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Winter 2016 Rate Promotion
January 11, 2016
7:39 am
ertyu
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New promo popped up today. 2.5% on all savings registered or non-registered and an offer of 2.5% on a 2 year GIC as well. Applies to all new or existing balances and new deposits until June 1, 2016.

https://www.zagbank.ca/FinePrint/PromotionWinter2016

January 11, 2016
9:18 am
Ed
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Basically, it continues their Fall 2015 promotion and extends it another two and a half months, without requiring any minimum balance. Nice!

January 11, 2016
7:38 pm
Taxpayer717
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The nice thing about this promotion is that you do not have to phone in to activate your existing account with Zang Bank already earning 2.5% but (originally) only to March 20, 2016 to have this period extended up to June 01, 2016. I was told that it is done automatically. How different from Tangerine with their selective and secretive policy and the need to phone in to make the account earning the promotional rate. Isn't this unconstitutional to be so preferential?

January 11, 2016
7:43 pm
tc
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Those of you who have accounts with Zag,would you be tempted to go over the CDIC limits at 2.5%?
I was with the understanding that Desjardin is a very strong financial co
pls comment

January 11, 2016
7:55 pm
Loonie
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I like the 2yr GIC. Maybe, by then, they will have their computer glitches worked out.sf-wink

For the transfer-in RSP/TFSA GIC, I would want a guarantee from them that they would hold the offer until the transfer arrives, as they do say the offer is subject to being cut off at any point.

January 11, 2016
9:17 pm
Norman1
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tc said

Those of you who have accounts with Zag,would you be tempted to go over the CDIC limits at 2.5%?
I was with the understanding that Desjardin is a very strong financial co
pls comment

I would think carefully before doing that.

Unless there is a formal guarantee from the Desjardin Group, deposits with Zag Bank are backed only by the assets of Zag Bank and by deposit insurance from CDIC.

January 12, 2016
6:58 am
amidat
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While Bank failures are possible, in my opinion the risk is low.

The last time CDIC had to make a payout was in 1996. The 80's and the 90's was the time when a lot of Mortgage and Trust companies went under.

Since then we've had a lot of ups and downs (including the financial crisis in 2009) without any financial institutions (for which a CDIC payout was required) collapsing.

Again, failures are possible but I would consider going over the limit for 6 mths low risk

January 12, 2016
7:31 am
fabafter50
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I am also at odds whether to go over the CDIC limit. Since they have tightened up mortgage lending in Canada it seems like there is less of a risk of collapse, but of course no guarantee on that. The two year GIC at 2.5% is an excellent offer and I would be comfortable putting the guaranteed amount in that and leaving the rest in the savings account until June and see what else pops up.

January 12, 2016
8:28 am
Loonie
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If you want to be fully covered and put in the maximum to 2yr GIC, you should put in about 95,000, assuming annual compounding. When matured, it will be almost 100,000. You want the interest to be covered as well as the principal.
Someone who is good with spreadsheets or calculators can figure out the exact amount

Similarly, for 5yr at same rate (available elsewhere), you can only put in something under 89,000 in order to have full coverage.
The higher the interest rate and the longer the term, the less you can put in.

I just mention this because I find it's easy to forget when imagining what one might do.

January 12, 2016
8:45 am
Loonie
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Actually, now that I have read the fine print, it says that the interest on these GICs is calculated daily and compounded MONTHLY, so they are actually worth a bit more than I thought, and you might need to put in a little less in order to be fully covered by CDIC. I haven't done the exact calculations.

I don't know what this works out to, but on the Hubert 1yr GICs, where the interest is compounded every 3 months, it amounts to 1 or 2 basis points extra over the course of a year. With Tangerine dealing in such tiny fractions now, this might even matter!sf-surprised - perhaps enough to pay your transfer-out fee, if RSP etc., assuming there is one.

January 12, 2016
10:23 am
Yatti420
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I just got this email! Promo extension is good news.. Easier then Tangerine at this point..

January 12, 2016
11:51 am
Bill
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Got the email too, when I log in to my savings account Account - Activity it shows the rate there as 2.5%.

January 12, 2016
3:40 pm
rhvic
Victoria, BC
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Since Tangerine will not give me more than 2% over the next six months, I have now instead opened a Zag account. Their offer of 2.5% for six months looks pretty good for now, even though their regular rate of 0.8% is awful (similar to Tangerine and PCF usual rates). I would not go over the CDIC limit on this account though.

January 19, 2016
2:30 pm
rhvic
Victoria, BC
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I got an email today from Zag telling me I can now log in. A few observations:

- there is no link shown yet to my external chequing account on which I wrote the initial deposit. Thus hard to make new on-line transfers. It may take 5 or 6 business days to clear this up.

- I asked Zag via their chat for their bank ID and transit numbers. They told me these are 342 and 52109 - BUT they are not yet active and the date for their availability could be up to a month from now!!

So, it seems the only way I can get money from a savings account at one institution over to Zag is to first move it to the institution on which I wrote the cheque, and then pull the money in via Zag once they activate the link to my chequing account on their end. This could be a few weeks given holds at each step of the process.

These new banks are not making things very easy or convenient!

January 19, 2016
3:14 pm
Norman1
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Zag Bank won't activate the link to the external chequing account until five or six business days later. I suspect that is to ensure the cheque is genuine and not returned.

There won't be any hold if one pushes money from the savings account end to the chequing account, instead of pulling money at the chequing account end from the savings account.

January 19, 2016
9:56 pm
rhvic
Victoria, BC
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Norman1 said
There won't be any hold if one pushes money from the savings account end to the chequing account, instead of pulling money at the chequing account end from the savings account.

Actually the hold from savings to chequing will be there, because each is in a different institution. I have money in Hubert savings, which will have to go to PCF chequing, and then to ZAG. Complex!

I look forward to eventually setting up a direct transfer link for my own use on the web between Zag and Hubert, but that is currently not possible.

January 20, 2016
9:44 am
Winnie
Ontario
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rhvic said

Norman1 said
There won't be any hold if one pushes money from the savings account end to the chequing account, instead of pulling money at the chequing account end from the savings account.

Actually the hold from savings to chequing will be there, because each is in a different institution. I have money in Hubert savings, which will have to go to PCF chequing, and then to ZAG. Complex!

I look forward to eventually setting up a direct transfer link for my own use on the web between Zag and Hubert, but that is currently not possible.

That is not correct. There won't be any hold, I tried that many times.
For example, if you will transfer money from Hubert savings to PCF chequing today, Jan 20, money will be in PCF chequing Jan 22 and all money will be available (no hold). So, today you also can do postdated transaction dated Jan 21 from PCF to Zag. In this case Zag will actually transfer money from PCF on Jan 22 and everything will be ok.
As you can see, it very easy to do and takes only 2 business days.

January 20, 2016
2:25 pm
AltaRed
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Every bank has a hold on personal cheques, albeit the $$ level at which the hold takes effect depends on one's past banking relationship with that bank. Holds in the big banks are about the same at 4-5 business days.

Once the external link is in place, transfers to/from Zag to the linked external account will (should) be flawless. Zag simply said it takes that long to complete the process. The external link will show once it is active.

January 20, 2016
3:27 pm
rhvic
Victoria, BC
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AltaRed said

Every bank has a hold on personal cheques, albeit the $$ level at which the hold takes effect depends on one's past banking relationship with that bank. Holds in the big banks are about the same at 4-5 business days.

Once the external link is in place, transfers to/from Zag to the linked external account will (should) be flawless. Zag simply said it takes that long to complete the process. The external link will show once it is active.

Of course what I would like to do is establish a direct link between Zag and Hubert. But I cannot do that - Hubert is not a chequing account, and Zag does not have active bank ID or transit numbers with which to set up a link. So I am stuck having to use my chequing account at PCF as an intermediary.

January 20, 2016
4:14 pm
AltaRed
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Have used Scotia chequing as my hub (intermediary) for years. Yes, it is a few extra mouse clicks and a few more days for the full transaction to take place but a lot easier than moving money used to be.

I've done that on purpose, always using Scotia as my hub. It is much easier for me to draw a Flow Chart of possible fund flows and stick it in my Estate file...for my Enduring Power of Attorney and Executors of my estate that way. Looks like a wagon wheel except no outside perimeter.

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