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Just offered 3% (!!!) at Tangerine for 180 days
July 4, 2015
9:40 pm
Norman1
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Loonie said

I don't see how they could possibly go back through all the interest ever deposited and declare it not subject to additional interest This would be even more difficult when there have been withdrawals. Who's to say whether a withdrawal is from principal or interest?

In any event, it is beyond me to sort this out. I just want to know if anyone else has done the math and found it to be correct.

If nobody is able to verify their numbers, or nobody has tried successfully, then I have to ask myself if we're really getting what we thought we were getting, or did we miss something in the T&C? It's possible that they could make it so complicated that very few people could follow it. I just want to know that I have understood the offer correctly, and that they are giving us what they said they would.
....

Loonie, I calculated the Additional Interest payment for the month of June, for the 2.10% offer on new deposits between January 1, 2015 and June 30.

My calculated payment, after rounding to the nearest cent, is exactly the bonus interest Tangerine credited to my account on July 1 for that offer. sf-smile The Additional Interest rate was indeed 1.05% per annum.

I looked at all my new deposits from January 1 to June 30, ignoring any regular interest and bonus interest credits from Tangerine, to determine the eligible balance of each day. I calculated daily interest on those balances, using the factor 1.05%/365, for each day from June 1 to the day before the day the 3%-for-180-days offer superseded the 2.10% offer. I rounded at the end after totaling up all the interest (not each day's interest before totaling).

I actually received two bonus interest payments on July 1 for the month of June. One payment was for the part of June the account was under that offer. The second payment was for the remaining part of June that the account was under the 3%-for-180-days offer.

July 5, 2015
1:02 am
Loonie
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Thanks so much for figuring this out, Norman. I really appreciate it.
I too received the two payments on July 1 but didn't succeed in figuring either of them out although I thought I used the same approach as you.

I am going to take your word for it and assume mine is correct as well. It's all done electonically, I'm sure, so all accounts would be by same formula. sf-smile

Assuming no new deposits after the 2nd offer kicked in, did you find the larger payment to represent the first or the second offer? (This shows you how confused I am!) I'm just trying to speculate about what next month's will look like, with (hopefully) only one offer in effect - although rates could change any daysf-frown , adding to my sense of chaos!

According to me (and I may have this all wrong), if you had $10,000 in the eligible account for the entire month of July and the rates did not change, the bonus interest should be 10,000 x 1.95% / 365 x 31 days = 16.43. This time I rounded off each day's interest to 2 decimals before multiplying, which I didn't do before. Is that what you meant?

Are you saying that the bonus interest received for June on July 1 would not be included in the base amount for calculating bonus interest in July? - in other words no compounding of either Posted or bonus interest. And are you also saying that the bonus interest from the previous offer (1.05) which ended when the new one took effect, would also not count? I would have thought that once the old offer was over, then what you have at that point is your new starting capital. If not, each subsequent offer will in reality be worth less than the last, and one would be better off to take the interest out and move it to a different account, which is tedious and seems silly to me.

I hope I've got this straight now!

July 5, 2015
3:18 am
2of3aintbad
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Loonie, you should not round off the daily interest to 2 decimals (and get 16.43). You should round off the daily closing balance to 2 decimals, but in your example there is no change in the daily balance during the month. So $10,000 x 1.95% / 365 * 31 will give you 16.5616 or $16.56.

As for your other comments about compounding, since August also has 31 days, you can expect bonus interest of either $16.56 again or $16.59 (since new balance $10,016.56 x 1.95% / 365 * 31 will give you 16.5891).

July 5, 2015
7:45 am
Norman1
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Loonie said

Thanks so much for figuring this out, Norman. I really appreciate it.
I too received the two payments on July 1 but didn't succeed in figuring either of them out although I thought I used the same approach as you.

I am going to take your word for it and assume mine is correct as well. It's all done electonically, I'm sure, so all accounts would be by same formula. sf-smile
....

I think one can replicate Tangerine's calculation. Having the 3%-for-180-days offer replace the previous offer in the last weeks of June complicates things a bit. Consequently, one needs to confirm the exact starting and end dates of the two offers.

As 2of3aintbad reported, a personalized history of accepted offers, with start and end dates, can be found under My info and options -> My contest entries and Bonuses. At the bottom of that page, there is a "Your special rate offers" section.

As for any withdrawals between January 1, 2015 and June 30, I suspect they will fully impact the eligible balances of new deposits. In other words, any withdrawals will be against principal and not against any regular interest or Additional Interest.

July 5, 2015
7:57 am
Norman1
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Loonie said
...
Are you saying that the bonus interest received for June on July 1 would not be included in the base amount for calculating bonus interest in July? - in other words no compounding of either Posted or bonus interest. And are you also saying that the bonus interest from the previous offer (1.05) which ended when the new one took effect, would also not count? I would have thought that once the old offer was over, then what you have at that point is your new starting capital. If not, each subsequent offer will in reality be worth less than the last, and one would be better off to take the interest out and move it to a different account, which is tedious and seems silly to me.

I hope I've got this straight now!

The 3%-for-180 days offer is not based on "net new deposits". The offer is on the entire balance. July's 1.95% Additional Interest payment, that will be made on August 1, will count the June Additional Interest payments, that were made on July 1.

The wrinkle is that the 1.95% Additional Interest payment will be calculated using the same daily balances as the regular interest payment on the previous day. That has the effect of excluding the one regular interest payment on the previous day. This is term #7 of the offer:

7. Interest is calculated daily and paid monthly for both the Posted Rate interest payments and the Additional Interest payments. Additional Interest will not be paid and will not be payable until the start of the month following the month in which it was calculated, and the calculation for that month will not include interest on top of Posted Rate interest for the previous day (Example: If the month ends on July 31, 2015, the Bank's applicable Posted Rate of interest will be paid to that Applicable Account on July 31, 2015 and any Additional Interest will be paid to that Account on August 1, 2015. Both Additional Interest and Posted Rate interest payments will be calculated based on the same balance for the month of July, despite the fact that the Posted Rate interest is paid on July 31, 2015, one day before the Additional Interest is paid.). Any Applicable Account closed prior to the payment of Additional Interest will forfeit any Additional Interest calculated during the month in which the Applicable Account is closed.

July 5, 2015
2:12 pm
Norman1
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Loonie said

Thanks so much for figuring this out, Norman. I really appreciate it.
I too received the two payments on July 1 but didn't succeed in figuring either of them out although I thought I used the same approach as you.
....

I calculated the 1.95% Additional Interest payment for the short period in June that the 3%-for-180-days offer applied.

My calculated payment is within ¼¢ of Tangerine's actual payment. sf-smile The ¼¢ loss is expected and is from rounding the payment down to the nearest cent.

I had excluded the June 30 payment of regular 1.05% interest, as per term #7 of the offer, from the calculation of the 1.95% Additional Interest payment.

July 5, 2015
4:47 pm
Loonie
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Thank you for your patience and input.

I have checked, and the start date is listed as June 23, which is the same as what I was told on the phone.

I think I have followed all advice given, and still can't make it work out anywhere close.
I must be doing something very wrong.

This is what I have done (and this account did not get the 2.1 offer, so that is not a complicating factor):

Most recent (and only) transaction in June was a withdrawal June 2, so I have taken the balance as of June 2 after this withdrawal.

Balance x 1.95% divided by 365 days = bonus interest expected per day.

There is no number of days that I can multiply this by that comes close to the interest credited on July 1, whether or not I round anything off at any stage. If I use 6 or 7 days, the interest credited is significantly lower than expected. Only if I use 5 days can I bring it into the range of interest credited, but still too far from identical to be due to rounding.

Please tell me what I am doing wrong if you can.

July 5, 2015
6:41 pm
Norman1
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Check the 3% offer. If it is the 3%-for-180 days one, then the end date should be December 19.

Check the account online to make sure there were really no transactions in June after June 2nd. Check online that the closing balance of June 2nd is what you expected.

For the situation you described, the 1.95% Additional Interest payment on July 1, for June 23 to June 30 should be exactly

(June 2 closing balance) x 1.95% x 8/365

Something doesn't line up. The account did not get the previous 2.1% offer. Yet, you reported that it received two bonus interest credits on July 1. In that case, there should be only one bonus interest credit and not two.

My account has two bonus interest credits dated July 1. One is the 1.05% Additional Interest for the part of June the 2.1% offer applied. The second is the 1.95% Additional Interest for the last part of June when the 3%-for-180-days offer replaced the 2.1% offer.

Maybe Tangerine split your 1.95% Additional Interest payment into two credits? sf-confused

July 5, 2015
6:45 pm
2of3aintbad
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Take the bonus interest expected per day & multiply by 8 (June 23 - 30). Why not call them and tell them that is what you should get.

July 5, 2015
7:39 pm
Loonie
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Norman1 said

Check the 3% offer. If it is the 3%-for-180 days one, then the end date should be December 19.

Check the account online to make sure there were really no transactions in June after June 2nd. Check online that the closing balance of June 2nd is what you expected.

For the situation you described, the 1.95% Additional Interest payment on July 1, for June 23 to June 30 should be exactly

(June 2 closing balance) x 1.95% x 8/365

Something doesn't line up. The account did not get the previous 2.1% offer. Yet, you reported that it received two bonus interest credits on July 1. In that case, there should be only one bonus interest credit and not two.

My account has two bonus interest credits dated July 1. One is the 1.05% Additional Interest for the part of June the 2.1% offer applied. The second is the 1.95% Additional Interest for the last part of June when the 3%-for-180-days offer replaced the 2.1% offer.

Maybe Tangerine split your 1.95% Additional Interest payment into two credits? sf-confused

This is a different account than one I mentioned previously. One belongs to me and one to spouse. I thought it might be easier to make this work out with the one that did not receive the 2.1% deal, as there would be no chance of confusing which interest payment belonged to which promo, but I can't seem to make any of them work out.

Yes, the end date is Dec 19.
I took all the account info from the Tangerine print-out.

I recalculated using Norman1's formula above, and used a different calculator just in case there is something wrong with the calculator, and still got wrong result. The amount credited is under by something in the vicinity of 50%.

I guess I will have to phone them for clarification. I don't like making the phone calls, but I would like to understand what is going on.
I actually doubt they made a mistake, as that rarely happens with everything being electronic. But, still, it nags at me that I can't make sense of it, and I would like to be able to calculate with confidence in future.

July 5, 2015
8:26 pm
Norman1
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Loonie said

...
This is a different account than one I mentioned previously. One belongs to me and one to spouse. I thought it might be easier to make this work out with the one that did not receive the 2.1% deal, as there would be no chance of confusing which interest payment belonged to which promo, but I can't seem to make any of them work out.

Yes, the end date is Dec 19.
I took all the account info from the Tangerine print-out.

I recalculated using Norman1's formula above, and used a different calculator just in case there is something wrong with the calculator, and still got wrong result. The amount credited is under by something in the vicinity of 50%.

I guess I will have to phone them for clarification. I don't like making the phone calls, but I would like to understand what is going on.
I actually doubt they made a mistake, as that rarely happens with everything being electronic. But, still, it nags at me that I can't make sense of it, and I would like to be able to calculate with confidence in future.

The 1.95% Additional Interest payment is fairly simple. It looks like you have a rare Tangerine mistake!

Under by around 50%. Hmm. Could they have given you 0.95% Additional Interest instead of 1.95%?

I'm curious. What is the per annum rate of the actual bonus payment for the eight days? This is the formula:

Actual rate = [ (Actual bonus payment) / (June 2 closing balance) ] x 365 / 8

July 6, 2015
2:45 am
Loonie
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Norman, I tried your formula but the answer didn't make sense, so I thought about it and decided that perhaps you meant to multiply by 100 to make it a percent, so I did it that way, and the final answer was 1.25

This is closer to 50% and probably reflects what I had come up with before. (50% was just a vague approximation to indicate that it was a significant difference, not just fractions of a cent etc.)

So, unlikely as it seems, could they have given me 1.25 instead of 1.95? Surely they don't have someone sitting there typing in all these numbers individually! I wish I could think of another explanation. I fear that after a lengthy phone call they will point out some dumb mistake I madesf-embarassed, which is why I came here first!

There are 4 accounts in all. Sigh...

July 6, 2015
5:05 am
Norman1
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That's right: I was expecting my formula to return something like 0.0195 which is 1.95%.

You got 0.0125 which is 1.25%. That's not random like 1.2322423%. Yes, it does look like your accounts are set up for 1.25% Additional Interest instead of 1.95% Additional Interest!

I don't know what Tangerine's computer system is like for their telephone agents. I would think they would just pick a pre-configured offer from a list. However, it is possible they have to configure the parameters of the offer individually!

Another possibility is that you have been given a slightly different 3%-for-180-days offer? Mine is 1.05% regular interest + 1.95% Additional Interest. Could yours be 1.75% regular interest + 1.25% Additional Interest? Would you be able to calculate the regular interest paid on June 30 to see if it was 1.05% per annum?

July 6, 2015
11:05 pm
Loonie
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YES!
You're quite right, Norman. It is 1.75 basic + 1.25 promo.

I think now that this is because I had the 1.75% offer going on this account. I think I may have said earlier that there was a deposit on June 2?, but, when I look again, I see it was a withdrawal, so the 2.1% never kicked in and I wasn't thinking about that offer. In fact, there were no deposits on this account during that offer.

I think the confusing part is that the T&C for the new offer seem to suggest (at least in my recollection) that once the new offer kicked in, the old one would end. Thus I was not looking for the old one, and I had not examined the basic interest at all. I did have a note that it was supposed to get the 1.75, but had not checked on that and was not thinking about it.

Anyone else who checks their interest credits might run into this same issue if they previously had the 1.75 offer.

I think I can now safely assume that all the statements are correct, and that I have correctly understood what to expect in future. This should not be an issue in future months unless they introduce another offer which overlaps this one or rates change.

The word today on the TV news was that they are foreseeing another interest rate drop in the near future, so the odds are that this 3% rate will not stand, unfortunately. This supports my feeling that I probably should not cash my 1yr cashable GiC at Oaken which is at 2.25 to Dec 22 or so in order to move it to Tangerine.

Thanks so much to Norman1 and 2of3aintbad for sticking with me on this one and helping me to figure it out! sf-smile

July 7, 2015
6:48 am
2of3aintbad
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You're welcome, Loonie. Interesting that we are in the same situation, owning cashable GICs at Oaken that pay 2.25% and mature in December. There are several things to consider:
1. The yield to maturity of the GIC is slightly less than 2.25%. Or put in another way, since my $10,000 GIC is worth $10,134 today, I really have $10,134 available at 3% rather than $10,000 earning 2.25%.
2. It is not clear to me from the terms and conditions that a drop in interest rates, and a subsequent drop in Tangerine's "Posted Rate", will affect the total return. In a previous promotion, when they lowered the Posted Rate, they raised the 'Additional Interest' (rate) to keep the total the same. Where do you see it different this time?

On the other hand, it is a positive for Oaken that they give advance notice of a rate change. That can help in the decision making for your Oaken investments.

July 7, 2015
5:26 pm
Norman1
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That's great, Loonie. Glad we solved the mystery.

So, Tangerine had more than one 3%-for-180-days offer active in June:

  1. 1.05% regular interest + 1.95% Additional Interest
  2. 1¾% regular interest + 1¼% Additional Interest

You had wrote in April that the 1¾% offer was good until the end of June. It would interesting to see, after August 1, what your regular interest and Additional Interest payments will be for this month of July.

Will July's payments continue to be 1¾% regular interest + 1¼% Additional Interest or will they become 1.05% regular interest + 1.95% Additional Interest?

July 7, 2015
10:29 pm
Loonie
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2of3aintbad said

You're welcome, Loonie. Interesting that we are in the same situation, owning cashable GICs at Oaken that pay 2.25% and mature in December. There are several things to consider:
1. The yield to maturity of the GIC is slightly less than 2.25%. Or put in another way, since my $10,000 GIC is worth $10,134 today, I really have $10,134 available at 3% rather than $10,000 earning 2.25%.
2. It is not clear to me from the terms and conditions that a drop in interest rates, and a subsequent drop in Tangerine's "Posted Rate", will affect the total return. In a previous promotion, when they lowered the Posted Rate, they raised the 'Additional Interest' (rate) to keep the total the same. Where do you see it different this time?

On the other hand, it is a positive for Oaken that they give advance notice of a rate change. That can help in the decision making for your Oaken investments.

I'm afraid I don't follow your first point. The Oaken GIC is supposed to be cashable giving you the amount earned to date, as I understand it. Going forward, for the remaining (approx.) 6 months, if you moved it to Tang, you would, if all goes well, get 3% p.a. for that period. So I don't follow how the 2.25 is reduced. No doubt I'm missing something.

I did not follow whatever happened on previous occasion when the basic interest rate fell during a promo, so was not aware of that. You may be right that they intend to keep it at total of 3%, which would be great if true. I had interpreted this clause otherwise: "Any change to the Posted Rate will result in a corresponding change to the Offer. Additional Interest and/or Posted Rates may change at any time without prior notice." However, considering what you are saying about what happened in the past, I see that it is more ambiguous than I had realized. What is a "corresponding change"? Does it go in tandem with the Posted Rate, as I had assumed it might, or does it balance the decline in Posted Rate and thus keep the overall rate stable? And why can't they speak clearly?

In view of all that, I am annoyed with the "without prior notice" clause. I suppose we will notice, via this forum if nothing else, when Posted Rate goes down, and that will prompt us to check on what has happened to the Additional Interest rate. However, considering the ambiguity of the "corresponding change" clause, I feel uneasy, and it leaves me wondering if I ought to be checking in frequently in order to know what's going on with my money.sf-confused

July 7, 2015
10:44 pm
Loonie
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Norman1 said

That's great, Loonie. Glad we solved the mystery.

So, Tangerine had more than one 3%-for-180-days offer active in June:

  1. 1.05% regular interest + 1.95% Additional Interest
  2. 1¾% regular interest + 1¼% Additional Interest

You had wrote in April that the 1¾% offer was good until the end of June. It would interesting to see, after August 1, what your regular interest and Additional Interest payments will be for this month of July.

Will July's payments continue to be 1¾% regular interest + 1¼% Additional Interest or will they become 1.05% regular interest + 1.95% Additional Interest?

Yes, they had 2 offers going in June, but only for the last 8 days of June.

I am assuming the 1.75 will disappear after June 30, as it was programmed to do.
I think it will revert to 1.05 + 1.95 as of July 1, but you can be sure I will be checking to make sure it doesn't go to 1.05 + 1.25 !

This will get even more complicated if rates overall decline this month!

July 8, 2015
4:35 am
2of3aintbad
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Loonie, what I was trying to say in my point 1.:
Dec 1, 2014 if you bought an Oaken cashable 2.25% GIC, you can expect to get $225 in interest on Dec 1, 2015.
Yesterday, the GIC could be redeemed with $134 plus a few cents interest. So the decision that day was: either you leave it with Oaken (and you will earn another $90, which really is 2.22% on $10,134), or you start earning 3.00% on the $10,134 at Tangerine (and you will earn approximately $122 by Dec 1, depending on how long the transfer takes).

So every day we keep our cashable GICs, they are worth more but returning a little less, especially compared to Tangerine.

July 8, 2015
5:23 pm
JustMe
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To my best knowledge, Tank honored previous offers; meaning if they offered (sample) 3% for 3 months = base interest 1.25% + bonus 1.75% and base interest dropped to 1%, bonus went to 2%.

I see no point of some folks considering breaking GIC and moving money to Tang to get few $ extra. The way it goes, in December interest rate (at those who pay some 'decent' interest) will be about 1.5% so enjoy your 1.95% or 2.25% or whatever you have now. Greed will kill you...

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