Personal Finance

Tangerine 3 months 2.5% and 3% Expiring - any new offer

  • Last Updated:
  • Sep 20th, 2017 9:03 pm
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OK, so as of today(?), they have changed the deal.

Basic interest is now 0.9%, up by 0.1%, for all users. However, I'm still getting the same promotional rate, a total of 2.97$. They've cut the extra interest from 2.17% to 2.07%.
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bertvl wrote:
Aug 1st, 2017 7:05 am
OK, so as of today(?), they have changed the deal.

Basic interest is now 0.9%, up by 0.1%, for all users. However, I'm still getting the same promotional rate, a total of 2.97$. They've cut the extra interest from 2.17% to 2.07%.
Yep, that's the "corresponding change" they talk about in the terms and conditions :)
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ml88888888 wrote:
Aug 1st, 2017 6:41 am
There is an easy solution to get promotion rate on interest received. Just move the interest amt received from your savings to your chequing acct and move it back to savings because money deposited from chequing to savings is considered new money. I just finished doing that. That is what I did too with my TFSA money(i.e. move from TFSA->chequing->savings) since I got promote rate on all 'new money' deposited to my TFSA only. So the money I had in my TFSA before the promote rate date of July 5 wouldn't get the promote rate. So it is still better for me to get the promote rate in my savings acct after tax compare to the regular TFSA rate of 0.8 - 0.9%.
"new" money is measured based on current balance minus starting balance Jul 4th minus all interest earned during the promotion.

Moving money out and back into the same account after the promotion has started (Jul 5th) doesn't make any more 'new' money.

Jul 4 $0 balance
Jul 5 $1000 balance ($1000 'new' money)
Jul 31 $0.59 interest at 0.8%
Aug 1 $1.63 interest at 2.2% promo (if 3% promo)
Balance = $1002.22 ... "new" money earning promo interest for August = $1002.22 - $0 - $0.59 - $1.63 = $1000.
Move $2.22 out to chequing, new savings balance = $1000.00
Move $2.22 back into savings, new savings balance = $1002.22 ... it doesn't change the formula.
Promo eligible balance = $1000 - $0 starting balance - $0.59 - $1.63 interest earned ... equals ... $1000 still.

They lay it out pretty clearly ...

"14. Any interest paid into an Applicable Account, including Additional Interest, will not be treated as a new deposit for subsequently calculating Additional Interest payments."

That means as soon as they've paid you any interest, they track that total amount and essentially add it to your starting balance.

$0 starting balance but $2.22 interest earned becomes $2.22 'adjusted starting balance' for August's interest.

You can't just 'take the interest out' ... if you take $2.22 out that's not "the interest" that's just a random $2.22 which could be the original deposit not the interest, LOL. You can't say which dollars are which, they are fungible.
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ace604 wrote:
Aug 1st, 2017 7:08 am
"new" money is measured based on current balance minus starting balance Jul 4th minus all interest earned during the promotion.

Moving money out and back into the same account after the promotion has started (Jul 5th) doesn't make any more 'new' money.

Jul 4 $0 balance
Jul 5 $1000 balance ($1000 'new' money)
Jul 31 $0.59 interest at 0.8%
Aug 1 $1.63 interest at 2.2% promo (if 3% promo)
Balance = $1002.22 ... "new" money earning promo interest for August = $1002.22 - $0 - $0.59 - $1.63 = $1000.
Move $2.22 out to chequing, new savings balance = $1000.00
Move $2.22 back into savings, new savings balance = $1002.22 ... it doesn't change the formula.
Promo eligible balance = $1000 - $0 starting balance - $0.59 - $1.63 interest earned ... equals ... $1000 still.

They lay it out pretty clearly ...

"14. Any interest paid into an Applicable Account, including Additional Interest, will not be treated as a new deposit for subsequently calculating Additional Interest payments."

That means as soon as they've paid you any interest, they track that total amount and essentially add it to your starting balance.

$0 starting balance but $2.22 interest earned becomes $2.22 'adjusted starting balance' for August's interest.

You can't just 'take the interest out' ... if you take $2.22 out that's not "the interest" that's just a random $2.22 which could be the original deposit not the interest, LOL. You can't say which dollars are which, they are fungible.
So what will happen if you take the $2.22 out which is the amt of interest and never put it back? The actual acct balance is $1000 now. Would they pay you the promote rate on $1000 or $997.78?
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ml88888888 wrote:
Aug 1st, 2017 11:40 am
So what will happen if you take the $2.22 out which is the amt of interest and never put it back? The actual acct balance is $1000 now. Would they pay you the promote rate on $1000 or $997.78?
Ya, $997.78. The problem is that you can't take out "the $2.22". You are only taking out "a" $2.22. Taking some money out that coincidentally happens to be the exact amount of the interest even on the same day it is paid out means nothing to them.

It's like a credit card issuer deciding to allocate your min. payment towards the lowest interest portion of balance instead of that high interest portion.

Tangerine subtracts the $2.22 interest from the "bottom" of your pile of money so you can't affect it by playing with money at the "top" of the pile.

You can't affect it by taking it all out either because they've tracked it and won't pay on it. If you take out $1002.22 and put it back they'd just count the first $2.22 as interest earned again.

It lowers your effective promo rate due to (lack of) compounding for the last 2 mo the if the promo by a tiny amount.

Note that PCF also does not compound promo interest. They calculate and pay it out once at the end. At least with Tangerine you get it monthly and then earn base interest on it.
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ace604 wrote:
Aug 1st, 2017 1:40 pm
Ya, $997.78. The problem is that you can't take out "the $2.22". You are only taking out "a" $2.22. Taking some money out that coincidentally happens to be the exact amount of the interest even on the same day it is paid out means nothing to them.

It's like a credit card issuer deciding to allocate your min. payment towards the lowest interest portion of balance instead of that high interest portion.

Tangerine subtracts the $2.22 interest from the "bottom" of your pile of money so you can't affect it by playing with money at the "top" of the pile.

You can't affect it by taking it all out either because they've tracked it and won't pay on it. If you take out $1002.22 and put it back they'd just count the first $2.22 as interest earned again.

It lowers your effective promo rate due to (lack of) compounding for the last 2 mo the if the promo by a tiny amount.

Note that PCF also does not compound promo interest. They calculate and pay it out once at the end. At least with Tangerine you get it monthly and then earn base interest on it.
Did you have the actual experience(I.e. Calculate the interest paid to the exact amt) or you just interpret what Tangerine says? I calculate all interests received every month and my statement is true.
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ml88888888 wrote:
Aug 1st, 2017 1:55 pm
Did you have the actual experience(I.e. Calculate the interest paid to the exact amt) or you just interpret what Tangerine says? I calculate all interests received every month and my statement is true.
Yes, I've calculated interest in the past and recognized that the promo amount was a bit smaller than I had anticipated - I wasn't excluding the interest portion because I didn't know about that condition at the time. I never dug too deep because it was a tiny difference. I'd have to go back to the last time I had the promo to recalculate interest expected vs earned for month 2 and 3 of the promo. If I randomly happened to calculate interest in the past for the first month of the promo it should have been accurate since there are no excluded balances other than start balance for month 1.

Have you taken interest out of your account every month of the promos in the past?
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ace604 wrote:
Aug 1st, 2017 3:36 pm
Yes, I've calculated interest in the past and recognized that the promo amount was a bit smaller than I had anticipated - I wasn't excluding the interest portion because I didn't know about that condition at the time. I never dug too deep because it was a tiny difference. I'd have to go back to the last time I had the promo to recalculate interest expected vs earned for month 2 and 3 of the promo. If I randomly happened to calculate interest in the past for the first month of the promo it should have been accurate since there are no excluded balances other than start balance for month 1.

Have you taken interest out of your account every month of the promos in the past?
Yes, I did take more than the interest out every month and the interest were always paid correctly.
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ml88888888 wrote:
Aug 1st, 2017 1:55 pm
Did you have the actual experience(I.e. Calculate the interest paid to the exact amt) or you just interpret what Tangerine says? I calculate all interests received every month and my statement is true.
ace604 wrote:
Aug 1st, 2017 3:36 pm
Yes, I've calculated interest in the past and recognized that the promo amount was a bit smaller than I had anticipated - I wasn't excluding the interest portion because I didn't know about that condition at the time. I never dug too deep because it was a tiny difference. I'd have to go back to the last time I had the promo to recalculate interest expected vs earned for month 2 and 3 of the promo. If I randomly happened to calculate interest in the past for the first month of the promo it should have been accurate since there are no excluded balances other than start balance for month 1.

Have you taken interest out of your account every month of the promos in the past?
Ha, by fluke I found an account with a small balance from Feb. that had the promo where I had moved a tiny amount out and back in at the beginning of the month to sweep in some pennies of interest from chequing (they annoyingly don't let you transfer <$1 so if I have 2¢ in chequing I will typically transfer $X into it from the savings account I want the pennies to go to and then immediately transfer $X.02 back a few seconds later.

There are numerous transactions later that Feb though so I will need to crack out a spreadsheet to calculate it. I will post back once I calculate.
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Previous offer expired. Called for a new offer. They wanted to know my alternatives. Ended up offering me 2.5% for 3 months.
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DRC wrote:
Aug 2nd, 2017 12:24 pm
Previous offer expired. Called for a new offer. They wanted to know my alternatives. Ended up offering me 2.5% for 3 months.
Was the offer for new money in or for money already in your account?

I'm wondering if I should move the money out before calling..
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ml88888888 wrote:
Aug 1st, 2017 1:55 pm
Did you have the actual experience(I.e. Calculate the interest paid to the exact amt) or you just interpret what Tangerine says? I calculate all interests received every month and my statement is true.
I calculated interest for 2 different months and it matches my expectations based on Tangerine's fine print that says they do not pay promo interest on any interest earned during the promo.

The easiest one to check is the 3rd month since there are 4 interest payments to subtract (normal + promo interest from month 1 and month 2) and the difference is quite noticeable.
This explains exactly to the penny any mystery I previously had with why the promo interest was "a bit" less than what I would have expected.

I also had the 1 month that had withdrawals/deposits and it also excluded the prior month's interest and promo interest. It was within a 1/2 cent for this account.

If I included the prior month's interest payments in the calculation for the promo it gave a result that rounded up to the next cent (1 cent more than actually paid).
If I excluded both it rounded to the amount actually paid. Since this month was so close, I could actually exclude just one interest payment and still get it to round to the actual amount paid, but based on the calculations on other months I'm assuming there is no difference with those and that it is both that is excluded.

Are you calculating the promo interest correctly in your calculations? It is paid a day later but it does not pay on the prior day's closing balance that includes the interest.

e.g.
Feb. 1 deposit $1000, $1000 balance
Feb 28 $0.61 interest, $1000.61 balance
Mar 1 $1.88 promo interest, $1002.49 ($1.88 is interest on $1k for 28 days, not $1k for 27 days + 1 day of $1000.61)

This example is using 0.8% base and 2.45% promo for 3.25% promo from winter 2017 promo.

In real example Jan 31 and Feb 1 have interest payments from Jan ... if I include those amounts in the 2.45% promo calculation it doesn't match the amount paid.
The Feb. example I'm using has withdrawals and deposits and the withdrawals are greater than the interest paid.

Doesn't seem that withdrawals are affecting any exclusion of the calculation wrt 'no promo interest on other interest'.

I checked 3 separate months and my spreadsheet calculates the correct actual interest and I am subtracting all prior normal and promo interest from every promo interest calculation.
e.g. Calculate daily amounts, sum entire month, then subtract (N days of month) x (promo rate) x (sum of all prior month's interest payments)
If I skip the subtraction the calculation is more than actual. If I add the subtraction factor it matches to the penny.
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pkpower wrote:
Aug 3rd, 2017 2:14 am
Was the offer for new money in or for money already in your account?

I'm wondering if I should move the money out before calling..
Money in account. Can add new money up to $500K at same rate.
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DRC wrote:
Aug 2nd, 2017 12:24 pm
Previous offer expired. Called for a new offer. They wanted to know my alternatives. Ended up offering me 2.5% for 3 months.
Is it on the entire balance or just new deposits ?

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