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SImplii Financial - 3.0% Interest on New Deposits until February 28, 2018
November 4, 2017
11:41 am
Norman1
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2of3aintbad said

We'll see in March, but I think that you should not compound the 2% column, instead:
31-Dec-2017 31 0.169863%
31-Jan-2017 31 same as above
28-Feb-2017 28 0.153425%
Total 0.6575%

The 2% promotional interest was not compounded. It is not paid during the period. I did not add the accrued promotional interest to the balances used to calculate regular 1% interest and 2% promotional interest.

The regular 1% interest does compound. I added it to the account balance at the end of each month which sets the account balance for the next month.

Consequently, both the promotional interest, as well as the regular interest, for December is calculated on the account balance of 100.0821…% and not 100%. For the month of January, both would be calculated on the account balance of 100.1671…%.

I didn't see any exclusion from the Additional Balance in the fine print for the regular interest. Just an exclusion for existing money in a Simplii Financial account as of October 31:

1. The Promotional Interest is calculated on the portion of the Eligible Savings Account’s average daily closing balance during the Offer Period that exceeds the closing balance as at October 31, 2017 (the “Additional Balance”) to a maximum of $500,000 in Additional Balances across all of an account holder’s Eligible Savings Accounts. If an Eligible Savings Account is overdrawn as at October 31, 2017, the closing balance is deemed to be $0.00. Promotional Interest will not be paid on existing funds that were in a Simplii Financial account as at October 31, 2017 and are transferred to an Eligible Savings Account.

November 4, 2017
2:13 pm
2of3aintbad
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Yes, Norman1, that wording suggests that regular interest will be treated the same as new deposits and your formula is correct.

November 5, 2017
7:33 pm
implode
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Ooh, I was on vacation so in a way, it's fortunate my balance was barely over $10 😛 Time to move money from Tangerine over.

November 6, 2017
5:22 am
bhuc
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1. The Promotional Interest is calculated on the portion of the Eligible Savings Account’s "average" daily closing balance during the Offer Period that exceeds the closing balance as at October 31, 2017 (the “Additional Balance”) to a maximum of $500,000 in Additional Balances across all of an account holder’s Eligible Savings Accounts.

So I understand this to mean they calculate the average closing balance over the 120 days (ACB) , then they calculate the promotional interest as
(ACB * 2.0% / 365 * 120)

November 6, 2017
9:58 am
Loonie
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I think you're right, bhuc. Their wording and punctuation etc., cut-and-pasted:
"The Promotional Interest is calculated on the portion of the Eligible Savings Account’s average daily closing balance during the Offer Period that exceeds the closing balance as at October 31, 2017 (the “Additional Balance”) to a maximum of $500,000 in Additional Balances across all of an account holder’s Eligible Savings Accounts."

So, if you didn't put in your max deposit on the first day and leave it there for the duration, you've already lost, it seems. It's essentially a GIC that was only available for one day, and progressively discounted every day thereafter for later investments.
I am reminded of why I never opened an account with PC.sf-frown

November 6, 2017
4:58 pm
Norman1
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Using average balance is mathematically identical to using daily balance accrual.

For example, the interest for a three-day period with daily closing balances b1, b2, and b3:

(b1 * 2%/365) + (b2 * 2%/365) + (b3 * 2%/365)
= (b1 + b2 + b3) * 2%/365
= (b1 + b2 + b3) * 1 * 2%/365
= (b1 + b2 + b3) * 3/3 * 2%/365
= (b1 + b2 + b3) / 3 * 3 * 2%/365
= (average of b1, b2, and b3) * 3 * 2%/365
= (average of b1, b2, and b3) * 2%/365 * 3

November 6, 2017
8:48 pm
Loonie
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as my dad would have said, "Son of a gun!"
Why can't they use the same language as everyone else, then?

November 7, 2017
7:48 am
Norman1
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There is a subtle difference that shows up when there are daily closing balances that are below the closing balance of October 31.

With the average balance method, some of the Promotional Interest accrued to date is "taken back" should one withdraw, during the Offer Period, all the new money plus some of the original money that was there at the close of October 31.

November 7, 2017
11:14 am
meghan88
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I filled in their online application form last week and never received a response. So I called them today and apparently they never received it. Then they told me that if I wasn't an existing client, they'd need all kinds of other info (e.g., credit check), so that they couldn't have done it online anyway.

So in the meantime, my personal info is out there in the ether somewhere.

Wondering if anyone else has had a similar experience?

November 7, 2017
12:51 pm
JenE
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Meghan88: this was spouse’s response from Simplii:

We just wanted to let you know that we’ve received your online application and it’s being processed. Once it’s approved, you’ll receive your Welcome Package in the mail which will have your bank card and account open documents.

Further information you need to get started will be emailed to you soon.

If you have any questions, feel free to contact us at any time.

November 7, 2017
1:12 pm
savemoresaveoften
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Norman1 said
There is a subtle difference that shows up when there are daily closing balances that are below the closing balance of October 31.

With the average balance method, some of the Promotional Interest accrued to date is "taken back" should one withdraw, during the Offer Period, all the new money plus some of the original money that was there at the close of October 31.  

hmm that doesnt sound fair. Under that scenario, wouldn't the extra balance just sets to zero for the promotional int period. What you earn previously should not be "taken away" just because you withdraw some of original money.

e.g.
original money = 10k
day1 new money = 50k
day1 thru 10 promotion interest = 50k X 2% X 10/365
day11 withdraw = 55k
day11 promotion interest = $0, day1 thru 10 earned $ will be paid out at end of promotion

November 7, 2017
1:55 pm
Bill
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savemoresaveoften, promo interest is not calculated daily. In your case (let's pretend the whole promo period is 11 days) after 11 days your average closing daily balance for the period would be $55K. (After 10 days it had been $60K.) So promo interest would be calculated for 11 days on $45K, the average daily balance in the period that exceeds the original $10K balance.

November 7, 2017
6:26 pm
Norman1
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savemoresaveoften said

hmm that doesnt sound fair. Under that scenario, wouldn't the extra balance just sets to zero for the promotional int period. What you earn previously should not be "taken away" just because you withdraw some of original money.

e.g.
original money = 10k
day1 new money = 50k
day1 thru 10 promotion interest = 50k X 2% X 10/365
day11 withdraw = 55k
day11 promotion interest = $0, day1 thru 10 earned $ will be paid out at end of promotion  

As Bill calculated, the average of the closing balances for the 11 days would be $55K. Promo interest would be paid on $55K - $10K = $45K for 11 days.

That had the effect of negative day11 promo interest, calculated on a new money balance of -$5K and not zero:

$45K x 2% x 11/365
= $495K x 2%/365
= ($500K - $5K) x 2%/365
= ($50K x 10 - $5K) x 2%/365
= $50K X 10 x 2%/365 - $5K X 2%/365

November 7, 2017
6:44 pm
Bill
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Right. The 2% interest on $50K over 10 days would have been $27.40. The 2% interest on $45K over 11 days would have been $27.12. Again, you're not doing the calculation or "earning" promo interest as you go along, the promo interest is calculated at the end of the promo period based on the amount the daily average closing balance over the entire period exceeds the Oct 31 balance.

November 8, 2017
12:57 pm
savemoresaveoften
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In my example, I thought the average promotional balance will be calculated as follows, assume 11day is the total promotional period:

$50k X 10 / 11 = $45,454.55 (10day at $50k over, 1day at $0)
promotion interest on that will be $45,454.55 * 2% * 11/365 = $27.4

This is the same as earning 2% on $50k for 10 days
$50k X 2% * 10/365 = $27.40 (day 11 earn $0 promotional interest since below original balance)

In other words, just the fact that day 11 withdrawl results in balance below original balance does not penalize you on the promotional interest already earned.

November 8, 2017
2:15 pm
Bill
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savemoresaveoften, I understand what you thought, but it's wrong. I say again, you are not earning promo interest as you go along day by day, it is not a day by day calculation.

They are not calculating the promotional (over Oct 31) balance every day. They are calculating your TOTAL balance ever day over the promo period, then taking that average TOTAL balance (at the end of February 2018) for the entire promo period and comparing it to your Oct 31 balance, then paying you 2% AT THAT TIME on the excess, if any.

If, at the end of the promo period, the average total balance over the promo period is equal to or less than Oct 31 balance, there is no promo interest.

I think you're trying to calculate promo interest on a basis similar to regular interest, day by day, but Simplii has decided to calculate promo interest as Norman1 and I have described. I'll leave it to the liberal-minded among us to decide whether or not that's "fair"!

November 9, 2017
12:33 pm
savemoresaveoften
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I see what you mean now. Am I correct to say as long as your balance never dips below the Oct31 balance, what you earn in promotional interest is the same daily promotional interest on daily excess balance ?

November 9, 2017
2:00 pm
Norman1
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That's correct. Both

  1. (average of daily closing balances over offer period) above Oct. 31 closing balance and
  2. portion of daily closing balance above Oct. 31 closing balance, if any,

methods will give the same promotional interest when none of the daily closing balances fall below the Oct. 31 balance.

November 12, 2017
11:05 am
Yatti420
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Simplii being added to the list?

November 12, 2017
11:40 am
Bill
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Yatti420, Simplii's posted regular rate is 1%, so I believe that means it's not competitive, that being a criterion for the chart. The 3% promo until end of Feb 2018 is listed in the Promos section.

Please write your comments in the forum.