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[Simplii Financial] 3% promo on new deposits for 4 months from Simplii (No QC)

  • Last Updated:
  • Dec 7th, 2017 12:30 pm
Jr. Member
May 3, 2008
171 posts
63 upvotes
Markham
sauro88 wrote:
Dec 5th, 2017 8:45 pm
Yes, so you average closing balance would be:

$100,000 * (26 days for Dec. + 31 days for Jan + 28 days for Feb) / 120 days = $70,833 assuming the you don't withdraw anything before Feb. 28, 2018
Pretty sure thats NOT how interest is calculated. Imagine if someone deposits $100,000 on Feb 27th, then per ur example, the interest becomes $100,000 *1/120 *3% *1/365 ? That will be the biggest ripoff in history and guarantee class action lawsuit...
Average closing daily balance only starts counting the day you actually deposit, not from beginning from Nov.
Jr. Member
Dec 22, 2006
114 posts
16 upvotes
Calgary
wongmb wrote:
Dec 5th, 2017 10:16 pm
Pretty sure thats NOT how interest is calculated. Imagine if someone deposits $100,000 on Feb 27th, then per ur example, the interest becomes $100,000 *1/120 *3% *1/365 ? That will be the biggest ripoff in history and guarantee class action lawsuit...
Average closing daily balance only starts counting the day you actually deposit, not from beginning from Nov.
The calculation for the promotional interest is:

Average closing balance during the offer period * promotional interest * Number of days for the offer period

So interest for 1 day on $100,000 = ($100,000*1/120) * 3% * (120/365) = $8.22 or $986.30 ($8.22*120) if $100,000 was deposited in Nov. 1st.

This is the same as $100,000 * 3% * 120/365 = $986.30
Newbie
Nov 24, 2017
31 posts
11 upvotes
sneakerfan wrote:
Dec 5th, 2017 9:44 pm
Thank you for pointing this out...
With this being said, if I move my money to simplii by Dec 31, my bonus 2% will become 1%, plus the 1% base interest = 2% in total.
Fine... It is not a true 3% but still better than nothing...
Tricky promotion huh? This needs Marketplace investigation
What is not clearly stated in the fine prints and must be assumed, as per the reply of sauro88, is that you will be receiving interest for each day of those 120 days (nov1 to Feb 27) even if you had zero dollar in your account for any number of days. It does make 'some' sense, but it is a very weird way to conduct a business. But the thing is that it is not clearly stated in the fine prints. You have to assume it works this way.

I might write to them to ask for clarification. Who knows if I will get an answer and how long it might take given how slow everything is happening with Simplii.
Jr. Member
Dec 22, 2006
114 posts
16 upvotes
Calgary
NumberThree wrote:
Dec 5th, 2017 10:46 pm
What is not clearly stated in the fine prints and must be assumed, as per the reply of sauro88, is that you will be receiving interest for each day of those 120 days (nov1 to Feb 27) even if you had zero dollar in your account for any number of days. It does make 'some' sense, but it is a very weird way to conduct a business. But the thing is that it is not clearly stated in the fine prints. You have to assume it works this way.

I might write to them to ask for clarification. Who knows if I will get an answer and how long it might take given how slow everything is happening with Simplii.
PCF or Simplii is smart by using this method of calculation:

Example:
Promotion period 10 days (November 1-10)
Interest : 3%
Closing balance as of Oct.31: $20,000

On Nov. 1, you withdraw $15,000
On Nov. 6, you deposit $30,000

you would think that the interest will be: (New deposit - Base) * 3% * 5/365 = $10,000* 3% * 5/365 = $4.10
but by average closing balance, you will get ($5,000 for 5days + $35,000 for 5 days)/10 = $20,000 for 10 days. However, you base is $20,000 so you will not get ANY interest as the average balance does NOT exceed what you have on Oct. 31. Hope that I can clear out why Simplii calculates promotional interest this way.
Jr. Member
May 3, 2008
171 posts
63 upvotes
Markham
sauro88 wrote:
Dec 5th, 2017 11:10 pm
PCF or Simplii is smart by using this method of calculation:

Example:
Promotion period 10 days (November 1-10)
Interest : 3%
Closing balance as of Oct.31: $20,000

On Nov. 1, you withdraw $15,000
On Nov. 6, you deposit $30,000

you would think that the interest will be: (New deposit - Base) * 3% * 5/365 = $10,000* 3% * 5/365 = $4.10
but by average closing balance, you will get ($5,000 for 5days + $35,000 for 5 days)/10 = $20,000 for 10 days. However, you base is $20,000 so you will not get ANY interest as the average balance does NOT exceed what you have on Oct. 31. Hope that I can clear out why Simplii calculates promotional interest this way.
yes if ur balance ever dips below the Oct31 balance, you wont earn full 3%. In other words, you get penalize for dropping below original balance.
Jr. Member
May 3, 2008
171 posts
63 upvotes
Markham
sauro88 wrote:
Dec 5th, 2017 10:43 pm
The calculation for the promotional interest is:

Average closing balance during the offer period * promotional interest * Number of days for the offer period

So interest for 1 day on $100,000 = ($100,000*1/120) * 3% * (120/365) = $8.22 or $986.30 ($8.22*120) if $100,000 was deposited in Nov. 1st.

This is the same as $100,000 * 3% * 120/365 = $986.30
Even tho the math is the same (1/120* 120/365 = 1/365), It is much simpler when showing 1/365, as the money was in the account 1 day. Compared to showing 1/120 of the money in the account 120 days.

So your other example of $70,833 average principal is based on a full 120 days as well I suppose.
Jr. Member
Dec 22, 2006
114 posts
16 upvotes
Calgary
wongmb wrote:
Dec 6th, 2017 8:41 am
Even tho the math is the same (1/120* 120/365 = 1/365), It is much simpler when showing 1/365, as the money was in the account 1 day. Compared to showing 1/120 of the money in the account 120 days.

So your other example of $70,833 average principal is based on a full 120 days as well I suppose.
For 1 day, it's turn out to be the same but Simplii will paid less interest over the 120 days by using the average calculation as you said in post #620 (you get penalize for dropping below original balance). That's why Simplii only paid out the promotional interest after 120 days as it needs to calculate the average balance over 120 days period.

As for the other example, the $70,833 average is based on a full 120 days.
Jr. Member
May 3, 2008
171 posts
63 upvotes
Markham
sauro88 wrote:
Dec 6th, 2017 10:05 am
For 1 day, it's turn out to be the same but Simplii will paid less interest over the 120 days by using the average calculation as you said in post #620 (you get penalize for dropping below original balance). That's why Simplii only paid out the promotional interest after 120 days as it needs to calculate the average balance over 120 days period.

As for the other example, the $70,833 average is based on a full 120 days.
yeah essentially what they are doing is saying if u drop below original balance, then whatever you earn on those dates that you are over gets "diluted".
Pretty sneaky and crafty. The name is Simplii but how they calculate is definitely complicated and skew in their favor. Oh banks....
Newbie
Dec 26, 2012
21 posts
8 upvotes
TORONTO
i just pulled my cash savings from them. when they bought PC, my interest rate dropped from 2.8% i was getting to 1% and i'm tired of chasing and keeping track of promo rates. I just moved everything to EQ for 2.3% and called it a day.
Jr. Member
Dec 22, 2006
114 posts
16 upvotes
Calgary
wongmb wrote:
Dec 6th, 2017 10:57 am
yeah essentially what they are doing is saying if u drop below original balance, then whatever you earn on those dates that you are over gets "diluted".
Pretty sneaky and crafty. The name is Simplii but how they calculate is definitely complicated and skew in their favor. Oh banks....
Very sneaky indeed plus you can't keep track of your average over 120 days... too complicated. I left my money with Tangerine (2.75%) but will move it to Simplii by the end of December and hope Tangerine will offer something close to 3% in January.
Deal Guru
User avatar
Feb 24, 2008
13533 posts
4320 upvotes
Gatineau
wongmb wrote:
Dec 6th, 2017 8:38 am
yes if ur balance ever dips below the Oct31 balance, you wont earn full 3%. In other words, you get penalize for dropping below original balance.
You may need to choose your words carefully. Penalized would be interpreted as losing money you have earned.

You basically "do not earn" the bonus 2% on the days of which your balance drops below the October 31st balance. Its as simple of that.

If your balance on October 31st was $10,000, then during this 120 promo, any end of day balance above $10,000 will qualify for 3%. Any end of day balance equal to or below $10,000 would only qualify for the normal 1%.

djino
Last edited by djino on Dec 6th, 2017 11:31 am, edited 1 time in total.
Deal Guru
User avatar
Feb 24, 2008
13533 posts
4320 upvotes
Gatineau
sauro88 wrote:
Dec 6th, 2017 11:18 am
Very sneaky indeed plus you can't keep track of your average over 120 days... too complicated. I left my money with Tangerine (2.75%) but will move it to Simplii by the end of December and hope Tangerine will offer something close to 3% in January.
Its not sneaky at all. All you need to know is what balance you had on October 31st. You guys seem to be over complicating this.

djino
Deal Addict
User avatar
Jul 15, 2003
2649 posts
442 upvotes
Ontario, Canada
NumberThree wrote:
Dec 5th, 2017 8:21 pm
Thanks for your contribution. If what you wrote is correct, then it means Simplii would be paying interests for the days when your balance is zero. This is a very odd way of doing business.
Just adjust your scenario. Depost $100,000 nov 1st. withdraw $99,999.99 Dec 1st. Now there is never a zero balance. With that mental block out of the way you can see the math works just like everyone else has been saying.
Jr. Member
Dec 22, 2006
114 posts
16 upvotes
Calgary
djino wrote:
Dec 6th, 2017 11:31 am
You may need to choose your words carefully. Penalized would be interpreted as losing money you have earned.

You basically "do not earn" the bonus 2% on the days of which your balance drops below the October 31st balance. Its as simple of that.

If your balance on October 31st was $10,000, then during this 120 promo, any end of day balance above $10,000 will qualify for 3%. Any end of day balance equal to or below $10,000 would only qualify for the normal 1%.

djino
This is partly true... Simplii is counting on that people won't notice the difference. The statement " Any end of day balance equal to or below $10,000 would only qualify for the normal 1% " is true for the normal 1%. However, for the promotional interest of 2% any day that you drop below $10,000 will result in a "negative" balance NOT ZERO. This "negative" amounts will be added to your total and average out. For example:

Oct. 31: Balance $10,000, promotional interest=2%, 5 days promotion.

Nov. 01 Withdraw $5,000 -> Closing Balance = $5,000
Nov. 02 No activity, Closing Balance = $5,000
Nov. 03 No activity, Closing Balance = $5,000
Nov. 04 Deposit $25,000 -> Closing Balance = $30,000
Nov. 05 No activity, Closing Balance = $30,000

By your calculation, there are 2 days the closing balance exceeds $10,000 so the interest should be: ($30,000-$10,000)*2%*2/365=$2.19.
By average daily closing balance method:
Average daily closing balance = ($5,000+$5,000+$5,000+$30,000+$30,000)/5) = $15,000
The promotional interest is : ($15,000-$10,000 (Base))*2%*5/365=$1.37
As you can see, by doing the Average Daily Balance Simplii only paid you $1.37 in interest as oppose to $2.19.
Jr. Member
May 3, 2008
171 posts
63 upvotes
Markham
djino wrote:
Dec 6th, 2017 11:31 am
You may need to choose your words carefully. Penalized would be interpreted as losing money you have earned.

You basically "do not earn" the bonus 2% on the days of which your balance drops below the October 31st balance. Its as simple of that.

If your balance on October 31st was $10,000, then during this 120 promo, any end of day balance above $10,000 will qualify for 3%. Any end of day balance equal to or below $10,000 would only qualify for the normal 1%.

djino
What you said is NOT true as you are implying there is floor of $0 for new balance. That is wrong since once you calculate average, $0 floor no longer applies. If the bonus interest is based on closing DAILY balance above initial balance, then what you said is correct.

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