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Where to invest my GICs this year?
October 10, 2008
1:33 pm
Maxime
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I have all my deposits ending this month or the next and the only high rate I see is the 4.00% for 1 year and a half offered by ING and the 17 months 4.00% for a minimum of $5,000.00 offered by HSBC.

Is there any higher rates available out there? I'm searching for something around the 1 year...

Max

October 10, 2008
3:51 pm
jasy
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You should stay with ING at least until the end of this year. So there are currenty offering around 6% if you open a temporary Tax free Account which will be available at the beginning of 2009.

October 10, 2008
9:26 pm
Doug
British Columbia, Canada
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There's also Achieva Financial, MAXA Financial and Outlook Financial, offering 3.85% for a 12-month GIC and 4.25% for a 24-month GIC.

Cheers,
Doug

October 10, 2008
9:42 pm
roger
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I got a quoted rate of 4.25 at BMO today. available to the end of October. I also got a rate of 4.25 at TD with a bank employee using maximum discretion, Both for 24 month terms with interest paid monthly.

You can always get a better rate at he banks than you will see on line. Ask to see the person with the most discretion

October 12, 2008
1:28 pm
DDM
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I have read this Blog with great interest over the past year, taking the information and doing some research on my own. For long-term investments (i.e. GICs & Retirement Accounts), I have moved my funds to Achieva Financial. They have by far the best track record offering full guaranteed GICs for now over 10 years. You can open and manage your account online through their internet banking (far superior to Maxa). While they do not have bank to bank transfers as of yet, they do issue cheques if you open a side savings account (paying 3.05%)...however, this is not an issue if you are saving for the long-term.

Achieva is currently offering a five year GIC for 5%, as well as very competitive rates on shorter terms 4.75% for three years. Even going to my previous banker and getting the best rate they had to offer through all the hassle of negotiating couldn't match these rates.

As also posted in another discussion thread, I too also like that they give me a $1 every month for taking my account statement online.

October 14, 2008
4:47 pm
Maxime
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Well 4.75% seems really interesting however I will need most of my money for my scholarship fees in the next 2 years.

I currently have 20,000$ set in GICs that is ending on the 22th of October and I will leave my parents home on the 1st of July this year.

I will need this money to pay for food, appartment and I will have to leave my job the next year for the next 2 years when i'll be an Extern in medschool where I'll pass around 70 to 100 hours per week at the hospital with no salary at all. This period will last 2 years and I have 3 weeks of vacation per year so I won't be able to work or keep my current work because I will have 24 hours shifts at the hospital and sometimes I'll be on duty for a whole week-end. This rythm of life is incomptabile with work.

I want to have the most interest from my 20,000$ before having to spend it in the next 2 years. This year I'm working so I'm set to save some money however I have to prepare to pay 4,000$ of scholar fees + 2,000$ of textbooks per year = 6,000$ to this add the lifecost for appartement/food/cable/car that I split with my girlfriend.

I'm trying to complete my diploma without contracting any loan at the bank, I'm on government loans and I've got the 5,000$ they borrowed me, it's in another GIC which is ending in decembre and another in january.

That's a 25,000$ I have to invest somewhere secure and accessible.

October 17, 2008
10:17 am
CM
Guest
Guests

All I have to say is stay away from redeemble GICs, they will kill you on the penalty if broken early.

How about laddering your $25K --- look for the best one year term rate for $10K and place the rest in a highly secure Daily Savings Account paying you a secure rate?

October 19, 2008
1:34 pm
jim
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Breaking news on ING

ING parent company is a Dutch bank - the Dutch government is just proposing a huge bale out as ING are about to record a massive loss

I am looking to transfer everything out PDQ

October 19, 2008
6:17 pm
Doug
British Columbia, Canada
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Indeed. This is a bit surprising, since ING Groep NV was always regarded as one of the stronger European banks, but then again so were Lloyds TSB and Fortis NV prior to its acquisition of ABN Amro NV. According to wire reports, the Dutch government will end up with a total ownership in ING Groep, parent company of ING Direct subsidiaries around the world, of 33%.

Cheers,
Doug

October 19, 2008
10:05 pm
Maxime
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Guests

Wow I was waiting on the line of ING's customer service to renew 10,000$ for a 1 1/2 year GIC at 4.10% when I saw your info on : ING parent company is a Dutch bank - the Dutch government is just proposing a huge bale out as ING are about to record a massive loss"

Will this affect my placements? Should I move all my money out from ING on the 22th of October when it ends and place 10,000$ at my local bank GICs at a lower rate and put the rest at ICICI's 3.40%?

I have to decide before the 22th some the 21th the latest.

October 20, 2008
12:15 am
Peter
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Technically, your ING GIC is covered under the CDIC for up to $100,000.

http://www.ingdirect.ca/en/abo.....index.html

October 20, 2008
7:22 am
Maxime
Guest
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So if they are covered, what happens if ING bo bankrupcy?

the CDIC covers all your money but you get no interest at all on your investments?

October 20, 2008
10:42 am
Craig
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That's actually a good question. If a CIDC-insured bank fails, how are GICs dealt with by the CIDC when it comes time to make payouts to account holders? The fairest way would seem to involve a pro-rated payout. For example, if you have a locked-in 5-year GIC that pays 5% per annum, and your bank fails when your GIC is at the one-year mark, then the CIDC would reimburse your GIC principal plus one year's simple interest at 5%. It wouldn't seem fair for the CIDC to reimburse the entire five years worth of interest, and it also wouldn't seem fair to reimburse the principal amount only without any interest. Of course, "fairness" means different things to different people in the financial services industry. Anyone know the answer to this?

October 20, 2008
3:11 pm
Dave
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Maxime - Having most of my money already in ING, I shared your concerns when I read that news too, but on reflection I think there's probably little to worry about. According to the news, ING's shares recovered today on news of the bailout. At this point the best way to make ING collapse is to scare everyone into pulling their money away, causing a run on the bank.

Having said that, if you haven't already invested the money at ING, obviously ING does appear to be a higher risk at the moment, and like some of the others here, I'd suggest - if you can - looking at some of the credit union offerings. Achieva, for example, is giving 4.25% for two years right now.

I've just written a few more notes on the situation on my page, here.

I'm also looking into the CDIC angle, since I'm a little worried about that myself, but my understanding from glancing at that in the past is that CDIC will pay you the current balance of an account. If you get interest deposited annually, you'd get that interest, but you wouldn't get the interest that would be deposited at the end of this year. (i.e. if ING went belly-up in November 2009, you'd get the interest deposited in October 2009, but not the interest earned from then until ING's bankruptcy, if that makes any sense.)

I could be totally wrong on that last part though. I'm trying to find the info on the CDIC site myself. I started with this page, but it doesn't actually seem to answer the question:
CDIC on GICs

Good luck finding it out. If anyone does, I'd like to know what the situation is, too.

Dave
http://theshoelessinvestor.blogspot.com/

October 20, 2008
5:42 pm
Maxime
Guest
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Since they are in need of investments and to keep the money of their investors do you think it's possible to call them and get them to give you a better interest rate if you leave your GIC there?

When I called them 2 days ago about renewing only a part of my GIC and to change the time from 1 year to 1 year and a half they seemed to be very versatile and they told me they had no problem to give me 4.10% for 1 1/2 year over a fraction of my investment instead of a 3.70% on 1 year.

Has anyone already locked for a bigger rate than what advertised?

October 20, 2008
10:50 pm
Dave
Guest
Guests

I think you're right in that ING's need for cash might be motivating some of their deals lately (like the TFSA account, which is 6% until January 1, as well as the new 18-month GIC, which I think is the one you're talking about).

That 18-month GIC is listed on the website as paying only 4% (see here, so it look as though the actual people you're dealing with have discretion to up that rate a little. That sort of discretion isn't unusual with banks as you can often get a higher rate dealing in-person than is advertised online.

I don't actually have any experience of that sort with ING as I've never tried, but just for comparison purposes, it looks like you're getting a 0.10% bonus for buying the GIC over the phone.


Dave
http://theshoelessinvestor.blogspot.com

October 20, 2008
10:58 pm
Maxime
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Guests

Well the 0.10% is mainly explained by 1 thing. Since I already have a GIC ending this month, they sent me a letter offering me to boost of 0.10% the interest of my GIC if I renew it before it ends.

However, my GIC was a 1 year term. I called them and asked if I could re-invest only half of it of a quarter of it and switch it to 18 months to get the 4.00% rate and add that extra 0.10% on the top. She said: "no problem, we can do that, how much you want me to renew for your new GIC?"

I was suprised by her answer and told them I wanted to think about it and that I'd call back.

The speed she accepted makes me wonder if I could manage to lock it at a higher rate since they will prolly work harder to keep investment in their hands.

October 21, 2008
11:29 am
Dave
Guest
Guests

Again, that's probably going to come down to the discretion available to the person you're dealing with. It's possible, and it's certainly something you couldn't get online, but again I have no experience trying to push with ING.



I'd say go for it and see what happens. The worst thing that can happen is that you're left with your current offer.

October 22, 2008
8:41 am
Craig
Guest
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I've got a fairly sizeable GIC at ING that will be maturing in November... I might try the old "I'll renew with ING if ING will match the current best rate out there" schtick and see how it goes...

October 23, 2008
9:22 pm
Ash
Guest
Guests

There should be no penalty for redeeming a redeemable GIC, that's the whole point of them. They generally don't pay interest if redeemed within 30 days and pay a lower interest rate than a non redeemable GIC.

As for the 6% that ING is "Offering" it is if you open a ISA for a tax free savings account between October 1, 2008 and December 1, 2008 you will earn the regular 3% interest rate on their ISA and they will double the interest you earn and pay it to you on december 31, 2008 and convert it to a TFSA. But seeing as the maximum deposit for a TFSA is $5000 the extra interest is about a maximum of $36, however it is all subject to taxes. All banks have some discretionary pricing (extra interest persentage points they can offer) but generally it tops out at about 150 basis points. The best way to find out competitive GIC information is http://www.cannex.com/canada They aren't affiliated with any bank, they just compare all of their offerings.

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