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PC Financial launches 3.1% "new net deposit" promo
September 13, 2014
10:31 am
Norman1
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Loonie said

Norman1 said
....
I think Tangerine is offering monthly compounding on their offer at the normal (1.3%) rate. This is condition 12 of the Tangerine Bank 3% Fall Savings Sale:

12. All interest payments are ineligible for the purposes of calculating Additional Interest and will not be calculated for the purposes of determining eligible daily balances. In other words, any interest paid into an Applicable Account, including Additional Interest, will not be treated as a new deposit for subsequently calculating Additional Interest payments.

It just says interest paid, including the Additional Interest that tops the rate up to 3%, into the account won't earn any Additional Interest to top the interest-on-the-interest up to 3%.

To my ears, when it says "All" interest payments are ineligible, that includes the basic rate as well. You seemed to agree with that in your first comment but not in your second, so I am confused.
At best, I find it unclear. Probably it would be best to give them an example by email and see what their calculation works out to.

To the ears, it does sound that way. But, to the eyes there is a difference.

In the offer terms, notice that the phrase is "Additional Interest" with capitalization and not "additional interest". Both "Additional Interest" and "additional interest" sound the same. But, the capitalized phrase has special meaning and refers just to the extra interest to top up the rate to 3%:

4. “Additional Interest” shall be the difference between 3% and the Bank’s standard posted rate of interest payable on Applicable Accounts. For example, if on September 1, 2014, the Bank’s posted rate of interest on Applicable Accounts is 1.30%, the difference between the posted rate and 3% is 1.70%, therefore the Additional Interest rate payable on that date would be 1.70% (3% - 1.30% = 1.70%).

Additional Interest Earned Daily = Net New Deposit Dollars X (0.0170 ÷ 365)

Perhaps you can hear what I see if I replace the special term "Additional Interest" with "Top-up Interest" in condition #12 as follows:

12. All interest payments are ineligible for the purposes of calculating Top-up Interest and will not be calculated for the purposes of determining eligible daily balances. In other words, any interest paid into an Applicable Account, including Top-up Interest, will not be treated as a new deposit for subsequently calculating Top-up Interest payments.

September 13, 2014
12:12 pm
Loonie
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Sorry, no, I still don't see it the same way as you, Norman.
To me, when it says "ALL interest payments are ineligible...", then it refers to both the top-up interest and the basic interest. Further, "ANY interest paid into an Applicable Account..." will not get top-up interest.

September 13, 2014
12:16 pm
Norman1
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gocanada said

I called in to ask about the difference between the way they calculate interest normally (daily) vs with this promotion (average daily closing balance). They did confirm that it is different, and that it works out worse for us. When I attempt to put this into a spreadsheet, it appears to work out the exact same, with the exception of compounding interest. Is there more to it than that?

It will work out to be exactly the same if one's daily closing balance during the promotion never drops below one's balance at the start of the promotion. I suspect there will be a difference in a case like this where some of the daily closing balances drop below the starting balance:

$1,000 Closing balance before start of promotion
$2,000 Promotion Day #1 closing balance
$500 Promotion Day #2 closing balance
$500 Promotion Day #3 closing balance

Average balance is ($2,000 + $500 + $500) ÷ 3 = $1,000. That would result in no additional interest paid under average balance method. Additional interest would only be paid under that method on part of average balance, in this case $0, above the $1,000 starting balance.

Under a daily balance method, there would be

  1. a day of additional interest paid for Day #1, when account balance of $2,000 was $1,000 above the $1,000 starting balance, and
  2. no additional interest paid for Day #2 and Day #3, when account balance was below the $1,000 starting balance.
September 13, 2014
12:33 pm
Norman1
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Loonie said

Sorry, no, I still don't see it the same way as you, Norman.
To me, when it says "ALL interest payments are ineligible...", then it refers to both the top-up interest and the basic interest. Further, "ANY interest paid into an Applicable Account..." will not get top-up interest.

Maybe we actually agree and don't disagree. I agree that "All interest payments" refers to both top-up and basic interest. I also agree that any interest won't qualify for top-up interest. After all, they will be credited after the September 15 deadline.

I thought you had meant that all interest payments won't get basic interest either. I think interest payments, basic and top up, will still earn basic interest.

I read "All interest payments ... will not be calculated for the purposes of determining eligible daily balances" as meaning all interest payments won't be calculated only for determining eligible daily balances for the 3% offer. Interest payments will still be calculated and credited for the account's basic interest.

September 13, 2014
2:48 pm
Norman1
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Careful about moving around the money between PC Financial acocunts for the PC Financial 3.1% offer.

Condition #4 excludes funds transferred from one Eligible Account to another from the offer:

4. The Offer applies to all net new deposits made during the Enrolment Period to Eligible Accounts, not to exceed ..., and is calculated based on the portion of the Eligible Account’s average daily closing balance during the Offer Period that exceeds the closing balance as at September 5, 2014 (the "Additional Balance"). .... Promotional Interest will not be paid on funds that are transferred from an existing Eligible Account to another existing or new Eligible Account.

Should one be adding money into an Eligible Account during the Enrollment Period (September 6 2014 to September 30 2014), make sure one does it directly into the account. There may be no promotional interest earned if one, let's say, deposits the money first into one's No fee Bank account (one Eligible Account) and then transfers it to one's Interest Plus savings account (another Eligible Account):

September 13, 2014
5:57 pm
Loonie
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I think we pretty much agree now, Norman.sf-smile
I have to remain suspicious of an institution which can't speak in plainer language! It shouldn't be this hard to know where one is at.

September 13, 2014
11:17 pm
Jack Manning
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Loonie, the more complicated and more legal language they can put in their contracts, the more people will not read them. Fine print is the other gift for companies that keeps on giving.

This is why short term gimmicks, promos are the big banks, corporations bread and butter. How else are they going to get and stay so big. Remember, they have to compete in a global economy with other big boys like them doing the same things.

As consumers, depositors, investors, we are all at their mercy. You don't see very many smaller companies, financial institutions like Oaken or Peoples Trust and others like Manitoba credit unions and other credit unions in Canada doing this kind of stuff and even worse.

September 14, 2014
9:46 am
Norman1
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Brian said

....

I phoned PCFinancial today to ask for clarification of the condition in 4. i.e. Promotional Interest will not be paid on funds that are transferred from an existing Eligible Account to another existing or new Eligible Account. According to the agent I spoke to - if you deposit NEW money i.e. from outside source, into any one of your eligible accounts and you transfer it to another eligible account it WILL get the bonus interest - The point PCF is trying to make is that no bonus interest will be paid on funds just being shifted between eligible accounts, that is not considered NEW money. That makes sense.

I actually read Norman1's last sentence to the PCF agent who said that interpretation is not correct - it does not matter if you deposit NEW money into your no fee chequing or your savings acct and if you then move the NEW funds between those accounts you will get the bonus interest because they are able to track NEW money across your eligible accounts.

Thanks, Brian. It's great that PC Financial can track the NEW funds and still pay bonus interest on them should they be moved between the Eligible Accounts. sf-smile

If one has both their chequing account and Interest Plus account, I think it is preferable to move any NEW funds into the Interest Plus savings account. One would receive 1.3% of the 3.1% each month and the remaining 1.8% of the 3.1% in December. In their chequing account, one would receive just 0.05% to ½% of the 3.1% each month and the remaining 2.6% to 3.05% of the 3.1% in December.

I remember reading about a Royal Bank offer for their e-savings account. There was doubt whether or not new money deposited into a Royal Bank chequing account first and then tranferred to the e-savings account would qualify for bonus interest: RedFlagDeals: RBC 2% E-Savings Account Promotion - Summer 2014.

September 14, 2014
10:11 am
Norman1
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Loonie said

I think we pretty much agree now, Norman.sf-smile
I have to remain suspicious of an institution which can't speak in plainer language! It shouldn't be this hard to know where one is at.

I think it's just their legal department and not the entire Tangerine Bank!

I still find the second part of the sentence is rather odd:

12. All interest payments are ineligible for the purposes of calculating Additional Interest and will not be calculated for the purposes of determining eligible daily balances. ....

It suggests that any interest payments are completely disregarded for determining the eligible daily balances for the offer. Withdrawals certainly won't be disregarded.

So, does that mean any withdrawals will reduce the eligible daily balance for the offer even though the withdrawals may only be of the interest earned? sf-confused

September 14, 2014
10:55 am
Loonie
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I would say that it does. This is part of what I effectively meant earlier, but would see it as simply another aspect of the refusal to compound.
I don't have time at the moment to go back and check the wording but it would seem logical that you would receive the basic interest at the end of each month and that you could then remove it and deposit it somewhere else for better return with no ill effect on utilizing this offer. I would think they would have to give you the regular basic monthly interest in the same way they would have to give it to any account, whether or not it was in receipt of additional deposits. It doesn't amount to anything much financially, but, still...

I understand that it's legal gobbledygook, but there is good and bad even within that. If they wanted to be clear, they could have explained it better in an FAQ, but it seems that they don't - assuming they actually know what they are doing. If not, then that's another reason not to patronize them.

September 14, 2014
12:28 pm
James
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Hi all,

I spoke with Tangerine and can clarify this for you and provide a bit more information. The interest on your deposit does not earn the bonus interest and does not count towards your daily balance for calculating the bonus interest, but even worse than this: it was suggested that we might take the interest out of the account and put it somewhere else - if we do this they will count that as a withdrawal of principal investment. So, let's say you make $300 in interest each month, and withdraw this. You will then be ineligible for bonus interest on $600 of your originally invested funds.

All withdrawals are deemed to be withdrawals of principal investment first.

This may seem like semantics but for who will be investing large amounts and withdrawing over the 3 month period, this could result in significant loss of interest. So I thought I'd let you all know.

September 14, 2014
5:18 pm
Loonie
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Thanks, James, for the clarification.

September 14, 2014
9:39 pm
Jack Manning
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Loonie, cashable GIC's or redeemable GIC's unlike higher interest savings accounts do not compound interest every month or the number of days in the month which are usually 30 or 31 days with February as the exception.

The only time they would compound interest is if cashed or redeemed and the new balance consisting of principal and interest for a period of 30, 60, 90 days or depending how long the accrued interest was.

Term deposits on the other hand would compound interest by the specific term one chooses. If you get a 1.75%, 30 days term deposit at Oaken Financial for instance it would compound at 1.75% if their rate does not change but if you chose a 1.85%, 180 days term deposit at Oaken Financial, it would compound after 180 days at 1.85% assuming the rate did not change.

September 14, 2014
10:34 pm
Norman1
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James said

I spoke with Tangerine and can clarify this for you and provide a bit more information. .... it was suggested that we might take the interest out of the account and put it somewhere else - if we do this they will count that as a withdrawal of principal investment. So, let's say you make $300 in interest each month, and withdraw this. You will then be ineligible for bonus interest on $600 of your originally invested funds.

All withdrawals are deemed to be withdrawals of principal investment first.

This may seem like semantics but for who will be investing large amounts and withdrawing over the 3 month period, this could result in significant loss of interest. So I thought I'd let you all know.

Thanks, James. I was afraid that the wording of Condition 12 would mean that. sf-frown Attempts to withdraw any earned interest during the offer period will, instead, end up withdrawing, first, any net new principal qualified to earn the Tangerine 3% bonus rate.

Looks like one needs to be careful not to make any withdrawals from an eligible Tangerine account until after the offer ends November 30.

September 17, 2014
7:03 am
SlowPoke
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Loonie said

Also, I would be careful in regards to the sentence which starts "to participate in the Offer...". It specifies 3 methods: going through the website offer (which appears to mean making a phone call, as there is no link to sign up for the promo online), going to a PCF pavilion, and talking to a rep on the phone. It does NOT say that if you simply transfer the money and don't do any of the above that you will get the bonus. In other words, it appears that you have to talk to someone at PCF personally.

Hi Loonie

Having to call them to sign up for offers was a hassle so some time ago I had sent them a suggestion to let users sign up for offers on line when we log in to our accounts. Now I imagine others likely sent them this same suggestion, and It looks like they listened..

When I signed into online banking and clicked the sign me up button the page with the T&C's was displayed, on it was a number to call that was boldly displayed. So I expected I would still have to call them

However, the next morning the email below arrived. So we tried the same process with another account with the same email the next day.

"Confirmation: Your new interest rate is now in effect.

Get ready to watch your savings grow. You're now earning 3.1% interest* until December 15, 2014 on new deposits into any of these accounts:

• Interest Plus™ Savings Account
• No Fee Bank Account
• Interest Plus™ RRSP
• Tax-Free Interest Plus™ account

Simply deposit new money into any of these accounts and
start earning more interest today. "

September 17, 2014
5:11 pm
LUKING
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Please don't forget to check following thread to make an informed decision about the difference between banks that offer promotional offers vs those who offer promos but have consistently paid interest more than any other bank.
https://www.highinterestsavings.ca/forum/pc-financial/horrible-experience-with-pc-finacial/
I prefer a bank that I can trust. And trust has to be earned by CONSISTENCY, not by promos alone.

September 18, 2014
6:36 am
Bill
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The Promos tab and News sidebar say new deposits to PC for the 3.1% rate have to be made by Dec 15. The way I read PC's offer is they have to be made by Sept 30.

September 18, 2014
6:43 am
Peter
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Bill said

The Promos tab and News sidebar say new deposits to PC for the 3.1% rate have to be made by Dec 15. The way I read PC's offer is they have to be made by Sept 30.

Thanks for pointing that out! I've updated the wording now.

September 30, 2014
10:13 am
James
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The above is true and I'd like to point out that anything you put into PCF after today earns 1.3% (NOT 3.1%). The same goes for Tangerine. The customer service reps don't seem to know this as they've stated to me multiple times that since we've 'enrolled' in the offer, we earn interest on ALL new deposits before December 15. This is not true. Whatever we put in after today does not earn bonus interest.

November 5, 2014
7:54 pm
Greg Franklin
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Ellen Roseman has an online article about high interest savings accounts promos, offers, http://www.thestar.com/busines.....seman.html.

She is basically warning to watch out for traps in these high interest savings accounts promos, offers.

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