Personal Finance

Tangerine RRSP Loan Offer 2.75%

  • Last Updated:
  • Jan 9th, 2019 6:46 pm
[OP]
Deal Addict
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Dec 17, 2008
2520 posts
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Winnipeg

Tangerine RRSP Loan Offer 2.75%

Got the annual Tangerine RRSP loan offer. This year is not as good as previous years but I was offered $15,000 at 2.75%......

Here is the email :

You take saving for retirement seriously. So do we. That’s why we’re making it easier to save more and earn more in your Tangerine RSP Savings Account – even if you don’t have the cash on hand at the moment.

You’ve been pre-approved for an RSP Loan of $15,000 at 2.75% APR until March 1, 2019

If you haven’t managed to max out your RSP with regular contributions, an RSP Loan can be a fantastic way to top up your RSP and make the most of the tax advantages available to you.

Get the incredibly low rate of just 2.75%* on your RSP Loan when you use it to make contributions to a Tangerine RSP Savings Account until March 1, 2019.

Here’s what you can expect:


• An incredibly low interest rate of 2.75% on the loan

• No fees or service charges

• No early repayment penalties

Activating your RSP Loan is easy. Just log in at tangerine.ca before the RSP deadline of March 1, 2019 and go to ‘Insights’.



* Special promotional RSP Loan Rate of 2.75% (2.75% APR) in effect as at January 7, 2019 and is available until March 1, 2019 when the proceeds of the Loan are deposited into a Tangerine RSP Account. If the Loan proceeds are deposited into an account held at another financial institution, an RSP Loan rate of 8.75% will apply (8.75% APR). Interest accrues from the advance date. The term of the loan is twelve (12) months, and it is repaid through automatic monthly installments. The first payment can be postponed for 3 months, but interest will continue to accrue during this period. Additional payments can be made or the entire loan can be paid off without penalty. This promotion and Loan details are subject to changes prior to accepting the Loan and are based on the date of issuance of the Loan agreement. Other conditions apply.

Tangerine is a registered trademark of The Bank of Nova Scotia, used under licence.
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12 replies
Deal Addict
Mar 8, 2013
2410 posts
1127 upvotes
Note that the first paragraph refers specifically to "earn more in your Tangerine RSP Savings Account" but the * does not restrict to "Savings". The offer has nothing to do with a Savings Account, so why mention it?
Member
Jan 4, 2017
336 posts
179 upvotes
akaManny wrote:
Jan 7th, 2019 8:47 pm
Note that the first paragraph refers specifically to "earn more in your Tangerine RSP Savings Account" but the * does not restrict to "Savings". The offer has nothing to do with a Savings Account, so why mention it?
I received the same offer, when I click through it automatically wants to add RSP Savings, if I remove it, doesn't let me continue. So maybe you can sign up, initially have it deposited into RSP Savings, and then later transfer it to another account, not sure. Initially it seems like they are tying it into the RSP Savings account though. I don't remember it being like this a couple years ago when I got their 1.5% offer.

When trying to manually add a different RSP account (like RSP GIC or RSP Investment Fund account), and then adding the RSP loan, it says:

"The RSP Savings Account is appearing here because, in order to apply for an RSP Loan online, you need to have your loan funds go to a Tangerine RSP Savings Account."

Edit: nvm, it was the same way last time. They just force you to open an RSP Savings account to receive the RSP loan deposit and then use that RSP Savings account to fund the Investment RSP or GIC RSP afterwards.
Sr. Member
Jul 28, 2012
967 posts
368 upvotes
Montreal
The small print says that you should in theory be able to use the RSP loan to contribute to an RSP at another financial institution... although at a much higher interest rate (8.75%).

Not technically tied selling, but definitely not an interesting offer unless you have both the loan and the RSP at Tangerine.
Deal Addict
Nov 25, 2014
1739 posts
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Newton Brook, ON
titaniumtux wrote:
Jan 8th, 2019 1:34 am
Cold deal compared to credit card balance transfer offers Thinking Face
Yes, but only up to the cards' credit limits - if you can benefit from multiple offers and are preapproved, why not?

airodyssey wrote:
Jan 8th, 2019 7:55 am
The small print says that you should in theory be able to use the RSP loan to contribute to an RSP at another financial institution... although at a much higher interest rate (8.75%).

Not technically tied selling, but definitely not an interesting offer unless you have both the loan and the RSP at Tangerine.
I just consider the lower return of their RSP, plus potential transfer-out fee, as part of the cost of the loan. It's not a hot deal for me this year, but last year they had a lower interest rate and a 1% rebate on contributions to their mutual fund at the same time.
You need someone with an umbrella not a fork
Banned
Nov 23, 2018
592 posts
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If my RRSP wasn't full, I would have done it in a heart beat.

The fee to transfer your RRSP out is only $45. That is nothing in comparison to the amounts they let me borrow at a cheap rate for a year.
Newbie
Jun 25, 2016
84 posts
37 upvotes
Where can I go to find more info on the usefulness of this? I'm a full time student so only made 10k this year and didn't put anything in savings.
Deal Addict
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Sep 4, 2005
2838 posts
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Toronto
What's the benefit in this deal? I got this offer but cannot understand why you would borrow to put money into your RRSP/RSP and then pay back the loan. Is it just because it's a low interest loan?
Deal Addict
Mar 8, 2013
2410 posts
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Elexen wrote:
Jan 9th, 2019 8:48 am
Where can I go to find more info on the usefulness of this? I'm a full time student so only made 10k this year and didn't put anything in savings.
Save your contribution room until you have enough taxable income to make the tax deferral worthwhile. You don't need an RRSP, let alone a loan, based on the details you posted.
Deal Addict
Mar 8, 2013
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Super_Chicken wrote:
Jan 9th, 2019 2:37 pm
What's the benefit in this deal? I got this offer but cannot understand why you would borrow to put money into your RRSP/RSP and then pay back the loan. Is it just because it's a low interest loan?
There is definitely a benefit for Tangerine, since they would get a deposit that they would otherwise not get. In the past, when the annual RRSP contribution was "use it or lose it", there might have been a more obvious benefit for the borrower. This is a good deal only if an RRSP deduction for 2018 makes sense for you, but that's a more complex question. Note that the interest you pay is not tax deductible.
Sr. Member
Sep 12, 2012
700 posts
469 upvotes
Toronto
Tangerine's 1 year RSP GIC is currently at 3%. Can't you take out this loan at 2.75% and put it into the 3% GIC and make an additional 0.25% from borrowing their money? Plus you get the tax credit for contributing to your RRSP. Is there a downside to this strategy?

https://www.tangerine.ca/en/products/sa ... nvestment/
Deal Addict
Mar 8, 2013
2410 posts
1127 upvotes
hamandcheese wrote:
Jan 9th, 2019 3:40 pm
Tangerine's 1 year RSP GIC is currently at 3%. Can't you take out this loan at 2.75% and put it into the 3% GIC and make an additional 0.25% from borrowing their money? Plus you get the tax credit for contributing to your RRSP. Is there a downside to this strategy?

https://www.tangerine.ca/en/products/sa ... nvestment/
No / Yes. "No" because although you make 3% in your RRSP in one year, when you withdraw it you will pay tax on the interest. So it is 3% minus tax versus 2.75% (which is not tax deductible). Instead of a "tax credit", you are actually getting a "tax deduction", the value of which depends on your marginal rate. "Yes", the downside is that you might get 30% (for example) back on your contribution and then when you withdraw in the future you might be paying 40% tax. What matters is the difference in marginal rates when you contribute and when you withdraw.

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