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ING great-rate 90 day GIC
June 24, 2013
11:49 am
GS1
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My neighbour received an addressed promotional piece from ING in today's paper mail which reads, in part, "just put your money into a 90 Day GIC from ING DIRECT between July 1st and July 31st, 2013, and earn 2.00%, guaranteed!"

I did not get one - yet.

So now I have to decide whether to pull my ING money that earns 2.50% up till June 30 in case they have another "good rate" for new deposits or if I just leave it there till June 30th and roll most of it into a 90 day GIC or do I move it to PC Financial as a new deposit till their 2.6% rate ends on July 15th and then return it to ING for the 2.00% GIC.

I think I need to see what this all works out to in real dollars and use that to make my decision.

Greg

June 24, 2013
4:48 pm
Rick
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Ah...ING and their games. Was wondering what their next gimmick would be after the 2.5% promotion ended. I so wish they would just go back to giving above average rates ALL the time, like they used to. My money gets tired of being transferred between institutions chasing crappy interest rates. My PT account is giving 1.9%, so the interest lost for about the week it would take to transfer it out of ING into my main bank then transfer again to PT wouldn't be worth the effort. Looks like my emergency fund will be locked up for 90 days at ING. New contributions going to PT though. Touche' ING...you will manage to keep my money for another 90 days. But will you keep it after that???? Somehow....I doubt it.

June 24, 2013
4:59 pm
Rick
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So now I have to decide whether to pull my ING money that earns 2.50% up till June 30 in case they have another "good rate" for new deposits or if I just leave it there till June 30th and roll most of it into a 90 day GIC or do I move it to PC Financial as a new deposit till their 2.6% rate ends on July 15th and then return it to ING for the 2.00% GIC.

Can't see moving it to PC for .6% better interest for 15 days. Even if both your accounts are directly linked. More trouble than it's worth. If you can afford to lock it up for 90 days, I'd just roll it into the GIC and see what they have to offer in October. Their next "promotion" usually starts as soon as the previous one ends.

June 25, 2013
10:31 am
Doug
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Greg, go ahead and take that 90-day GIC offer. I thought I'd save this for my much-promised upcoming "predictions" post but I'll add this "teaser" (if you pardon the bad pun).

It's probably as good as you're going to get (other than Hubert's 1-year redeemable GIC offer that expires this Friday). Both ING Direct and PC Financial will let their "new money" promo high-interest savings account rate offers expire when they expire on June 30th and July 15th, respectively. Summer and fall historically offer a return to regular abysmally low interest rates with few, if any, promo rate offers. The winter months offer "new money" promos on TFSAs and RRSPs while the spring months offer "new money" promos on non-registered HISAs. I'm moving my money (save for maybe a few hundred dollars but not more than $1000) shortly after June 30th from ING Direct to Implicity Financial and will also follow-up with them on when they plan to add to paperless self-to-self bank-to-bank transfer account registration & linking. :)

More to come in the next week or so!

Cheers,
Doug

June 25, 2013
4:46 pm
GS1
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Doug:

I scheduled a move of funds for Thursday from ING to RBC, on the way to PCFin to take advantage of the last 15 days of PCFin's offering and will then move it back to ING for a 90 day GIC.

I stuck this into Excel and even with factoring in a few days for loss of interest due to funds being "in transit" I still come out ahead between $70 and $100 by doing the ING to PCFin and then back to ING move, as opposed to allowing it to simply go from ING at 2.5% to an ING GIC at 2%.. Better in my pocket than theirs.

This also gives me the option in case ING does come out with some other offer.

Greg

June 26, 2013
8:54 am
Rick
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Doug said

Summer and fall historically offer a return to regular abysmally low interest rates with few, if any, promo rate offers. The winter months offer "new money" promos on TFSAs and RRSPs while the spring months offer "new money" promos on non-registered HISAs.
Doug

Yes... when the 90 day GIC ends at the end of September, ING starts up their Kick Start TFSA promo Oct 1.

June 29, 2013
10:09 pm
GS1
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Brian said

The difference between say 2% and 2.5% is really not that great on an after tax basis unless you are dealing with very material amounts of money.

[snip]

I am not sure of what your definition of "material amounts of money" is but imagine a 61 year old who has just retired (or been forced out). He and his wife have, say, $1,050,000 in retirement and investment funds. He has taken CPP early, but his wife is not yet eligible, even though she, too, has stopped working. He has no pension. So, he is living off reduced CPP income of about $700 per month, plus dipping into "savings".

He went through the dot-com bubble and saw his net worth drop by about $200,000 in a few weeks. It has come back now but he still remembers. So, he got aggressive and did some serious asset allocation. His current allocation is 48% fixed income (bonds and bond funds), 20% Canadian equities, 16% US equities, 13% EMEA equities and 3% cash.

But, he knows he doesn't want to have to sell investments in a down market, just for day to day living expenses so he strips off $50,000 as a cash float and puts that with the 3% cash ($30,000) from the asset allocation and so has $80,000 he needs to keep liquid.

He seeks the best return he can find for the $80,000 while keeping it as liquid as he feels he needs to. He likely holds his nose while accepting a 1.9% or 2.0% return, knowing inflation is likely eating more than that -- but he sleeps well at night knowing that if, say, he had $50,000 in BCE last week and it took a large hit he wouldn't have to worry about needing to sell some of it this week.

He would probably love to have a different asset allocation -- but time is no longer on his side.

Now, does my imaginary person exist. Likely he does. Do many folks have $1,050,000 in assets when they retire. Some have less and some have more.

Greg

June 30, 2013
9:33 am
kanaka
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Brian said

The difference between say 2% and 2.5% is really not that great on an after tax basis unless you are dealing with very material amounts of money. One can do lots better in blue chip (eg banks, life insurance companies, utilities etc.) preferred shares earning 4% dividends and more, and you get a dividend tax credit on your income tax. Keeping money at 2% for long periods of time is a poor strategy - unless you required the cash very soon. Over the last five years earning 2% on cash was a poor strategy as stocks constantly continued to grow or at least paid solid dividends at double the rate of 2%.

Ok young one!!!!
Here is an old saying:
"Watch your nickels and dimes ...
... and the dollars will take care of themselves."

When you compare rates for the term you are looking for...you TAKE the highest one!!! No matter what you yield more!!!

July 1, 2013
9:37 am
Rick
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GS said

So now I have to decide whether to pull my ING money that earns 2.50% up till June 30 in case they have another "good rate" for new deposits or if I just leave it there till June 30th and roll most of it into a 90 day GIC or do I move it to PC Financial as a new deposit till their 2.6% rate ends on July 15th and then return it to ING for the 2.00% GIC.

Greg

July 1 and no sign of the great rate gic on their web site. Should make the decision pretty easy. Guess I'm pulling and my funds and heading back to PT with them.

July 1, 2013
10:30 am
GS1
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Rick said

[snip]

July 1 and no sign of the great rate gic on their web site.

and interestingly, I never received a copy of the promotional piece my neighbour received. I do know he would have relatively little in ING and relatively little activity over the past 6 - 12 months. Whereas I have had "lots" there and it has been active.

Obviously, my profile is flagged as being "someone who chases rates".

And, as I said about PCFinancial the woman on the phone there was intrigued that I knew of their most recently offered promotion.

We need to keep getting new members here who will be offered these promotions!!

Greg

July 2, 2013
9:19 am
toto
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I phone ing direct and said I saw the promotion mentioned on this site and they gave it to me anyway,
without getting anything in the mail

July 3, 2013
6:47 am
Rick
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I phoned too. Offer is only available on "non-registered" funds. N/A for RSP or TFSA

August 2, 2013
11:32 pm
SD2013
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These short term offers of 2.50% or 2.60% on higher interest savings accounts and 2.00% 90 day GIC from ING Direct is a great deal of back and forward to earn not much more money. They have to raise fixed term rates of 3, 4, 5 years where you can really earn more money and be worth your time and effort. I just noticed that Scotia Bank has a special 30 month or 2.5 year GIC for 2.00% and a 5 year GIC for 2.59%.

ING Direct does not have 2.5 years GIC's but a 3 year at 2.00% and a 5 year GIC at 2.25%. ING Direct always paid more than Scotia Bank but now that Scotia owns ING Direct it looks like Scotia Bank is purposely making ING Direct deposit products, GIC's in this case, artificially kept lower than Scotia Bank in the attempt to get more business to Scotia Bank accounts with fees.

ING Direct prided on it's self to be for the small guy not like the Canadian 5 major banks nickel and dimming customers. Another thing I read recently was ING Direct has 8 months to get a new name and will offer in the near future cash back credit cards.

I think by 2014 ,ING Direct will not be as an attractive place to have money deposited with. I hope I'm wrong but it seems to be going that way with lower GIC rates when in a current rising interest rate environment from the 5 year Canada bond up a 0.50% point since January-2013. All 5 year closed fixed rate mortgages, loans, credit lines etc. and 5 year deposit products GIC's go up or down with this benchmark 5 year Canada bond yield.

You can look other trust companies, banks, credit unions have increased their GIC rates or kept their rates on the higher end. Just look at 5 year GIC rates.

Here are the better 5 year GIC rates out there,

Home Trust 2.65%+0.25% bonus interest 2.90%, Equitable Bank 2.65%, Community Trust 2.55%,

Manulife Bank 2.65%, Sunlife Financial 2.50%, First Ontario Credit union 2.50%, ICICI bank 2.85%.

Here are a few more, State Bank of India (Canada) 2.50%, Comtech C.U. 2.50%, Teachers C.U.

2.50%, Steinbach C.U. 2.60%, Outlook Financial 2.70%, Canadian Tire Bank 2.56% with a $20,000 minimum,

Airline Financial C.U. 2.60%, ATB Financial 2.50%, Achieva Financial 2.70%,

Accelerate Financial 2.70%, B2B bank 2.65%, General Bank of Canada 2.66%.

Another possible option for TFSA's, RRSP's, RESP's, LIRA's etc. that are like 5 year compound GIC's are current 5.5 to 6 year provincial strip bonds. Their current yield to maturity are 2.70% to 2.80% depending on the province. If you want to stretch it out a little more there are 6.5 to 6.75 year provincial strip bonds at 2.90% to 3.00% yields to maturity.

As long as you hold them to maturity, they will pay the stated yield or interest rate. A $5,000 investment would be worth after 6.75 years at 3.00% yield to maturity $6,104.10. I noticed that many financial institutions don't offer RESP GIC's.

There are 4.25% 18 year provincial strip bonds that may be a better value for RESP's. A $5,000 investment would be worth $10,576.43 by the time your kid goes to college, university, trade school etc.

August 17, 2013
8:36 pm
SD2013
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ING Direct is not raising it's GIC rates and term deposit rates. The last change was December-3-2012 which was a decrease of 65 basis points from it's 1 year GIC promotion that was 2.00% down to 1.35%. ING direct is quick to drop their GIC rates when they where falling in 2011, 2012 but now it's been almost 8 months that Canada bond yields have risen.

The last time 5 year GIC rates were 2.60% was August-12-2011 more than 2 years ago. On July-27-2011 which was only 16 days away from that last rate decrease their 5 year GIC was 2.85%. This is a decline of 35 basis points or a 0.35% percentage point in 16 days.

I think that ING Direct's 5 year GIC should be at least back to the 2.85% rate as 5 year Canada bond yields 2 years ago were 1.26% and now are 1.96%. Scotia Bank bought ING Direct so it could raise it's 5 year GIC rates less. It had a GIC rate special promotion that ended August-9-2013 paying 2.59% for a 5 year GIC and now has a 4 year GIC at 2.39%.

ING Direct has a 4 year GIC at 2.00% and a 5 year GIC at 2.25%. Scotia Bank is artificially making it's GIC rates look better when they are both uncompetitive with other financial institutions like,

Home Trust Company 2.92% 5 year GIC

Equitable Bank 5 year GIC at 2.67%

General Bank of Canada 5 Year GIC at 2.67%

Outlook Financial 5 year GIC at 2.70%

Achieva Financial, Accelerate Financial all have 5 year GIC's at 2.70%

Hubert Financial 5 year GIC at 2.85%

ICICI Bank(Canada) 5 year GIC at 2.85% RRSP/TFSA GIC 5 year at 3.15%

State Bank of India(Canada) TFSA GIC only 5 year 2.85%

B2B Bank 5 year GIC at 2.68%

AGF Trust Company 5 year GIC 2.68%

Manulife Bank 5 year GIC at 2.60%

ATB Financial 5 year GIC at 2.60%

Airline Financial C.U. 5 year GIC at 2.60%

Steinbach C.U. 5 year GIC at 2.60%

Community Trust Company 5 year GIC at 2.55%

Canadian Tire Bank 5 year GIC at 2.67% only with a $20,000 minimum

Homequity Bank 5 year GIC at 2.65%

Canadian Direct Financial 5 year GIC at 2.55%

Entegra credit union 5 year GIC at 2.60%

MAXA Financial 5 year GIC at 2.70%

Manulife Trust 5 year GIC at 2.60%

Peace Hills Trust 5 year GIC at 2.70%

If you go trough a GIC broker or financial,investment adviser only Scotia Bank, National Trust, Scotia Mortgage Company, BMO Trust Company, Bank of Montreal, Montreal Trust Company of Canada, Bank of Montreal Mortgage Company all have 5 year GIC's at 2.70%. They compete only through GIC brokers, agents, financial, investment advisers.

ING Direct's promotion of get $25.00 bonus credited to your account when you open a ISA and get 2.50% in your ISA and his or hers as well until August-31-2013 when you share your orange key with your friend or friends is a short term ploy to keep GIC rates, savings account rates and all deposit rates lower than they should be.

I invested over the last 3 weeks $13,000 in Home Trust Company 5 year GIC's at 2.90%, 2,92%. It was easy just printed their forms from their website, filled them out, enclosed a check each time and mailed them in. I was already an existing client so ID was not required.

ING Direct is losing lots of business and will continue to lose business if it does not raise all GIC, deposit rates alongside with the rising yields in the Canadian bond market. I calculated that the total differential compound interest from ING Direct versus Home Trust Company is $475.03 over 5 years.

August 18, 2013
4:34 am
Irwin W.
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ING Direct lost me as a customer a few years ago, when I submitted an online change of address. Immediately, my account was frozen and it took over a month to get things sorted out.
I deal with 1/2 dozen financial institutions; no one else gave me any grief over a change of address.

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