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5.25% HISA rate has arrived at Simplii
August 13, 2023
4:35 am
canadian.100
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moveyourmoney said

You could walk into a big bank and they would do something competitive for a mil. And you could go to sleep at night knowing your money is about as safe as it could be when going outside of cdic coverage. Simplii hasn’t figured out that they need to attract 10 investors with $100k instead of trying to hit the home run with million dollar investors. It’s not going to work for them. 

Simplii is a division of CIBC so in reality one is depositing with a big bank. Obviously they do not want "to attract 10 investors with $100K" - they do want the big asset depositor segment. I think they have figured it out and this may be a successful strategy.

August 13, 2023
6:08 am
moveyourmoney
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canadian.100 said

moveyourmoney said

You could walk into a big bank and they would do something competitive for a mil. And you could go to sleep at night knowing your money is about as safe as it could be when going outside of cdic coverage. Simplii hasn’t figured out that they need to attract 10 investors with $100k instead of trying to hit the home run with million dollar investors. It’s not going to work for them. 

Simplii is a division of CIBC so in reality one is depositing with a big bank. Obviously they do not want "to attract 10 investors with $100K" - they do want the big asset depositor segment. I think they have figured it out and this may be a successful strategy.  

That’s a big assumption if things go sideways…then the fine print in the t’s & c’s will come to light. There’s is good reason they are set up under different entities and as much as we would like to think Simplii is backed by CIBC, they are separate. There’s been many posts cautioning investment beyond CDIC limits with many cases to illustrate why. Like I said, I’ve been with Simplii a long time, I would never give them a mil (and really caution others who would) when I can get competitive rates from the big guys for those amounts. Canada’s economy has to collapse for RBC to go under. (I’m not a big bank fan, but that’s reality) Simplii is a blip on the screen.

August 13, 2023
6:42 am
COIN
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I think a division of a Big Bank is a division of the Big Bank (same risk or lack thereof). Not quite the same as a subsidiary of a Big Bank.

August 13, 2023
8:17 am
Norman1
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That's right. Simplii Financial is just the name of a department/division in CIBC and a product brand name used by CIBC.

Simplii-branded GIC's and Simplii-branded bank accounts are all issued by CIBC and included in CIBC's CDIC deposit register.

The fine print of the Simplii accounts defines the parties of the agreement as follows:

  • "We", "us" and "our" mean Canadian Imperial Bank of Commerce, and any member of the CIBC group of companies that provide you with a Simplii Financial product or service.
  • "You" and "your" mean the Simplii Financial client.
August 13, 2023
9:00 am
KamWest
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They are simply testing the market to see if they can get larger scale deposits without giving away the full profit margins at CIBC.

They are fully away of the frugal nature of the average ONLINE ONLY client. There are typically two types of these clients, the poorer type that cannot afford fees and the more well to do that are too frugal for the fees at the regular banks.

So the only way to woo the more well to do frugal client is to offer them a phenomenal rate without having to give it to their poorer clientele. How do you do that? You only give the rate to larger deposits and hope that sites like this discuss it and bring in the people from Tangerine, Motive etc.

It's a no risk for CIBC, by using the simplii division they can keep their profits and still fund raise (larger deposits) when needed.

August 13, 2023
10:35 am
canadian.100
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moveyourmoney said

That’s a big assumption if things go sideways…then the fine print in the t’s & c’s will come to light. There’s is good reason they are set up under different entities and as much as we would like to think Simplii is backed by CIBC, they are separate. There’s been many posts cautioning investment beyond CDIC limits with many cases to illustrate why. Like I said, I’ve been with Simplii a long time, I would never give them a mil (and really caution others who would) when I can get competitive rates from the big guys for those amounts. Canada’s economy has to collapse for RBC to go under. (I’m not a big bank fan, but that’s reality) Simplii is a blip on the screen.  

What do you mean by going sideways? CIBC made a PROFIT of over $9 Billion in 2022 (i.e. about $6 Billion after income taxes.) So if CIBC's profit goes "sideways" (your expression) in 2023 to say $7 Billion before income taxes, are your really going to be that worried about CIBC (and Simplii). I won't.

PS Simplii is not a separate entity - it is a division of CIBC. In the case of Tangerine - it is a separate entity from Scotiabank but it is owned 100% by Scotiabank. I have no worries about Tangerine - it is doing very well.

August 13, 2023
5:31 pm
moveyourmoney
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suburbs4life said
Did they say what is a substantial sum? 100k or more like 1 mill plus?  

I enjoy reading the posts on this site. Lots of good information but I also see how a few like to dominate the conversation. I can only share my investing experiences and tell you that when you think you have a sure thing, something so solid it can’t go sideways, be careful…lots of these situations can go bad. I’ve been fortunate over the years to be able to invest in a variety of opportunities. Not all were winners and I can tell you a few things about the ones that went bad, stuck in my mind and taught me a couple of things. I made an investment where I was clear on the t’s and c’s, my agent clear as well, in terms of protections. It was black and white. When the company went under and the lawyers got involved, applied the law, the protections were not there that everyone involved were sure about. There is good reason why these companies set up parent, subsidiary, and divisions. All have different legal impacts. As long as nothing goes sideways, there’s no issue. But when there is and lawyers and courts get involved, what we interpret in the t’s and c’s might not be the case when they are done. Now, having said that, Canadian banks with our regulations are relatively strong. But don’t invest blindly, especially when you knowingly go beyond stated protections. So many cases where people think they are safe to wake up and it’s all changed. CIBC reps don’t acknowledge the Simplii division and there’s good reason for that. As solid as they are, CIBC is underperforming, their shares down significantly. All of these banks are trying to recover from inflation difficulties and compete for investment so they can make better lending returns. Losing a couple of billion is huge, it makes investors gittery and they invest elsewhere. They use other peoples’ money to survive so as soon as there’s a ripple and people get scared, look out. Just my two cents, no use responding to the know it alls, I’ve seen them go quiet when things go sideways.

August 13, 2023
6:58 pm
suburbs4life
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Thanks moveyourmoney. I appreciate your thoughts. I wouldn’t put a mill in one bank account anytime soon and if I were it would be a big bank only. However, a bit over CDIC coverage I’d be ok with which is why I was asking

August 13, 2023
7:20 pm
savemoresaveoften
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@moveyourmoney

If you do your due diligence, you will realize Simplii is indeed CIBC. It is just a branch transit of CIBC and the bank transit is 010. The setup is completely different from BNS owned Tangerine, which is a totally separate entity from BNS.

Simplii is simply CIBC and it’s under the same $100k CDIC insurance. Would I have over $100k at CIBC, easily. I am not concerned over any of the big 5,6,7 banks. As for credit Union, up to $250k only, I just look at principal and not going to waste my time to worry about the interest portion taking me over the limit.

As for T&C and how under severe circumstances, things may no longer followed the T&C. I agree with you though. Just look at how a special class of Credit Suisse bond holders got screwed when Swiss bank took it over under the emergency takeover ‘ordered’ by the Swiss authority.

Some risks are worth taking, some are not.

August 14, 2023
6:31 pm
moveyourmoney
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savemoresaveoften said
@moveyourmoney

If you do your due diligence, you will realize Simplii is indeed CIBC. It is just a branch transit of CIBC and the bank transit is 010. The setup is completely different from BNS owned Tangerine, which is a totally separate entity from BNS.

Simplii is simply CIBC and it’s under the same $100k CDIC insurance. Would I have over $100k at CIBC, easily. I am not concerned over any of the big 5,6,7 banks. As for credit Union, up to $250k only, I just look at principal and not going to waste my time to worry about the interest portion taking me over the limit.

As for T&C and how under severe circumstances, things may no longer followed the T&C. I agree with you though. Just look at how a special class of Credit Suisse bond holders got screwed when Swiss bank took it over under the emergency takeover ‘ordered’ by the Swiss authority.

Some risks are worth taking, some are not.  

I think your comments are fair. My view regarding these FIs and the set up of their affiliates is more philosophical in terms of what potentially happens in extreme circumstances of a significant failure. If you read about SVB (along with their subs, which is different, I agree); and specifically Signature Bank and the way the FDIC allowed Flagstar to come in to purchase partial assets (of SB)…what it says to me is that when things get ugly, there’s a potential fire sale mentality to try to return/preserve as much for the investors as possible. They start to look for creative ways to slice and dice assets. (Simplii online vs CIBC bricks and mortar) It becomes very complex and they may look for ways to separate what makes sense. Canadian banking and laws are obviously different from the US but the I think the same philosophy will apply to protect creditors.

August 14, 2023
8:10 pm
Norman1
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moveyourmoney said

… If you read about SVB (along with their subs, which is different, I agree); and specifically Signature Bank and the way the FDIC allowed Flagstar to come in to purchase partial assets (of SB)…what it says to me is that when things get ugly, there’s a potential fire sale mentality to try to return/preserve as much for the investors as possible. They start to look for creative ways to slice and dice assets. (Simplii online vs CIBC bricks and mortar) It becomes very complex and they may look for ways to separate what makes sense. Canadian banking and laws are obviously different from the US but the I think the same philosophy will apply to protect creditors.

That's nonsense. It is only complex to those who don't understand how corporate law works.

It is prefectly fine for Flagstar to buy whatever pieces of SB it wishes to pay for. It doesn't matter to the creditors of SB because the creditors will received the proceeds not matter if one buyer buys all the assets of SB or ten different buyers take different parts of SB.

Your philosophical take has no basis in reality or law. For someone who claims to have lost money in an investment, you don't seem to have learned much for the "tuition" paid. You don't even understand the legal significance between a division and subsidiary!

August 14, 2023
9:21 pm
moveyourmoney
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Norman1 said

moveyourmoney said

… If you read about SVB (along with their subs, which is different, I agree); and specifically Signature Bank and the way the FDIC allowed Flagstar to come in to purchase partial assets (of SB)…what it says to me is that when things get ugly, there’s a potential fire sale mentality to try to return/preserve as much for the investors as possible. They start to look for creative ways to slice and dice assets. (Simplii online vs CIBC bricks and mortar) It becomes very complex and they may look for ways to separate what makes sense. Canadian banking and laws are obviously different from the US but the I think the same philosophy will apply to protect creditors.

That's nonsense. It is only complex to those who don't understand how corporate law works.

It is prefectly fine for Flagstar to buy whatever pieces of SB it wishes to pay for. It doesn't matter to the creditors of SB because the creditors will received the proceeds not matter if one buyer buys all the assets of SB or ten different buyers take different parts of SB.

Your philosophical take has no basis in reality or law. For someone who claims to have lost money in an investment, you don't seem to have learned much for the "tuition" paid. You don't even understand the legal significance between a division and subsidiary!  

You sound a little agitated Norman 1, not surprised. You make me laugh, you didn’t even realize you made my point about how parent and division can get separated in certain scenarios.
I can only hope to be as smart as you someday!

August 14, 2023
9:56 pm
Norman1
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moveyourmoney said

… You make me laugh, you didn’t even realize you made my point about how parent and division can get separated in certain scenarios.

No, I didn't. That's because you didn't have a point.

Divisions don't legally exist. Things that don't legally exist cannot legally have creditors, assets, liabilities, or parents.

The Simplii Financial cubicles and web site legally assets of CIBC. Flip over a Simplii Financial debit card. What does the card say it is the property of? Simplii Financial? No. Mine says "THIS CARD IS ISSUED BY AND THE PROPERTY OF CIBC".

What's that? Some algorithm at Simplii Financial must have screwed up and didn't update the text from CIBC to SIMPLII FINANCIAL? sf-confused

August 14, 2023
10:21 pm
moveyourmoney
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Norman1 said

moveyourmoney said

… You make me laugh, you didn’t even realize you made my point about how parent and division can get separated in certain scenarios.

No, I didn't. That's because you didn't have a point.

Divisions don't legally exist. Things that don't legally exist cannot legally have creditors, assets, liabilities, or parents.

The Simplii Financial cubicles and web site legally assets of CIBC. Flip over a Simplii Financial debit card. What does the card say it is the property of? Simplii Financial? No. Mine says "THIS CARD IS ISSUED BY AND THE PROPERTY OF CIBC".

What's that? Some algorithm at Simplii Financial must have screwed up and didn't update the text from CIBC to SIMPLII FINANCIAL? sf-confused  

And you probably do your Simplii banking at the CIBC counter and call in to the CIBC to help you with your Simplii accounts…all the same, right.

August 15, 2023
4:17 am
KamWest
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moveyourmoney said

And you probably do your Simplii banking at the CIBC counter and call in to the CIBC to help you with your Simplii accounts…all the same, right.  

I pick up my certified cheques at CIBC, anything mailed out I have the option of picking up at CIBC. The phone rings at the same call centre except a separate line.

CIBC is simplii cutting costs with the simplii division by eliminating brick and mortar locations and staff, pretty well what Public Mobile is doing for Telus. Telus used to want to eliminate Public but now they hunkered down on the no staff part and are trying to move people from their middle tier Kodoo to Public.

Everyone is doing the online only and CIBC could not stand by and let PCFinancial take that business so they pushed their way in.

Simplii does not have as many features (ie credit card email notification types) but it is the place where CIBC will try new things without exposing the main CIBC client tell to them. IE the insanely good interest rate on larger deposits.

A simple way take advantage of both is to have accounts at both, which I have and then decide where to keep the money. The Simplii concept was higher rates to attract the savers and fund CIBC. To me it looks like they are getting back to that but only with higher deposits. If it works and it attracts income they may bring the tiers down, it's probably a wait and see approach.

As far as deposit limits go, do what makes you comfortable. I have been with CIBC or a division of them for most of my life and am comfortable knowing my money is safe. However I also have accounts at other institutions so my comfort level is pretty high knowing I can access funds in other places when needed.

August 15, 2023
9:30 am
moveyourmoney
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KamWest said

I pick up my certified cheques at CIBC, anything mailed out I have the option of picking up at CIBC. The phone rings at the same call centre except a separate line.

I get what you are saying in the close relationship between the two.
However, just to be clear, you’re not suggesting that you can do your Simplii banking at CIBC or call in to a CIBC csr for assistance with your Simplii accounts, correct? Nice that CIBC acts as a pickup point but I just want to ensure that there’s no misinterpretation on the service offering between the two. I would imagine that CIBC and Simplii have to maintain some type of organizational separation…whether that’s a management choice or rules that apply, I’m not sure. My experience with the two is that they generally try to stay in their own lanes.

August 16, 2023
5:47 am
Norman1
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moveyourmoney said

And you probably do your Simplii banking at the CIBC counter and call in to the CIBC to help you with your Simplii accounts…all the same, right.

Doesn't matter that CIBC's Simplii-branded products don't come with full access to the CIBC branches and are serviced by a different phone number.

Just like it doesn't matter that Air Canada economy class tickets don't come with access to the Air Canada Maple Leaf Lounges.

As KamWest described, the differences between the CIBC-branded and Simplii-branded products from CIBC are price and features. CIBC's Simplii-branded products don't come with full CIBC branch access and, in return, cost less in service fees and pay more in interest.

August 16, 2023
7:00 am
savemoresaveoften
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moveyourmoney said

KamWest said
I would imagine that CIBC and Simplii have to maintain some type of organizational separation…whether that’s a management choice or rules that apply, I’m not sure. My experience with the two is that they generally try to stay in their own lanes.  

Its the same phone staff, same back office, Simplii is just a digital "online only" marketing name for CIBC essentially. Its a " virtual branch" transit number. As to why it costs less to operate, it is not having an actual physical branch BUT at thes same time being able to reach out to any non local customers, thats where the savings are coming from.

Same as you can have your telco being Fido, when you call in for technical support, you are speaking to Rogers tech support. Fido tech support does not 'exist' in reality.

August 16, 2023
11:12 am
moveyourmoney
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There’s no use responding to the know it alls that live on this site. It’s hilarious though how they all jump in and provide the wrong information.
Just to clarify for everyone else so you get the correct info. Simplii is a separate division of CIBC. If you try to do your Simplii or CIBC banking…let’s say, call in to Simplii and ask if they can help you with your CIBC account, they will tell you they cannot help with that. If you ask to be transferred, they will tell you they cannot. You will have to contact CIBC directly. If you go into a CIBC branch and ask for help with your Simplii account, they will tell you they cannot. It’s that simple. Wow!

August 16, 2023
11:36 am
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canadian.100 said
What do you mean by going sideways? CIBC made a PROFIT of over $9 Billion in 2022 (i.e. about $6 Billion after income taxes.) So if CIBC's profit goes "sideways" (your expression) in 2023 to say $7 Billion before income taxes, are your really going to be that worried about CIBC (and Simplii). I won't.
 

Profitability isn't a measure of FI's stability. There's a variety of things a bank can do to turn quickly from profitability to insolvency. Sometimes the very thing that's turning those huge profits ends up being the thing that sinks them. Riding a bubble can yield huge profits. But if the institution gets in too deep and the bubble pops before they get out, there can be a world of hurt in store.

Lehman posted record profits from 2005 to 2007. Their net profit in 2007 was $4.2 billion. One year later it ceased to exist.

Does that mean that CIBC is at risk? No. It's just a warning that profitability is not a good measure of insolvency risk.

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