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Any Chinese New Year GIC promo this year ?
January 30, 2023
10:17 pm
Canadianbull
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Understood Loonie. I think I will invest $94980 and choose annual pay option for non registered account.
Can I do the same for registered account? My limit is $67999. Is it better not to take money out from registered account if I don't need? Or stick with annual pay option for both?

January 31, 2023
12:18 am
Loonie
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I would not take money out of registered account unless there is a need to put it somewhere else or spend it. It's better to let it compound. With about 68K, this will not be an issue for five years at current rates but you may need to reconsider when it matures - you may need to split it up at that time and put it in two different FIs.

January 31, 2023
2:23 am
Canadianbull
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Thanks ✅️

January 31, 2023
2:39 pm
Canadianbull
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Question: I wonder if anyone here did go above CDIC coverage? sf-wink

February 1, 2023
9:22 am
Wayno
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There is no need to go above the CDIC $100K (Banks) and FSFA $250K
(Ont. Cu's) limits for investment GICs. You can follow the rates and
spread the money between financial institutions...
e.g. $95K, @5%,5yrs & Interest Paid Annually for Banks.

It takes some time and planning to minimize your risk and that is the value of this informative web site !

February 1, 2023
11:02 am
Canadianbull
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Wealthone is not offering the annual pay option anymore. It's 5 years fixed no redeemable only.

February 1, 2023
11:04 am
savemoresaveoften
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Canadianbull said
Wealthone is not offering the annual pay option anymore. It's 5 years fixed no redeemable only.  

even if u call in to ask them to change it after book it online ?

February 1, 2023
11:13 am
Canadianbull
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I talked to the customer service just before I posted.

February 1, 2023
11:41 am
savemoresaveoften
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Canadianbull said
I talked to the customer service just before I posted.  

they change the T&C I guess ? This is on their original email promo:

*Terms and conditions apply. This special GIC Rate Offer is available only until March 1, 2023. Applications and funds must be received on or before the deadline. This Offer is valid only for new deposits. A minimum investment of $1,000 is required for this promotion. Only applies to personal accounts. All GICs are non-redeemable. Wealth One Bank of Canada, in its sole discretion, reserves the right to modify or terminate this Offer at any time, without notice. Rates are subject to change without notice. For GICs with a term of more than one year, interest is paid through one of two options of your choice 1) interest is compounded on each anniversary date of the GIC and then paid on the maturity date; or 2) interest is paid annually to the savings account opened for you on your behalf. For terms of one year or less, simple interest is calculated and paid at maturity. Deposits are eligible for Canada Deposit Insurance Corporation (CDIC) insurance. Offer applies to registered and non-registered GICs. See Terms and Conditions for more details.

February 1, 2023
12:42 pm
Canadianbull
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Thanks for sharing this message.
I will call them again tomorrow morning.

February 1, 2023
12:51 pm
Alexandra
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Canadianbull said
Thanks for sharing this message.
I will call them again tomorrow morning.  

I have always had to phone W1 to receive the annual interest payments. Had to purchase the GIC first, then phone them to change to the annual payments.

February 1, 2023
1:02 pm
canadian.100
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Canadianbull said
Wealthone is not offering the annual pay option anymore. It's 5 years fixed no redeemable only.  

That is a good cash flow strategy (if W1 is a cash strapped FI) to avoid paying out interest payments to depositors before ultimate maturity in 5 years.
I would much prefer receiving annual interest payments on any terms more than the one year - not one lump sum at end of 5 years. I believe you have to pay income tax annually on the year's accrued interest even if you only receive all the interest at maturity in 5 years.

February 1, 2023
1:21 pm
Bill
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You're right about the tax treatment, CRA site says "Interest on a compound GIC is paid when the investment is cashed, and not annually. The income you report is based on the interest you earned during each complete investment year. For example, if you made a long-term investment on July 1, 2021, report the interest that accumulated up until the end of June 2022 on your 2022 return even if you do not receive a T5 slip. Report the interest from July 2022 to June 2023 on your 2023 return."

February 1, 2023
1:55 pm
Loonie
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Canadianbull said
Wealthone is not offering the annual pay option anymore. It's 5 years fixed no redeemable only.  

Is it possible they misunderstood your question?
You are not asking for "redeemable". You are asking for annual payout of interest only, to a savings account which they will set up for you for this purpose. From there, you can get the money out by pulling it from another FI.

February 1, 2023
5:15 pm
Norman1
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Bill said
You're right about the tax treatment, CRA site says "Interest on a compound GIC is paid when the investment is cashed, and not annually. The income you report is based on the interest you earned during each complete investment year. For example, if you made a long-term investment on July 1, 2021, report the interest that accumulated up until the end of June 2022 on your 2022 return even if you do not receive a T5 slip. Report the interest from July 2022 to June 2023 on your 2023 return."

That CRA text is poorly worded and only applies to what is defined as an "investment contract" in Income Tax Act subsection 12(11). An investment that compounds annually or more frequently is not an "investment contract".

Interest on a GIC, like Hubert's one-year term, that compounds quarterly is reported as each quarterly interest payment is added to the principal.

February 1, 2023
5:53 pm
Bill
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Norman1, I'm not clear what you mean. Below is the link from where the CRA wording was taken, in a section dealing with GICs, even specifically mentioning those over 1 year where "Interest on a compound GIC is paid when the investment is cashed, and not annually."

Sticking with the CRA example, are you saying the CRA example regarding the July 1, 2021 purchase is incorrect re the first 2 years of a 5-year GIC where all interest is paid at maturity? If so, how should the interest income be reported in the 2 years outlined in that example, assuming it's a 5-year GIC as described?

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12100-interest-other-investment-income/line-12100-bank-accounts-term-deposits-guaranteed-income-certificates-gics-other-similar-investments.html

February 1, 2023
6:35 pm
Norman1
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Depends on the compounding of the GIC. These are when each compounded interest payment is reported:

Tax Year
2021
Tax Year
2022
Tax Year
2023
Annual
compounding
July 1, 2022 July 1, 2023
Monthly
compounding
July 31, 2021
August 31, 2021
Sept 30, 2021
Oct 31, 2021
Nov 30, 2021
Dec 31, 2021
Jan 31, 2022
Feb 28, 2022
Mar 31, 2022

Dec 31, 2022
Jan 31, 2023
Feb 28, 2023
Mar 31, 2023

Dec 31, 2023
Monthly
compounding
August 1, 2021
Sept 1, 2021
Oct 1, 2021
Nov 1, 2021
Dec 1, 2021
Jan 1, 2022
Feb 1, 2022
Mar 1, 2022

Dec 1, 2022
Jan 1, 2023
Feb 1, 2023
Mar 1, 2023

Dec 1, 2023
February 1, 2023
7:05 pm
Bill
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So you're saying more than it's just "poorly worded". You're saying the following statement, specifically about GICs that compound monthly for example, is in fact incorrect:

"For example, interest on a compound guaranteed investment certificate (GIC) is earned on a monthly basis and is automatically reinvested, earning compound interest until the bond is cashed or matures...................The income you report is based on the interest you earned during each complete investment year."

You're saying the "complete investment year" part is an error when you're talking GICs, correct?

February 1, 2023
7:18 pm
savemoresaveoften
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Isnt the T4 issuer suppose to follow the official tax rule since that is sent to both the investor and CRA ? If so just report whatever the T4 says..

February 1, 2023
7:42 pm
Norman1
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Bill said

You're saying the "complete investment year" part is an error when you're talking GICs, correct?

That's right. The "complete investment year" part does not apply to GIC's and bonds that compound or pay interest annually or more frequently.

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