Personal Finance

Official RFD thread for High Interest Savings Accounts (See Thread Summary for Updates)

Deal Guru
Jan 30, 2012
10045 posts
3758 upvotes
multi city dweller
cmoibenlepro wrote: But deposits and interest are insured by CDIC
Does CDIC have sufficient resource to cover all depositors ... in the worst case scenario ...?
Deal Addict
User avatar
Sep 10, 2009
1289 posts
255 upvotes
Montreal
LOL808 wrote: Does CDIC have sufficient resource to cover all depositors ... in the worst case scenario ...?
It's the federal government. Worst case scenario they can print money to cover the debt.
But before that the failing small bank would be taken over by a competitor.
Deal Expert
Jan 7, 2002
29711 posts
29133 upvotes
Waterloo, ON
LOL808 wrote: Does CDIC have sufficient resource to cover all depositors ... in the worst case scenario ...?
In addition to what @cmoibenlepro said, consider that if CDIC's insurance pool became exhausted it would likely mean that Canada's financial system is in such deep shitdoodoo -- on a scale similar to what COVID-19 may do to the economy in general -- thatOttawa will have no alternative but to step in and bail them out by any and all means necessary. If that happens, especially if Ottawa is unsuccessful, I'd be worried about more important things like food, shelter, safety and even the supply of toilet paper ;)
veni, vidi, Visa
Deal Guru
Jan 30, 2012
10045 posts
3758 upvotes
multi city dweller
cmoibenlepro wrote: It's the federal government. Worst case scenario they can print money to cover the debt.
But before that the failing small bank would be taken over by a competitor.
Is that how the CDIC law works? Is the federal govt obligated under the law to make whole every depositors?

Does anyone know how "bank bail-in" work?
Deal Expert
Jan 7, 2002
29711 posts
29133 upvotes
Waterloo, ON
LOL808 wrote: Is that how the CDIC law works? Is the federal govt obligated under the law to make whole every depositors?
Ottawa isn't obligated by legislation to bail out a bank. But if a big-5 bank is in trouble, or if several smaller banks are in trouble, the federal government "will have no alternative but to step in and bail them out by any and all means necessary." If they don't the consequences to our economy could be a lot worse than just the bank failure(s).

Some possible options:
1. Extend loans to CDIC and/or the banks so they can pay depositors.
2. Use "moral suasion" to get other banks to support, take over, buy out, etc. failing banks.
3. Print money to pay depositors once CDIC funds are exhausted.
4. Raise taxes.

All of these options have costs. For instance printing money is easy but could flame inflation. Raising taxes could result in voter backlash, etc. But these, especially 3. and 4. are desperate measures taken at times of crisis. I suspect that if we ever get to that point getting back our deposits would be the least of our worries.

This is doomsday stuff like worrying about what would happen in the event of full scale nuclear war, an alien invasion (or a pandemic virus that infects millions and kills 1,000s! ;) ) Even if you had your cash it probably wouldn't be of much value. In those sorts of situations, water, food, ammo, medicine, gasoline, cigarettes, gold, etc. would become the currency of the realm. So relax...
veni, vidi, Visa
Deal Addict
User avatar
Jun 23, 2017
1510 posts
1076 upvotes
Toronto, ON
Darkman wrote: If the rates are going to 0% or into negative territory .. -- I'll take all out ... in cash ... and keep it at home, under the mattress .... :D
was there ever a point where clients paid the banks to hold onto their money? kinda like my investment advisor who values my portfolio ever quarter and skims off a few percentage to pay himself?
Deal Addict
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Dec 17, 2008
2781 posts
2300 upvotes
Winnipeg
Updated as of today March 21, 2020.
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Deal Addict
Mar 8, 2013
2950 posts
1611 upvotes
bylo wrote: In addition to what @cmoibenlepro said, consider that if CDIC's insurance pool became exhausted it would likely mean that Canada's financial system is in such deep shitdoodoo -- on a scale similar to what COVID-19 may do to the economy in general -- thatOttawa will have no alternative but to step in and bail them out by any and all means necessary. If that happens, especially if Ottawa is unsuccessful, I'd be worried about more important things like food, shelter, safety and even the supply of toilet paper ;)
I would add number 1 Water, then number 2 Food, etc. , ... , then number 296 toilet paper. Let's get real here, how valuable is toilet paper for survival ?
Deal Expert
Jan 7, 2002
29711 posts
29133 upvotes
Waterloo, ON
akaManny wrote: Let's get real here, how valuable is toilet paper for survival ?
What part of " ;) " didn't you understand? ;)

[My sarcasm was an allusion to the current panic over TP -- the last item I'd be worried about if life as we know it was about to come to an end.]
veni, vidi, Visa
Deal Addict
Mar 8, 2013
2950 posts
1611 upvotes
bylo wrote: What part of " ;) " didn't you understand? ;)

[My sarcasm was an allusion to the current panic over TP -- the last item I'd be worried about if life as we know it was about to come to an end.]
Yeah, I understood your sarcasm. I was trying to make 2 separate points - the first is that water should be included, and the second, is that the run on toilet paper is unbelievable. Sorry, it didn't come across the way I intended.
Deal Fanatic
Oct 7, 2007
9404 posts
5374 upvotes
LOL808 wrote: Is that how the CDIC law works? Is the federal govt obligated under the law to make whole every depositors?

Does anyone know how "bank bail-in" work?
Try googling Cyprus.
Deal Addict
User avatar
Jun 23, 2017
1510 posts
1076 upvotes
Toronto, ON
What is Tangerine Savings paying for funds deposited today! Is there any limited-time promo going on? or just the posted 0.4%?
Deal Addict
Sep 19, 2009
2280 posts
991 upvotes
Toronto
905P4N6 wrote: What is Tangerine Savings paying for funds deposited today! Is there any limited-time promo going on? or just the posted 0.4%?
It is different for each client. Check your account.
Deal Expert
Jan 7, 2002
29711 posts
29133 upvotes
Waterloo, ON
905P4N6 wrote: What is Tangerine Savings paying for funds deposited today! Is there any limited-time promo going on? or just the posted 0.4%?
Did you look at their website?
Did you look at their website in Incognito mode?
Did you see a difference?
veni, vidi, Visa
Deal Addict
User avatar
Jun 23, 2017
1510 posts
1076 upvotes
Toronto, ON
andrew4321 wrote: It is different for each client. Check your account.
Excellent... I got my answer in the "Insights" tab ...
Earn more interest with your special savings rate until May 31, 2020
You’re earning 2.50%* interest on new deposits to your Tangerine Savings Account(s), Tax-Free Savings Account(s), RSP Savings Account(s) and US$ Savings Account(s) until May 31, 2020. Why not move money to your Account(s), or open a new Account, to make the most of your special rate?
Sr. Member
Mar 23, 2015
537 posts
232 upvotes
Westmount, QC
I have a TFSA with Achieva, I am thinking to cash it out since Achieva is not CDIC insured. Do you think dgcm is as reliable as CDIC ?

With all the crazy situation going on I won't be surprised if situation goes bad for another 3 months that some small players like achieva shut down..
Deal Addict
User avatar
Dec 17, 2008
2781 posts
2300 upvotes
Winnipeg
blackCold wrote: I have a TFSA with Achieva, I am thinking to cash it out since Achieva is not CDIC insured. Do you think dgcm is as reliable as CDIC ?

With all the crazy situation going on I won't be surprised if situation goes bad for another 3 months that some small players like achieva shut down..
Cambrian credit union which owns Achieva has over 64,000 members, and 3.8 billion in assets. 17th largest CU as of Sept 2019.
Screenshot_20200322-223004.png
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