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Earn 5.15% on a 9 month GIC
April 19, 2024
5:20 am
Alexandre
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Got email from Tangerine yesterday, promoting their 5.15% 9 months GIC.

Not a rate to be overly excited about, but for someone who is on Tangerine 4.75% HISA promo and thinking to push some of interest income tax to the 2025 tax year this could be an option to consider.
If my math is right, this GIC will mature in January 2025 and if I am not mistaken all its interest will be reported in 2025 tax return.

April 19, 2024
5:32 am
savemoresaveoften
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be mindful as it may be a rate trap as it will mature at the time when BoC are in the rate cutting cycle.
Personally I am betting they will wait another meeting or 2 before cutting, with first cut around fall/winter time.

April 19, 2024
10:16 am
canadian.100
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savemoresaveoften said
be mindful as it may be a rate trap as it will mature at the time when BoC are in the rate cutting cycle.  

"rate trap"??
It is a good rate if you want or need to have the cash in January 2025.
Otherwise if you think it's a "trap" go for 2 or 3 year GICs. Entirely up to you. Hard to time interest rates. I agree rates are likely to be decreasing late in 2024 and early 2025. Time to go longer term if GICs turn your crank and you don't need the cash in the short term. (short term = under one year)

April 19, 2024
6:04 pm
Loonie
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It's a good rate if you need a 9 month rate.
For people who like the Tangerine savings promos and don't want to go much over CDIC limits, however, buying a GIC from them can be limiting.

April 19, 2024
9:31 pm
MarkFog
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canadian.100 said

"rate trap"??
It is a good rate if you want or need to have the cash in January 2025.
Otherwise if you think it's a "trap" go for 2 or 3 year GICs. Entirely up to you. Hard to time interest rates. I agree rates are likely to be decreasing late in 2024 and early 2025. Time to go longer term if GICs turn your crank and you don't need the cash in the short term. (short term = under one year)  

I recall financial analysts made predictions for a rate cut at the end of 2023. The expected interest rate cuts never came. 2025 is slated to be an election year. Do Feds want inflation to creep back up again? I think not. I expect a hold.

April 20, 2024
6:01 am
canadian.100
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MarkFog said

I recall financial analysts made predictions for a rate cut at the end of 2023. The expected interest rate cuts never came. 2025 is slated to be an election year. Do Feds want inflation to creep back up again? I think not. I expect a hold.  

I would be very happy with that - I will continue with GICs - able to continue to get 5.48% for one year and 18 month terms. Also I have reset preferred shares which will be resetting in 2024 and 2025 which means higher dividends (perhaps 6%) for the next 5 years on those shares, since the increases are based on formula with a base rate plus 5 year Govt bond rate.
So it would be a win-win for me for 2024 and 2025 if rate cut does not happen in those years, as you are suggesting.

April 20, 2024
6:50 am
kesa
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April 20, 2024
8:47 am
canadian.100
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kesa said
https://mcanfinancial.com/our-businesses/mcan-wealth/gicrates/  

Has anyone signed up with MCan @ 5.50? When I got to the FLINKS process to set up the external link to pull the funds, I decided not to proceed.

April 20, 2024
9:48 am
RetirEd
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Interest rates have historically been at lows during US presidential election years, often falling as the vote approaches.

RetirEd

April 20, 2024
10:32 pm
smayer97
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RetirEd said
Interest rates have historically been at lows during US presidential election years, often falling as the vote approaches.  

That is a complete misconception... there are many election years when interest rates increase too.

April 20, 2024
10:35 pm
smayer97
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Interest rates will fall when the short term bond market shows enough of a drop vs the present CB rate. Until then, the CB is most likely to hold. The market needs to have enough breathing room beforehand. Most commonly, there needs to be at least a 0.25% differential before the CB will adjust its rate.

April 21, 2024
10:18 am
RetirEd
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I didn't say always!

RetirEd

April 21, 2024
1:11 pm
smayer97
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Your implication is that there is a meaningful correlation... there simply is not, is my point.

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