GIC Rates Big Jump Up To The Top | Page 4 | Tangerine Bank | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
GIC Rates Big Jump Up To The Top
March 28, 2020
12:34 pm
Bud
Member
Members
Forum Posts: 1065
Member Since:
February 20, 2018
sp_UserOfflineSmall Offline

Agree with Norms caution. I've felt sometimes the CUs are pushed a bit too much on this forum.

Any comments on dgcm and dico. Do Manitobans use CUs more they seem to have more assets per capita. Do borrowers in smaller communities tend to be more reliable

https://www.cucm.org/uploads/1/2/4/3/124349772/arf19_v1.pdf  

https://www.fsrao.ca/media/1451/download  

"And while some have suggested the DGCM doesn’t enjoy the same implicit government backing of the CDIC, a Crown corporation, Vernon MacNeill, the Manitoba insurer’s CEO, points out the province wrote the DGCM’s governing legislation and therefore could likely be called upon in a crisis."

https://www.google.com/amp/s/www.macleans.ca/economy/business/keystone-coffers/amp/

March 28, 2020
1:55 pm
Loonie
Member
Members
Forum Posts: 6051
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

I don't feel comfortable keeping much money in non-redeemable GICs in other provinces. We only have low five figures in MB non-redeemable GICs, and only because it was a rate we couldn't refuse. It's unlikely we will renew them. Matures in 2023 - I hope!

March 28, 2020
1:56 pm
happyavocado
Member
Banned
Forum Posts: 10
Member Since:
March 27, 2020
sp_UserOfflineSmall Offline

Norman1 said

Do you? You are very naive if you think a company won't walk away from a $5 billion mess if its not legally obligated to it.

Companies have walked away from smaller obligations. A reputation is only worth so much.  

Naive? You're the one who said there would be NO reputation damage. You didn't say there would be a sustainable or tolerable or functional level of reputation damage. You said there would be none.

Just another example of you pontificating around this place making absolute statements. Must be nice to live in such a binary world. One might even call it very naive.

March 28, 2020
2:29 pm
Kidd
Member
Members
Forum Posts: 492
Member Since:
February 27, 2018
sp_UserOfflineSmall Offline

Loonie, i ladder the gic's and that 3% for 3 was an offer i couldn't pass. how will that 3% deal look next week, or in 6 months? who knows. 3 years out is as far as i would go, during these troubled times.

i think a re evaluation of global currency is going to happen, so what we think we have... will actually amount to nothing. I'm NOT going back to work, this old dog has had his day.

March 28, 2020
2:34 pm
savemoresaveoften
Member
Members
Forum Posts: 282
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

If Tangerine is $5B in the hole, then yes BNS may have no choice but to let it fail. I think of it as if Tangerine is so deep in $hit, chance are the other Cad banks are in similar situation and BNS will not have the money to save Tang even if it wants to.

Tang's biggest exposure is mortgage and housing related products, so imagine how much better off the other sch 1 banks can be in reality if it costs Tang that much...

With the BoC essentially back stopping mortgage thru bond purchase, Tang is either as safe as the other cad banks, or all are doomed to fail.

I bet cad banks will be fine cuz if they arent, losing money on my deposit is not my main concern anyway (food, safety comes first.) Its like zombie apocalypse and money becomes irrelevant.

March 28, 2020
2:53 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3440
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

savemoresaveoften said
If Tangerine is $5B in the hole, then yes BNS may have no choice but to let it fail. I think of it as if Tangerine is so deep in $hit, chance are the other Cad banks are in similar situation and BNS will not have the money to save Tang even if it wants to.

What do you mean by "$5B in the hole"? Last I checked, which was last fall, Tangerine had ~$5 billion in residential mortgages, and ~$39 billion in customer deposits, ~$27-30 billion of which was personal deposits and ~$10 billion of which was business/commercial deposits. This is balance sheet data. Tangerine is not losing money on the income/expenditure side, I assure you. They do about $500 million in Net Income (profit) annually, though that's some down somewhat whilst revenue has risen due to technology investments, spread compression, marketing initiatives, and new product launches. Still, I think they're doing about $250-300 million in profit, but haven't checked last year's year end numbers.

Tang's biggest exposure is mortgage and housing related products, so imagine how much better off the other sch 1 banks can be in reality if it costs Tang that much...

Not seeing what you're meaning here. Tangerine's mortgage book is healthy with lower loss ratios than the Big 5, which have between $200-300 billion in residential mortgages on their books.

With the BoC essentially back stopping mortgage thru bond purchase, Tang is either as safe as the other cad banks, or all are doomed to fail.

I bet cad banks will be fine cuz if they arent, losing money on my deposit is not my main concern anyway (food, safety comes first.) Its like zombie apocalypse and money becomes irrelevant.  

On the first point, it's not that simple.

On the second point, I also believe the banks will be fine. They will not lose your deposits; Norman1 can correct me, but I am almost positive no bank failure has been because a bank has absconded with customers' deposits. The reason banks commonly fail is because they become insolvent and cannot raise capital to cover losses on their loan books.

Cheers,
Doug

March 28, 2020
3:34 pm
Loonie
Member
Members
Forum Posts: 6051
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Kidd said
Loonie, i ladder the gic's and that 3% for 3 was an offer i couldn't pass. how will that 3% deal look next week, or in 6 months? who knows. 3 years out is as far as i would go, during these troubled times.

i think a re evaluation of global currency is going to happen, so what we think we have... will actually amount to nothing. I'm NOT going back to work, this old dog has had his day.  

Welcome back, Kidd! Where've you been?

I loaded up all the 3-yr money I wanted for this year back in January,@ 3, so there's nothing in it for me that way. I have another pocket of money that is only used for one-years, and I will probably put some in there as I am not confident we'll see anything higher this year. I can probably put more in later if something better should come up.

I agree that the longer term looks very problematic. It's a pretty safe bet that the average person will suffer more in the long run than the big corporations. No matter what the gov't may proclaim, these handouts, whether to individuals or businesses, are effectively loans that we will all be expected to pay off or at least carry as liabilities.
The only escape I see is that most countries will be in the same situation. I'm not sure anybody else's currency is any better. There could be a global rejigging of debt arrangements such as happened after the World Wars, I suppose. Surely the economics of this event are not dissimilar in scale to a world war - or will be before it's over. But I'm no economist.

March 28, 2020
4:14 pm
Norman1
Member
Members
Forum Posts: 3060
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

happyavocado said

Naive? You're the one who said there would be NO reputation damage. You didn't say there would be a sustainable or tolerable or functional level of reputation damage. You said there would be none.

Just another example of you pontificating around this place making absolute statements. Must be nice to live in such a binary world. One might even call it very naive.  

The reputation damage is just in the minds of people like yourself.

Insurance companies walk away from non-obligations routinely, with no reputation damage.

A friend had a serious fire that destroyed his business. Insurer refused to pay full costs to restore the business, even though he bought replacement value insurance. Imagine that! Friend was livid and threatened to sue. Insurance company said go ahead.

When he saw his lawyer, he was told to take what insurance company was offering and move on. He had bought something like $500,000 of coverage. Doesn't matter if it was actually going to cost $800,000 to rebuild. He was underinsured.

Insurance company is only legally obligated to pay up to the coverage he bought: $500,000. And $500,000 was exactly what the insurance company offered him.

You think the insurance company was going pay out another $300,000 to my friend just to be nice and avoid some "reputation damage"?

March 28, 2020
4:32 pm
Norman1
Member
Members
Forum Posts: 3060
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

savemoresaveoften said
If Tangerine is $5B in the hole, then yes BNS may have no choice but to let it fail. I think of it as if Tangerine is so deep in $hit, chance are the other Cad banks are in similar situation and BNS will not have the money to save Tang even if it wants to.

Tang's biggest exposure is mortgage and housing related products, so imagine how much better off the other sch 1 banks can be in reality if it costs Tang that much...

One needs to be careful and not assume that whatever would wound Tangerine Bank would be systemic and would affect all the banks.

I'm thinking of Home Trust and its "phantom ticking" fiasco that nearly sunk it.

I did not hear of any other alternate mortgage lender being affected. No other lender had the problem with their underwriting staff ticking off applications as income verified when no verification was actually done.

March 28, 2020
6:20 pm
savemoresaveoften
Member
Members
Forum Posts: 282
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

Doug said

On the first point, it's not that simple.

On the second point, I also believe the banks will be fine. They will not lose your deposits; Norman1 can correct me, but I am almost positive no bank failure has been because a bank has absconded with customers' deposits. The reason banks commonly fail is because they become insolvent and cannot raise capital to cover losses on their loan books.

Cheers,
Doug  

Doug, I was only extending someone else's doomsday scenario where $5b was mentioned.

You mentioned they only have $5b in mortgage but a deposit base of $30B ? Given its 20x multiplier, they can lend out upto $600b. Wheres is the 600-5 loan goes ?

March 28, 2020
6:26 pm
savemoresaveoften
Member
Members
Forum Posts: 282
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

Norman1 said

savemoresaveoften said
If Tangerine is $5B in the hole, then yes BNS may have no choice but to let it fail. I think of it as if Tangerine is so deep in $hit, chance are the other Cad banks are in similar situation and BNS will not have the money to save Tang even if it wants to.

Tang's biggest exposure is mortgage and housing related products, so imagine how much better off the other sch 1 banks can be in reality if it costs Tang that much...

One needs to be careful and not assume that whatever would wound Tangerine Bank would be systemic and would affect all the banks.

I'm thinking of Home Trust and its "phantom ticking" fiasco that nearly sunk it.

I did not hear of any other alternate mortgage lender being affected. No other lender had the problem with their underwriting staff ticking off applications as income verified when no verification was actually done.  

For Tang I think we "can" safely assume whatever economic tsunami that hits Tangerine will hit other banks but not vice versa. This is because Tang does NOT have a capital market division, and all their exposures are in mortgage and other "simple" loan products. If it's firm specific practice such as fraud or similar fiasco like Home Trust, then it's a different story.

March 29, 2020
11:00 am
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3440
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

savemoresaveoften said

Doug, I was only extending someone else's doomsday scenario where $5b was mentioned.

You mentioned they only have $5b in mortgage but a deposit base of $30B ? Given its 20x multiplier, they can lend out upto $600b. Wheres is the 600-5 loan goes ?  

No, it's not that simple. The amount they can lend is determined by a series of complex calculations too complex for most or, more likely, all of us to understand (including me). sf-cool

Cheers,
Doug

March 29, 2020
11:05 am
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3440
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

Norman1 said
Uninsured Tangerine Bank deposits are like a Tangerine Bank bond. Without a DBRS debt rating, such deposits are then an unrated bond.

Yes, but the only reason Tangerine Bank deposits are notionally unrated by DBRS, or another ratings agency, is because they don't raise capital through the capital markets systems like Scotiabank does. I suspect ADS Canadian Bank deposits are unrated as well.

It's important for readers to understand the distinction between a deposit which is unrated and a deposit which is rated above or below investment grade.

Functionally, the rating of the parent company comes in to play in terms of likelihood of the parent company's failure. As well, one needs to consider Tangerine consists of mostly deposits...there's never been a bank failure in Canada, as far as I'm aware, because a bank absconded with customers' deposits. sf-cool

Cheers,
Doug

March 29, 2020
12:36 pm
Loonie
Member
Members
Forum Posts: 6051
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

It's also important to remember that ratings are only just that. They are not guarantees. Things change rapidly these days.
Biggest risk now, no matter where you put your money, IMO, is currency risk.

March 29, 2020
1:35 pm
ReX
Member
Members
Forum Posts: 72
Member Since:
April 28, 2017
sp_UserOfflineSmall Offline

Canadianbull said
I have no option other than wait. Bought 3months GIC with EQ bank 2 weeks ago. Definitely no one was expecting these rates from tangerine. sf-cool  

It will be interesting to see how long it takes for Tang to hit their intake target and if, in turn, it results in sudden recoil. I am not so certain this will be the case this time around; you may luck out. The offer may last well into July if Tang already suffered a serious drain and a dangerous amount of their GICs is up for maturity....hence the generous offer.

PT’s 1-year @3% lasted only few weeks despite of local pundits’ bold predictions of the campaign running into mid-March. They dropped the rate few times only days apart well before Feds and BoC pulled the rug from under all of us.

March 29, 2020
1:48 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3440
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

Loonie said
It's also important to remember that ratings are only just that. They are not guarantees. Things change rapidly these days.
Biggest risk now, no matter where you put your money, IMO, is currency risk.  

Well said, Loonie, on the risks. 🙂

Cheers,
Doug

March 30, 2020
1:08 pm
Save2Retire@55
Member
Members
Forum Posts: 668
Member Since:
January 3, 2013
sp_UserOfflineSmall Offline

I need this rate to stay till April 10th. I have GICs maturing with Oaken on April 20. Hopefully Tangerine keep the offer for 2 weeks. We shall see!

March 30, 2020
4:29 pm
gicjunkie
Ontario
Member
Members
Forum Posts: 362
Member Since:
November 7, 2014
sp_UserOfflineSmall Offline

Save2Retire@55 said
I need this rate to stay till April 10th. I have GICs maturing with Oaken on April 20. Hopefully Tangerine keep the offer for 2 weeks. We shall see!  

I believe Tang will hold a rate for you for 2 weeks. Just give them a call and wait the requisite 20-45 minutes for a CSR. I actually don't understand the relationship between the comments "I need this rate to stay till April 10th" and "GICs maturing with Oaken on April 20". If you are waiting for the Oaken funds to be available it's actually 3 weeks to wait. Good luck.

March 30, 2020
4:29 pm
Canadianbull
Member
Members
Forum Posts: 268
Member Since:
December 26, 2018
sp_UserOfflineSmall Offline

ReX said

It will be interesting to see how long it takes for Tang to hit their intake target and if, in turn, it results in sudden recoil. I am not so certain this will be the case this time around; you may luck out. The offer may last well into July if Tang already suffered a serious drain and a dangerous amount of their GICs is up for maturity....hence the generous offer.

PT’s 1-year @3% lasted only few weeks despite of local pundits’ bold predictions of the campaign running into mid-March. They dropped the rate few times only days apart well before Feds and BoC pulled the rug from under all of us.  

I hope your prediction is correct on this.

March 30, 2020
4:45 pm
Save2Retire@55
Member
Members
Forum Posts: 668
Member Since:
January 3, 2013
sp_UserOfflineSmall Offline

gicjunkie said

I believe Tang will hold a rate for you for 2 weeks. Just give them a call and wait the requisite 20-45 minutes for a CSR. I actually don't understand the relationship between the comments "I need this rate to stay till April 10th" and "GICs maturing with Oaken on April 20". If you are waiting for the Oaken funds to be available it's actually 3 weeks to wait. Good luck.  

Thanks. It is sad they disabled the Agent (Real Human) chat. It was amazing saving lots of holding time and confusion plus giving documented records of the discussion.

To clarfiy, I have a GIC maturing in 2 days. I also have 2 other GICs with Oaken maturing on April 20th. These are 2 TFSA and 1 RRSP accounts. I opened a Saving RSP and a Saving TFSA account in Tangerine. I requested the Transfer to be done. Straight forward automatic online process with digital signature.

Next step would be to opening 2 GICs. One for the RRSP and one for the TFSA then funding them from the other 2 saving accounts mentioned above. Based on Tangerine policy, I can define the amount of deposit for GICs. The requested fund needs to be available within 15 days of the GIC opening time. Technically, I should be able to open the GICs on April 6th and put the amount of the GICs.

Hope this clarifies it but I will give them a call tomorrow morning.

If they stop the rate before then, I will hava to suck up the $50 transfer out fee to move it back to Oaken hoping Oaken keeps their current rate up. Or maybe there will be a new player in town with a higher or similar rate, Meridian or someone else. Never know!

No permission to create posts

Please write your comments in the forum.