2.8% promo interest on new money to Savings, RRSP, TFSA (November 1, 2019 - April 30, 2020) | Page 3 | Simplii Financial (formerly PC Financial) | Discussion forum

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2.8% promo interest on new money to Savings, RRSP, TFSA (November 1, 2019 - April 30, 2020)
November 14, 2019
4:15 pm
Oscar
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PilotPete said
WARNING: All is not as it appears. Note the terms say: "For Eligible Accounts opened during the Offer Period, Promotional Interest is calculated, at the end of the Offer Period, on the Eligible Account’s average daily closing balance from the date the Eligible Account is opened to the end of the Offer Period (the “New Balance”).
So since interest is calculated on the basis of the AVERAGE daily balance FROM Nov 1st you will only receive interest at the rate of 2.52% on money deposited on Nov 18th for example! And the rate reduces, the later you deposit, because the zero balances in the account for each day FROM Nov 1st is included in the AVERAGE calculation.
Talk about devious!!!
sf-frown  

Don't give them any ideas. Fortunately that's not how they do it though. They calculate the interest daily, on the average daily balance and pay the regular interest at the end of the month.
So if you deposit $100000 on November 18 they deposit interest on November 30 for 13 days at regular rate (1.1% I think) so that's 39.17 . If you withdraw your $100000 December 1 you will still get your bonus interest on the 100000 for 13 days (1.7%) about a month after the promo ends, about 60.54.

November 14, 2019
5:08 pm
Bud
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so if someone puts in a 100k before the 18th they wont get 2.8 till the end date?

November 14, 2019
5:32 pm
Norman1
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PilotPete said

So since interest is calculated on the basis of the AVERAGE daily balance FROM Nov 1st you will only receive interest at the rate of 2.52% on money deposited on Nov 18th for example! And the rate reduces, the later you deposit, because the zero balances in the account for each day FROM Nov 1st is included in the AVERAGE calculation.
Talk about devious!!! sf-frown  

Paying 2.8% on average balance over the whole period for the whole period and paying 2.8% for the days actually on deposit are mathematically equivalent.

See the algebraic proof I wrote previously.

November 15, 2019
5:48 am
savemoresaveoften
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PilotPete said
WARNING: All is not as it appears. Note the terms say: "For Eligible Accounts opened during the Offer Period, Promotional Interest is calculated, at the end of the Offer Period, on the Eligible Account’s average daily closing balance from the date the Eligible Account is opened to the end of the Offer Period (the “New Balance”).
So since interest is calculated on the basis of the AVERAGE daily balance FROM Nov 1st you will only receive interest at the rate of 2.52% on money deposited on Nov 18th for example! And the rate reduces, the later you deposit, because the zero balances in the account for each day FROM Nov 1st is included in the AVERAGE calculation.
Talk about devious!!!
sf-frown  

you overthought how things work. On days you have $X in the account, you earn the current rate, whatever that current rate will be. If X=0 that day, u earn $0 that day.....

November 15, 2019
10:42 am
Bud
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bottom line its 2.8?

November 15, 2019
5:12 pm
Norman1
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Yes, it is 2.8% for the days of the offer period that the new money is in the Simplii HISA. It is 0% for the days that the new money is not in the account.

November 16, 2019
11:06 am
PilotPete
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Sorry guys but you are all wrong.
I re-read the legalese and spoke just moments ago with Ryan of Simplii to confirm my assertion.
Indulge me please:
Nov 1st to Apr 30th is 182 days. This is the "Promotional Period"
Promotional interest is 1.7% PER ANNUM paid on the AVERAGE DAILY BALANCE during the Promotional Period.
So if I deposit $200,000 on Jan 31st my money will be on deposit for 91 days. This should earn Promotional interest of 1.7% ie
200,000 x 1.7 divided by 100 divided by 365 x 91 = $847.67
BUT the contract says it will pay 1.7% pa on the AVERAGE DAILY BALANCE for the Promotional Period, which is 182 days, so since during the FIRST 91 days the daily balance was ZERO then the Average daily balance for the 182 days is $100,000. This is the amount Simplii will use to calculate the promotional interest paid in May. SO:
100,000 x 1.7 divided by 100 divided by 365 x 91 = $423.84
From this you can see that NO-ONE will earn 2.8% UNLESS their deposit was made on November 1st! And the later you deposit the less you will receive.

November 16, 2019
11:36 am
Norman1
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You are mixing up the cases of account opened before and account opened during the Offer Period.

According to the terms and conditions, for an account opened on January 31, 2020 (during the Offer Period), the average balance will be calculated from January 31, 2020, and not from November 1, 2019:

For Eligible Accounts opened during the Offer Period [November 1, 2019 - April 30, 2020], Promotional Interest is calculated, at the end of the Offer Period, on the Eligible Account’s average daily closing balance from the date the Eligible Account is opened to the end of the Offer Period (the “New Balance”), to a maximum New Balance amount of $500,000 in each of a primary account holder’s (i) Eligible Savings Accounts, collectively, (ii) RRSP Accounts, and (iii) TFSA.

In your example, the average balance is then $200,000 and not $100,000.

November 16, 2019
11:53 am
Bud
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deposit Nov 21 whats the yield for term?

November 16, 2019
11:55 am
PilotPete
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Sorry Norman,
I now see the reason for the confusion.
What you say is correct for NEWLY opened accounts, but as in my case I was assuming (presumptuously obviously) that moneys were ADDED to existing Simplii HISAs, since Simplii itself appears to assume this by continuously referencing the account balance at Oct 31st.
Pete

November 16, 2019
11:57 am
PilotPete
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Bud,
It will depend on whether you are opening a NEW account (for the first time) or already had a account.

November 16, 2019
12:16 pm
GoJetsGo
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Pete, your math is incorrect & you have confused poor Ryan on the phone.

As you state, "the average daily balance for the 182 days is $100,000." You then calculate it over 91 days. The promo interest in this scenario would be 100,000 x .017 divide by 365 x 182 = 847.67

I have been on these promos many times (with an existing account) and know first hand how they calculate average daily balance.

November 16, 2019
12:30 pm
Bill
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I agree, GoJetsGo, Pete is ignoring that you will get bonus interest calculated for the whole period (or the whole period the account was open) based on the average daily balance for the whole period (assuming Oct 31 balance was zero). It's just Simplii's way of doing it, a one-time whole-period bonus calculation using the average daily balance (over Oct 31 balance) over the period.

November 16, 2019
1:53 pm
PilotPete
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Sorry but that makes no sense at all and Ryan DID check with his superiors before submitting his conclusion.
Why on earth do you think Simplii would pay interest for ANY period during which you had no money on deposit?
BTW we should not be adversarial. I am doing this as a public service, taking valuable time to caution potential investors about misleading promotions.
WE are on the same side.
Check it out with Simplii for yourself if you doubt my word.

November 16, 2019
2:08 pm
GoJetsGo
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Pete, Simplii does not pay interest for the time period that you don't have money on deposit. I'm not sure how else to spell it out, but I'll try...

91 days @ $0 balance plus 91 days @ $200,000 balance is the equivalent of an average daily balance of $100,000 for 182 days and NOT the equivalent of 91 days of $0 balance plus 91 days @ $100,000.

I don't doubt that you confused Ryan at Simplii. Sorry to everyone for repeating but I have been on many of their "Average Daily Balance" promos before and have all the proof of previous interest payments made to me (I know when I've been short-changed even 0.01).

This is not a "misleading promotion" as you claim. You are misleading people who read this forum with your posts.

November 16, 2019
2:51 pm
GR
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Unfortunately, Simplii's wording seems unnecessarily complicated and is not "simple". Ignore the "fine print" and don't try to interpret what it means. The bottom line is that the calculations from their previous promos all yielded exactly the same results for interest paid as you would expect from any financial institution.

November 16, 2019
3:20 pm
PilotPete
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I certainly hope you are right.
Good luck everyone and good night.

November 16, 2019
3:34 pm
Bill
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If you read the terms you will see that promotional interest "is calculated for the Offer Period", i.e. the full 182 days (or, for new accounts, from the day the account was opened to Apr 30/20). Says nothing about when you put your money in, everybody gets a promo interest calculation based on "the Offer Period".

So if you already have an account with zero balance and put in $100K on day 92, your daily average for the Offer Period is $50K. So you'll get promo interest for 182 days based on $50K daily average. If you want to view that as getting interest for 91 days when your account had zero, fine, they make it up by only giving you promo interest on half your balance during the last 91 days. In any event it's the same as giving you zero for 91 days and then promo interest on your $100K for the next 91 days.

Just CIBC's way of doing the calculation. Unusual perhaps, not misleading, in my view, if you read the fine print closely (which we're always been cautioned to do before signing on a dotted line).

November 16, 2019
3:35 pm
Bud
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new money into existing acct,
deposit Nov 22 whats the yield for term?

November 16, 2019
5:06 pm
PilotPete
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Bud,
I'll let Bill answer that.
My money's in Motive Financial (straightforward 2.8%)

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