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Any Chinese New Year GIC promo this year ?
January 21, 2023
12:44 pm
Norman1
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UkrainianDude said

My concern is, if let’s say I open five years GIC with Wealth one bank in 2023. In 2024 CDIC will recall its insurance but let the bank run. Nevertheless wealth one declares bankruptcy in 2025. Since CDIC coverage only good for two years since insurance. Will this five year GIC be gone with 100% loss of principal and interest?

Last sentence of CDIC Act subsection 34(1) covers that:

Effect of termination or cancellation

34 (1) If the policy of deposit insurance of a member institution is terminated or cancelled by the [Canada Deposit Insurance] Corporation, the deposits with the institution on the day the termination or cancellation takes effect, less any withdrawals from those deposits, continue to be insured under the terminated or cancelled policy of deposit insurance for a period of two years or, in the case of a term deposit with a remaining term exceeding two years, to the maturity of the term deposit.

The two years is a minimum to cover liquid deposits like chequing accounts, savings accounts, eligible prepaid cards, and bank drafts.

January 21, 2023
2:18 pm
Alexandra
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This is the way I see it (maybe I am wrong)

CDIC stands for Canadian Deposit Insurance Corporation.

CDIC ...."We protect your deposits that are held in our CDIC member institutions.
We insure eligible deposits up the $100K (in each category) including p&i."

This means to me.....that you are covered for the said deposits under CDIC Insurance, by the "Insurance Corp" providing your deposits are with a CDIC Member. So, its not the bank that is ensuring you get paid back on eligible deposits if they go down but rather the insurance corp?

January 21, 2023
2:46 pm
AltaRed
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Indeed it is CDIC that keeps the depositor whole but it can be done in a few different ways.

CDIC might push all or some of the deposit book on to another solvent FI in whole or in part which might mean term deposits continuing to maturity under a different letterhead.

Liquid cash may simply be paid out to depositors.

In any case, a bankrupt FI will still have assets that can be distributed. It is not like CDIC will need to ante up 100% of the pay out.

January 21, 2023
4:30 pm
Loonie
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@ Canadian100, Thank you for your response. It appears, then, that there is no rule of thumb that could provoke decision-makers of WealthOne to call it quits, but CDIC also has the power to independently pull the plug as a last resort if they can't find a buyer.
I think we have at least moved the discussion along to consider more factors than simply failure to turn a profit.

It brings to mind Amazon's early years where it didn't show a profit for a very long time and became a bit of a laughing stock, but Bezos had a vision and a plan and was undeterred. Banking is different of course, but we don't really know what W1's strategy is.

January 22, 2023
7:04 am
canadian.100
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Loonie said

It brings to mind Amazon's early years where it didn't show a profit for a very long time and became a bit of a laughing stock, but Bezos had a vision and a plan and was undeterred. Banking is different of course, but we don't really know what W1's strategy is.  

Any comparison between Amazon/Bezos to WealthOne Bank is strictly coincidental.

January 23, 2023
6:49 am
UkrainianDude
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savemoresaveoften said
This will be an interesting and rare scenario. Why don’t you ask CDIC and report back ?  

Called CDIC and they could not answer my question, instead they told me to email my question. Yep, waste of time and meaningless response.

January 23, 2023
7:56 am
Bill
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UkrainianDude, your question is a specific scenario "what if", makes sense they'd like to look into it and asking for email detailing the scenario's facts makes sense to me. But if you did as they reasonably requested and received a reply then you wouldn't be able to complain about Canada's regulators, etc and that's no fun, is it?

January 23, 2023
9:14 am
UkrainianDude
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Bill said
UkrainianDude, your question is a specific scenario "what if", makes sense they'd like to look into it and asking for email detailing the scenario's facts makes sense to me. But if you did as they reasonably requested and received a reply then you wouldn't be able to complain about Canada's regulators, etc and that's no fun, is it?  

First of all I expect CDIC person on the phone to be qualified to answer a simple question.
Second of all if rep isn’t confident to answer perhaps he could have jotted down the details of my question, ask my contact email address and provide me with the answer later? But he never offered that. How hard is this?
So yeah, they don’t really care.

January 23, 2023
9:27 am
HermanH
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UkrainianDude said

First of all I expect CDIC person on the phone to be qualified to answer a simple question.

I had a similar incident, when calling CDIC with a relatively simple question. The fool on the other end could not do anything more than read and re-read and re-read the same answer over and over, from a script. I tried to get more detail and it was like talking to a recording. It did not matter how many times I told her that I did not understand her response. She just repeated it verbatim, probably because she had no clue behind how the system works.

Oh, yeah, I tried to register a complaint about her, too. Every call simply got routed back to her and she "couldn't connect" me to a supervisor. Yeah, sure.

January 23, 2023
10:52 am
savemoresaveoften
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UkrainianDude said

First of all I expect CDIC person on the phone to be qualified to answer a simple question.
Second of all if rep isn’t confident to answer perhaps he could have jotted down the details of my question, ask my contact email address and provide me with the answer later? But he never offered that. How hard is this?
So yeah, they don’t really care.  

The person who answer the call is a phone person, a reception, could be a student, part time etc. What you expect is not a reasonable expectation.

Jot down the details and ur name and phone number and whats not ? That is again NOT a reasonable expectation at all. Go back to my comment above please.

Asking you to send a email is the RIGHT and correct reply. This way they can forward it to whoever is best qualify to answer. Its 2023 by the way, not 1993...

January 23, 2023
11:09 am
UkrainianDude
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savemoresaveoften said

Jot down the details and ur name and phone number and whats not ? That is again NOT a reasonable expectation at all. Go back to my comment above please.
  

What is unreasonable about this ?
The correct way to handle my inquiry would be , “sir I am not prepared to answer your question right away, but if you provide me with your email address I will write down your question and forward it to the person/department who is the best qualified to answer your question and they will get back to you as soon as possible.”

January 23, 2023
12:43 pm
savemoresaveoften
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UkrainianDude said

What is unreasonable about this ?
The correct way to handle my inquiry would be , “sir I am not prepared to answer your question right away, but if you provide me with your email address I will write down your question and forward it to the person/department who is the best qualified to answer your question and they will get back to you as soon as possible.”  

His / her job is to answer the phone and direct the question / enquiries to appropriate person / extension, then move on to the next call. Not to serve someone on a high horse who is too busy / important to type up a email.

The correct way if u are even keen to have your question properly answered is to do exactly what the person suggested. That IS the correct way, obvious not to you...

January 23, 2023
1:21 pm
Alexandra
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I'm forgetting the original question. Is it not about payout on terms more than 2years if a bank goes down?

CDIC says:

TERM DEPOSITS "Term Deposits including GIC's are eligible for CDIC deposit protection. For example; a GIC with an original term of 7 years would be eligible."
As far as I know, new GIC's are now insured under CDIC up to ten years. Up to a couple of years ago, it was 5.

What am I missing?

January 23, 2023
2:18 pm
Norman1
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The question was what happens if CDIC cancels a member's deposit insurance while one's GIC won't mature until years later.

January 25, 2023
12:57 pm
savemoresaveoften
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Norman1 said
The question was what happens if CDIC cancels a member's deposit insurance while one's GIC won't mature until years later.  

I dont think it has happened in the past when CDIC will just cancel a member's deposit insurance if the FI is still solvent. Otherwise it basically implies CDIC insurance is meaningless anyway and no one will put money into any smaller names, let alone term deposits or HISA. I am just thinking of it from a logical business standpoint.

January 25, 2023
1:32 pm
Alexandra
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savemoresaveoften said

I dont think it has happened in the past when CDIC will just cancel a member's deposit insurance if the FI is still solvent. Otherwise it basically implies CDIC insurance is meaningless anyway and no one will put money into any smaller names, let alone term deposits or HISA. I am just thinking of it from a logical business standpoint.  

CDIC says: " deposit insurance protects your savings if your F.I. fails. The CDIC automatically insures your eligible deposits. This applies to deposit holder CDIC Members Institutions."

GIC's are now insured up to a 10 year term.

Revoking the Insurance in my mind would mean that any deposits made after that date, would not be insured. The entire idea around CDIC is that if your bank fails for whatever reason your ELIGIBLE deposits before that date would be insured.

January 25, 2023
8:18 pm
Vatox
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Alexandra said

CDIC says: " deposit insurance protects your savings if your F.I. fails. The CDIC automatically insures your eligible deposits. This applies to deposit holder CDIC Members Institutions."

GIC's are now insured up to a 10 year term.

Revoking the Insurance in my mind would mean that any deposits made after that date, would not be insured. The entire idea around CDIC is that if your bank fails for whatever reason your ELIGIBLE deposits before that date would be insured.  

Totally agree here. As long as you open the GIC, while they have CDIC coverage, it’s insured.

EDIT: there is no way a GIC would be uninsured after the 2 year period if it was opened while insured. The reason is simple, you aren’t given the opportunity to close it. Or perhaps you would be, and then I would say it won’t be covered because you decided to risk. The 2 year period is for withdrawable funds like savings.

January 27, 2023
10:33 am
LJT
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Scotiabank Lunar New Year bonus rate GIC 388 days at 5.2%.

January 27, 2023
12:35 pm
Rail Baron
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LJT said
Scotiabank Lunar New Year bonus rate GIC 388 days at 5.2%.  

Does anyone know why some FIs offer unique numbers of days for their GICs, while others stick to months and years?

January 27, 2023
1:14 pm
Norman1
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In the case of Scotiabank, the 388 days is from Chinese numerology. The 8's are considered lucky under Chinese numerology.

If they were trying to appeal to Satanic followers, they would offer a 366 day 4.666% GIC. sf-laugh

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