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Email this10:46 am
December 29, 2009
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I guess accelerate financial is not the leader any more by dropping rates to 2%
1:35 pm
January 30, 2009
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Thanks for the quick information doc. That's one of the reasons I love this forum! I guess it's time again for me to look at the other banking options out there. Too bad AcceleRate has chosen to join the race to the bottom with interest rates.
2:58 pm
your right james accelarate has chosen to join the race to the bottom. can any bank credit union or trust company out in canada beat 2%. There must be somebody out there?
9:04 am
jack said
YOU'RE right james accelarate has chosen to join the race to the bottom. can any bank credit union or trust company out in canada beat 2%. There must be somebody out there?
What race to the bottom? Rates have been pretty much glued for the past year. 2009 was the real race to the bottom.
9:27 am
January 30, 2009
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Believe it or not Simon, rates of several financial institutions have continued to fall (even below 2%) over the past several months! Check our comparison chart. That doesn't include GICs and term deposits which have also fallen substantially in the past few months.
It's obvious this has nothing to do with 'market fluctuations' as the banks claim, but is solely due to greedy banks trying to milk their customers of their hard earned dollars in times of economic downfall.
4:24 pm
James said
Believe it or not Simon, rates of several financial institutions have continued to fall (even below 2%) over the past several months! Check our comparison chart. That doesn't include GICs and term deposits which have also fallen substantially in the past few months.
Over the past year, the rates of the big 5 didn't change at all and the others decreased by 0.2%, at most. I hardly call that a "race to the bottom". The only exception is Hubert, but they smelled like a joke from the beginning. We were actually closer to the bottom in late 2009.
5:23 am
I knew it was coming because they had the higher rate.
Me too I'm not happy with the new rate but from what i see in the list, they still have the higher rate on their regular account.
For sure I stay with Accelerate and the best rate on regular account on the market.
Bil
9:29 am
October 5, 2009
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James said
It's obvious this has nothing to do with 'market fluctuations' as the banks claim, but is solely due to greedy banks trying to milk their customers of their hard earned dollars in times of economic downfall.
If banks are trying to milk their customers, then where is all that milk going!?!?!? And where can I get some of it??
Simple. Instead of loaning your $$$ to the bank at a dismal rate, buy bank stocks so you can get some of that milk too!! I hold stock in five different banks, which currently pay annual dividends of 4.89%, 4.91%, 3.77%, 4.22%, 4.22%, not to mention continuous capital appreciation of the value of those stocks. 
It's just a matter of pumping the right end of the cow! 
9:03 pm
January 30, 2009
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Hi Stan,
Your point is well taken. The way I look at it is this: let's take your highest rate of return (4.91%) and round it up to 5%. That's 2% higher than the current highest rate for tax-free savings accounts. So, you are making an extra 2% (on $10,000 that's $200 per year - without subtracting your dividend tax rate). Now, there is a very low (but non-zero) risk that a bank will fail. In that case you will lose over $10,000 (but again, that is an extremely low risk). What is a higher risk, is that your bank stock will depreciate in value (statistically, this risk will depend on how long you intend to invest).
I ask myself the question: do I want to risk all or part of my $10,000, in order to make an extra $200 per year. I do not wish to take this risk - nor do I believe hard working people should have to do this in order to be fairly compensated for lending out our hard earned dollars.
Just my two cents.
8:30 am
I'm as skeptical as they come, but I don't blame the falling rates on greed. The banks really have no use for our money! During the slide in 08-09, a lot of them needed capital, like ING and Ally, to build operations or reduce leverage. Now they have lots of cheap government short-term capital and their 1-5-year obligations at higher rates are almost all matured, so they don't have to cover that outflow.
They still have lots of 30-year bonds paying something like 6%. They are making zillions on consumer debt and billions on mortgages. They want TFSA and RRSP deposits because, in the long run, most of those customers won't bother moving their cash due to penalties. Short-term money that can fly in a flash if the rates rise? Why would they want it?
RetirEd
10:24 pm
You are looking at the glass being half empty, something that 2008/09 did to alot of people, you seem to think automatically that you have the potential of losing your capital rather than looking at it that each of the banks paying approx 4% yield AS WELL as potential capital appreciation could make your investment some 10-15% per year over say a 20 year span, not too mention compound interest...something that DOES handily beat your $200 upside expectation per year. You automatically assume that an investment in Canada's largest company, i.e Royal Bank will return zero in stock price appreciation or worse the potential of losing it all?? 2008 was bad but likely the worst thing we will ever see in our lifetime, there are many articles out there what return you would have received going back 10+ years investment in any of the big banks...it wasn't small potatoes. Diversification and underexposure to any particular name over the long term and smart blue chip dividend investing will always come out on top over time.
James said
Hi Stan,
Your point is well taken. The way I look at it is this: let's take your highest rate of return (4.91%) and round it up to 5%. That's 2% higher than the current highest rate for tax-free savings accounts. So, you are making an extra 2% (on $10,000 that's $200 per year - without subtracting your dividend tax rate). Now, there is a very low (but non-zero) risk that a bank will fail. In that case you will lose over $10,000 (but again, that is an extremely low risk). What is a higher risk, is that your bank stock will depreciate in value (statistically, this risk will depend on how long you intend to invest).
I ask myself the question: do I want to risk all or part of my $10,000, in order to make an extra $200 per year. I do not wish to take this risk - nor do I believe hard working people should have to do this in order to be fairly compensated for lending out our hard earned dollars.
Just my two cents.
10:05 pm
October 5, 2009
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gwplant said
. . . . each of the banks paying approx 4% yield AS WELL as potential capital appreciation could make your investment some 10-15% per year over say a 20 year span, not too mention compound interest...something that DOES handily beat your $200 upside expectation per year. You automatically assume that an investment in Canada's largest company, i.e Royal Bank will return zero in stock price appreciation or worse the potential of losing it all?? 2008 was bad but likely the worst thing we will ever see in our lifetime, there are many articles out there what return you would have received going back 10+ years investment in any of the big banks...it wasn't small potatoes.
Using the Royal Bank example:
1999: 600 shares purchased at $18.19 = $10,914
2000: 1200 shares due to 2-for-1 stock split
2006: 2400 shares due to 2-for-1 stock split
2012: 2400 shares at $58.19 = $139,656
Add to that, the annual dividend yield which is currently 4.14% !!
Thank you!! Thank you!! Thank you!! . . . greedy bank!!
1:26 pm
January 30, 2009
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Great, you made a lot of money. And, if you invested in 2007, you would have lost half your money. Your scenario is like saying 'Aunt rose played roulette last year and won $2,000 and she hardly ever loses, so I'm going to put all my savings into the next roulette spin'.
Also, it's very nice that you had almost $11,000 disposable income to gamble with but some of us aren't that fortunate. We can't park money in the stock market and hope it works out. My point, was that hard working people should not have to gamble on returns. We should be compensated fairly for allowing the banks to use our money. What is fair? Look at previous savings rates. I'm not suggesting I should be making 10% on a savings account, I'm saying that I should be making more than 1 or 2 percent - a number that the banks say is based on 'the market'. Well, if you're doing so well in 'the market', why aren't the banks raising their interest rates for savers? I'll tell you why...greed.
7:21 am
October 5, 2009
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James said
Also, it's very nice that you had almost $11,000 disposable income to gamble with but some of us aren't that fortunate. We can't park money in the stock market and hope it works out. My point, was that hard working people should not have to gamble on returns.
I've been retired for a number of years, so having a few $$$ to invest, really isn't a big deal. Right now, I have a large amount invested in GICs at 5.25%; but that all ends in a couple months, so I have to look elsewhere to get the most return on my retirement funds. 2% from a savings account just doesn't cut it.
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