A new article has been anonymously written about OAS: it provides an intro to OAS and some strategies to reduce OAS clawback:

8:13 pm

May 6, 2010

I was under the impression that any compounded GICs would generate a T5 each year with the money you would receive, but on retrospect, it doesn't make sense.

All of our compounding GICs are in TSFAs **so it really wouldn't matter, would it, when the interest is deposited in our accounts? **

However, I am glad to have read the article as it has given me information I can pass on to others.

Thanks.

regsmith

9:37 am

August 19, 2011

Regarding T5's on GIC's, my understanding is that if you have a 5 year non-registered compounding GIC that interest is not paid out until maturity ( at the end of the 5 year term). Then you get a T5 representing the accumulated interest over the 5 year period. I have a 5 year non registered GIC with Accelerate and they offered either an annual pay or compounded. The rate was the same for either option. I opted for the annual pay as I didn't want a big lump sum interest payment at the end of 5 years. This is the way they explained it to me.

1:40 pm

December 23, 2011

pebbles saidRegarding T5's on GIC's, my understanding is that if you have a 5 year non-registered compounding GIC that interest is not paid out until maturity ( at the end of the 5 year term). Then you get a T5 representing the accumulated interest over the 5 year period. I have a 5 year non registered GIC with Accelerate and they offered either an annual pay or compounded. The rate was the same for either option. I opted for the annual pay as I didn't want a big lump sum interest payment at the end of 5 years. This is the way they explained it to me.

https://www.cibc.com/ca/gic/article-tools/you-your-gic-and-your-t5.html

11:54 am

December 23, 2011

pebbles saidAccrued interest makes more sense. I must have misunderstood the explanation. ( I didn't get the explanation from Accelerate - got it elsewhere)

I am sure you know ..... a GIC with compounded interest will yield more in your pocket than if paid out annually.

Regards Peter

ps. I think that years ago you did NOT pay income tax til the GIC matured....but I could be wrong!!!

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