBC still charge a fee for accounts? That would keep me away from them.

RetirEd

October 15, 2023
9:07 am
Norman1
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RBC Royal Bank is still a traditional physical branch channel with service fees to fund the staffed branches.

RBC does have programs that can cover the $4/month fee for an RBC Day to Day Banking chequing account, which includes twelve debits/month at no extra charge.

Clients age 65+ qualify for a $4/month rebate under their Seniors Rebate program.

Up to $6/month can be rebated under their Value Program for clients with two other product categories. The two categories could be (1) a GIC account with at least $500 of GIC's for the "personal investment" category plus (2) an active no-annual-fee RBC credit card with a transaction in the previous 90 days for their "personal credit card" category.

RBC Royal Bank is not set up to serve the online-only branchless banking market like EQ Bank, Hubert Financial, and Tangerine Bank have been.

October 15, 2023
9:16 am
Alexandra
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RetirEd said
Does RBC still charge a fee for accounts? That would keep me away from them.  

Both RBC and CIBC charge a fee. I have a savings and a chequing account with both of them. Last month for instance with CIBC, I had a $6.95 Service Charge with CIBC but on the same day I received a $6.95 Service Charge Discount. With RBC last month they charged me a $4.00 Monthly fee and on the same day I received a $4.00 Seniors Rebate.

A couple of years ago, I was ready to dump RBC altogether. First I gave up my Safe Deposit Box. It was all paper stuff so photocopied it all and sent that to my Daughter and now keep the originals at home. Also have them on my documents on computer. I set up my RBC M/C with CIBC (Tangerine M/C also), so I could make all those bill payments with them. Then just as I was going to cancel my chequing and savings with RBC, they started offering a good rate in their HISA as well as decent GIC rates. So, for now, I'll be keeping those accounts.

October 15, 2023
9:18 am
Doug
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Norman1 said
RBC Royal Bank is still a traditional physical branch channel with service fees to fund the staffed branches. 

Ha! Nice try. That's typical Big 5 bank marketing spin. The reality is all of the Big 5 banks could eliminate monthly service fees to Personal Banking customers' chequing accounts, as the amount of non-interest revenue generated by those fees is not significant. It's more than a rounding error, sure, but it's not significant.

A better, more truthful answer would've been that RBC Royal Bank continues to hold #1 market share in domestic Canadian personal banking, with the most active customers and the highest amount of personal banking deposits (and a large share in personal mortgages, though I believe Scotiabank may be larger in personal mortgages), so they don't need to eliminate service fees.

That being said, RBC Royal Bank is one of the better banks in terms of fee waiver or reimbursement programs. Their MultiProduct rebate was better, but the current Value program is still decent, and generally speaking, the $4 monthly fee can be eliminated with an active RBC credit card and an RBC investment account (I usually recommend RBC Direct Investing or RBC InvestEase). So on that basis, they are better than, say, TD Canada Trust, BMO Bank of Montreal, and National Bank of Canada. sf-cool

Cheers,
Doug

October 15, 2023
11:43 am
Norman1
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Doug said

Ha! Nice try. That's typical Big 5 bank marketing spin. The reality is all of the Big 5 banks could eliminate monthly service fees to Personal Banking customers' chequing accounts, as the amount of non-interest revenue generated by those fees is not significant. It's more than a rounding error, sure, but it's not significant.

That's not the case.

Banks don't make most of their profits from personal banking service fees. But, the service fees are not a rounding error to them.

Personal service fees for bank accounts make up about 5% of total 2019 revenues, according to the Canadian Bankers Assocation in Focus: Bank Revenues and Profits.

5% of Royal Bank's 2019 total revenue of $46 billion is $2.3 billion. That's about 14.5% of the bank's $15.9 billion pre-tax income for 2019 and not that far behind the bank's $2.55 billion of net income from wealth management.

October 15, 2023
12:51 pm
Rail Baron
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I used to rail against big bank service fees when I was younger. Then, I became a shareholder in four of the big six banks and my appreciation of the contribution service fees make to my dividends has grown. It doesn't take owning that many shares in a bank for your dividends to outweigh any service fees that you are not getting waived.

October 15, 2023
1:17 pm
Doug
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Norman1 said
Banks don't make most of their profits from personal banking service fees. But, the service fees are not a rounding error to them.

Personal service fees for bank accounts make up about 5% of total 2019 revenues, according to the Canadian Bankers Assocation in Focus: Bank Revenues and Profits.

5% of Royal Bank's 2019 total revenue of $46 billion is $2.3 billion. That's about 14.5% of the bank's $15.9 billion pre-tax income for 2019 and not that far behind the bank's $2.55 billion of net income from wealth management.  

Why reference RBC's 2019 total revenue, from the Canadian banks' officially registered lobbyist, the Canadian Bankers Association, instead of more contemporary data directly from their public annual reports?

In any case, "personal banking service fees" includes way more than just the monthly fees on chequing accounts. They don't typically break it down further, but I strongly suspect a good portion of that purported $2.3 billion in revenue comes from overdraft fees, non-sufficient funds fees, Interac e-Transfer fees (on accounts where that is a separate fee and not included in the monthly fee), as well as annual fees and overlimit fees on credit cards. In terms of the amount from, say, the RBC Day-to-Day Banking Account, which costs $4.00 per month, I suspect it is very low, likely less than $50 million. Similarly, the RBC No Limit Banking Account revenue is likely less than $100 million. Either of those would be little better than a rounding error to RBC. sf-cool

Cheers,
Doug

October 15, 2023
1:25 pm
Doug
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Rail Baron said
I used to rail against big bank service fees when I was younger. Then, I became a shareholder in four of the big six banks and my appreciation of the contribution service fees make to my dividends has grown. It doesn't take owning that many shares in a bank for your dividends to outweigh any service fees that you are not getting waived.  

I'm a shareholder in a few Canadian and one British bank, too, so I get that. But I also look beyond the revenue growth and on long-term business growth. When I see how many sticky, day-to-day banking customers Tangerine, Simplii Financial, EQ Bank, PC Money Account, and Wealthsimple Cash have attracted, that amounts to the collective customers of fully one of the Big 5 banks, with plenty of runway for growth. Nevermind the tens of billions of dollars the HISA ETFs have attracted, the $25 billion in assets Wealthsimple's products have sucked up, or the banking deposit money that is moving en masse, billions every quarter, to money market funds and treasury bill funds. Do bank asset managers make money on those funds? Yes, but those fixed income funds are typically lower margin, and, crucially, there's also a lot more fund manufacturers competing, many of them not owned by the Big 5. It also represents a loss in liquidity and funding to the banks. So, I would happily sacrifice a quarter of 1-5% reduction in revenue due to the elimination of monthly chequing account fees, if it was included as part of a business moat fortification and long-term growth strategy. 🙂

Cheers,
Doug

October 16, 2023
10:21 am
RetirEd
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RBC has long crowed about its "innovative" fee products and their importance to their profitability and reduction of competition in the banking industry. The recent arrival of no-fee products has given them a bit of a kick in the pants.

Sure, they have ways to "earn back" some of the costs, but only for those willing to spend more on other products. I'm keeping my distance.

RetirEd

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