5 year GIC 2.5 % at Canadian Tire Bank. Warm?
The next CDIC member (that I can find) with the highest rate is ICICI bank @ 2.05% and CIBC @ 2.00% for a 5 year GIC.
http://www.redflagdeals.com/feature/can ... es-annual/
Mar 18th, 2017 3:40 pm
Mar 18th, 2017 3:46 pm
Mar 19th, 2017 10:16 am
Mar 19th, 2017 10:32 am
Even if Bank of Canada does not raise interest rates (they are talking about cutting the rate) the Canadian mortgage and savings rates may go up anyways. Our economy is linked to the U.S. and we cannot operate in a vacuum.alvisblue wrote: ↑Mar 19th, 2017 10:16 amYes, it's highest, but would you ready to be locked at this rate for 5 years? US Fed is raising interest, but no one know if Bank of Canada would raise or not.
You can high interest saving account at 2% from EQbank. Unless you have significant of amount, I would rather put them in 2% saving and wait 1 year for see the interest change.
Mar 19th, 2017 3:45 pm
Mar 19th, 2017 9:26 pm
Mar 19th, 2017 11:15 pm
Mar 20th, 2017 12:00 am
Don't forget income taxeshouska wrote: ↑Mar 19th, 2017 3:45 pmInteresting that (up until this past Friday) you could therefore borrow against your house at 2.35% (hsbc-hsbc-5-year-fixed-mortgage-2-35-2081339/) and just deposit it in a GIC at 2.5% and make risk-free money
(Yeah, 0.15% is not much and you'd have to make principal repayments on the mortgage, so not actually *practical* in any way, but an indication of how atypical both this and the mortgage rates are...)
Mar 20th, 2017 7:00 am
Interest paid on a loan whose proceeds are used to generate income is tax-deductible, so you'd only pay taxes -- if structured right -- on the 0.15%
Mar 20th, 2017 7:16 am
Mar 20th, 2017 1:11 pm
Yes.houska wrote: ↑Mar 20th, 2017 7:00 amInterest paid on a loan whose proceeds are used to generate income is tax-deductible, so you'd only pay taxes -- if structured right -- on the 0.15%
Of course this would not actually be a worthwhile leveraged investment, but any risk-free arbitrage opportunity means the markets aren't working quite right. In this case, both Canadian Tire and HSBC are both somewhat desperately seeking market share in a way that is long-term unsustainable.
Mar 20th, 2017 11:20 pm
Mar 21st, 2017 8:37 am
Mar 21st, 2017 1:08 pm
Are you near retirement or is this just for a small portion of your portfolio?alli wrote: ↑Mar 20th, 2017 11:20 pmThanks for all your advise. I understand 2.5% is not a great rate, but I try not to time the market or predict interest rate. Many, many much more educated and experienced people have tired and failed. I still remember not long ago a 5 year GIC with 4% rate and everyone think it is too low
I just find it interesting that Canadian Tire bank can offer this rate (0.45% higher than the next CDIC member). Like houska said, they are desperately seeking market share and I would like to take advantage of any market inefficiency.
I simply cannot found any risk-free (and guaranteed by the Government of Canada) RRSP investment that will pay 2.5% at this time
Mar 21st, 2017 3:50 pm
I am not aware that either Oaken or CDF is a member of CDIC. They are not listed on the CDIC website, although under further looking, there own website did mention they are covered under their respective parent company.