Lighthouse Credit Union | Page 2 | Your stories | Discussion forum

AltaRed said
I do not know of any brokerage, DIY or otherwise, that would carry GICs from issuers that are NOT CDIC insured, and not I think, nationally available. There could be exceptions but I've not seen them in the big bank brokerages.  

And, by extension, brokers would also offer Provincially covered Credit Union GIC's that are covered by their respective jurisdictions as opposed to Federal CDIC coverage.

Stephen

BMO InvestorLine is currently offering GIC's from provincial Vancouver City Savings Credit Union:

VANCITY*** 1 year 3.400%
VANCITY*** 2 years 3.250%
VANCITY*** 3 years 3.300%
VANCITY*** 4 years 3.350%
VANCITY*** 5 years 3.400%

*** Vancity GICs are not eligible for deposit insurance coverage by the Canada Deposit Insurance Corporation (CDIC) but they are 100% guaranteed by the Credit Union Deposit Insurance Corporation of British Columbia.

It is not a question of CDIC coverage. It is a question of whether or not the GIC issuer can handle the amount of deposits that a dealer like BMO InvestorLine, BMO Nesbitt, RBC Dominion Securities, or RBC Direct Investing can raise before the rate can be yanked at the end of the day.

A small credit union, like Lighthouse CU, with a current loan book of $200 million, wouldn't be able to handle another $100 million or $200 million coming their way in a day or two. Such issuers would work with a smaller dealer, like a local deposit broker.

Las week I was shopping for a 3Y GIC to put into my GIC ladder. I directly called various FI and the three brokers Peter has listed, offering them to bring in $ for by me defined 3Y rate. LHCU was willing to listen and won. I am an OK driving distance from LHCU. We got 4.25% for 3Y and a $50. each gift certificate (I chose for Amazon) for opening the accounts. Employees are extremely helpful and cooperative with an 'we can' attitude. I never had an FI noticing, that an expiry in three years would fall on a Saturday, and proactively moving the expiry date for the following workday on Tuesday, Monday being a holiday day. We have open the accounts on-line and fund the GICs in the branch. They said something about doing everything online, but I am not sure to what extent (I tuned out), as I prefer to visit the FI entity to verify that it really exists, before forking out any dough. And, of course, staying within the coverage limits. The contact was Yoni Berger, ext:116.

julio said
.....They said something about doing everything online, but I am not sure to what extent ...  

According to information I was provided over the telephone, there is no online capability to transfer funds electronically (EFT), so the only benefit to dealing with Lighthouse is with GIC's for anyone who cannot visit their Toronto brick/mortar location.

Probably the best arrangement is to deal through a broker for Lighthouse.

Stephen

I was in the process of signing up online for an account. During the process, the Terms and Conditions popped up on the screen. (See screenshot).

According to the text in the screenshot:
"HETER ISKA
The Financial Institution conforms to Jewish law and where required by Jewish law utilizes a heter iska kloli prepared for the Financial Institution by Halacha Institute of Toronto with respect to its loans and interest. The heter iska is held in the files of the Financial Institution."

I had not heard of a Heter Iska agreement. So I looked it up.
I found this explanation, at the website for the Montreal Jewish Community Centre.
https://www.jccmontreal.org/heter-iska/

Excerpt:
"Legally, the difference is that in the case of a loan the money is no longer the property of the lender. From the moment the borrower receives it, it is his in every respect (on the premise that he assumes the obligation to make a payment for the same amount to the lender at some future date)."

Now, I wasn't going to be taking out a loan. However, I don't know how the word "loan" is defined in this agreement. After all, technically, when you deposit money in a bank, you're not entirely the owner any more. You're more of a rights holder.

So, no thanks. I don't like the sound of this at all. Anyone else care to comment?

I would contact Lighthouse Credit Union and find out if their heter iska kloli applies to you, a non-Jewish member.

The credit union may have no issue receiving interest from and paying interest to non-Jewish members.

For those, who would shy away because of heter iska GIC structure, here is an email I received today regarding this topic:

Hello Julio,
Thank you for contacting the Financial Services Regulatory Authority of Ontario (FSRA). We can confirm that Lighthouse Credit Union is an active member of the Financial Services Regulatory Authority of Ontario (FSRA). As such, eligible deposits held at Lighthouse CU — including Guaranteed Investment Certificates (GICs) — are insured up to $250,000 per depositor per credit union for non-registered accounts.
For registered accounts (e.g., RRSPs, TFSAs), only insurable deposits are covered with unlimited deposit insurance. For full details, please visit: Credit Unions and Deposit Insurance | Financial Services Regulatory Authority of Ontario
To learn more, you may find FSRA’s Deposit Insurance Reserve Fund (DIRF) brochure helpful.

Regarding your question about the heter iska structure: FSRA’s deposit insurance coverage is based on the nature of the deposit and the credit union’s membership status. The contractual or religious framework used by the credit union for lending or investment purposes — such as heter iska — does not affect the eligibility or coverage of your insured deposits.

If you have further questions about your specific account or deposit structure, we recommend contacting Lighthouse Credit Union directly.
Kind regards,
Kelly, Inquiry and Correspondence Officer
Financial Services Regulatory Authority of Ontario (FSRA)
T: 416-250-7250 or 1-800-668-0128
E: contactcentre@fsrao.ca