Special 2%** HISA Offer | Canadian Tire | Discussion forum

More details:
Annual interest rate quoted as of the date of this email and subject to change without notice. Interest is calculated daily at a daily rate which is equal to the annual interest rate divided by 365 days (or 366 as the case may be) and is based on the daily closing balance in your account and paid monthly. The 2.00% interest rate consists of the current standard rate of 1.8% and a bonus of 0.20%. The bonus .20% interest rate will commence on August 1, 2020. The standard rate is subject to change without notice. Excludes deposits made to a Canadian Tire Tax Free® High Interest Savings account. Canadian Tire High Interest Savings Account currently not available to residents of Quebec.

krwilson, it refers to email, did you get the offer via email?

Classic Canadian Tire Bank. Drop base rates dramatically by more than 50%, then offer time-limited, extremely short window GIC or HISA promotional rate offer. If this were a GIC offer for a 1-year GIC, with a 30 day rate hold, I'd say maybe. But it's a HISA offer and is typical with those, the legal language includes provisions that the offer can be changed after agreeing, at will, by the financial institution. In short, you have to trust your financial institution not to change the offer post-offer. If this were Tangerine, okay, yeah, I trust them. But it's Canadian Tire Bank, whom I don't trust.

Also, while bank risk ratings are a closely held secret, I strongly suspect that Canadian Tire Bank is, or was, one of the two banks in the CDIC's lowest category (that is, the most watched) in terms of risk. My reason for this is because of the analyst commentary regarding parent Canadian Tire Corporation's leverage ratio and debt ratings. As well, 100% of its lending portfolio is credit card receivables, half of which are funded by deposits and half of which are funded by the Glacier Credit Card Trust.

For those reasons, it's an avoid for me. Not a "strong avoid" like Motusbank, but an avoid nonetheless.

Cheers,
Doug

Disclosure: I am unitholder in CT Real Estate Investment Trust, which is majority owned by Canadian Tire Corporation, Limited, and which may be the landlord to Canadian Tire Bank in one or more of its contact centres (haven't checked the property list). I also own shares in Bank of Nova Scotia, which owns 20% of Canadian Tire Bank, but I wouldn't mind if they sold their stake in CTB back to CTC. 😛

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'Fill Yer Boots' if you want to Folks, but it's just another CT short-term Bait Rate.

I'll pass,

Dean

Good strategy to get people to apply for their credit card. If Peter included it as one of his High Interest Savings Cash Back offers, then maybe I’d consider it.

Loonie said

Doug said

Also, while bank risk ratings are a closely held secret, I strongly suspect that Canadian Tire Bank is, or was, one of the two banks in the CDIC's lowest category (that is, the most watched) in terms of risk. My reason for this is because of the analyst commentary regarding parent Canadian Tire Corporation's leverage ratio and debt ratings. As well, 100% of its lending portfolio is credit card receivables, half of which are funded by deposits and half of which are funded by the Glacier Credit Card Trust.

 

Where does one find this CDIC information, Doug?  

It's not public. Call it a "wild guess" and speculation on my part.

It's a penalty for a financial institution or a CDIC staff member to disclose their, or the financial institution's risk rating, but the full text of the Differential Premiums Bylaw is at https://laws.justice.gc.ca/eng/regulations/SOR-99-120/FullText.html.

There's four categories, and it's a closely guarded secret. CDIC only discloses the number of institutions per risk category, hence my need to speculate.

Edit: The 2019 annual report is out now. Page 34 lists the differential premiums each category pays, as a percentage of insured deposits. The 1 institution in category 4 from 2018 dropped off. So it probably wasn't who I thought it was. I'm guessing that was Street Capital Bank of Canada (now RFA Capital Bank of Canada), now that they've been recapitalized (at my and others' expense, but I digress!) and new owner RFA had to provide an additional equity capital injection. Again, speculation, but logical speculation nonetheless, I think. Three institutions are in category 3 (second from the bottom, or second highest risk) in 2019. Any speculation on who those were?

Link: https://www.cdic.ca/wp-content/uploads/cdic-2019-annual-report.pdf

Edit again: Oh, that's percent of members, not number of members, and it includes the foreign bank subsidiaries and trust companies, of course. Nevertheless, given that, 4% of what 115 members? That's a little better than 3 institutions, I think.

Cheers,
Doug

krwilson said

Note: I asked if I was getting the 2% offered, entire reason I started this, and was told that the 2% rate does not start until October 1st, 2020. So I hope I enjoy the 1.8% till then and get the better rate for a few months?! Seems odd going this far into the future as all other institutions are lowering their rates.  

I think I would be more inclined to trust the footnote at the bottom of the page:
"**Annual interest rate quoted as of the date of this email and subject to change without notice. Interest is calculated daily at a daily rate which is equal to the annual interest rate divided by 365 days (or 366 as the case may be) and is based on the daily closing balance in your account and paid monthly. The 2.00% interest rate consists of the current standard rate of 1.8% and a bonus of 0.20%. The bonus .20% interest rate will commence on August 1, 2020. The standard rate is subject to change without notice. Excludes deposits made to a Canadian Tire Tax Free® High Interest Savings account. Canadian Tire High Interest Savings Account currently not available to residents of Quebec."

@Bud yes but the card is free and if you qualify for the WE version (min $80K personal annual income) you also get free Gold Roadside Assistance (250 kms towing, etc).

P.S. one feature of the card that is little talked about is that you can set up to automatically pay for MANY recurring services and earn 1%, e.g. utilities, property taxes, insurance, etc., many that normally do not accept credit card payments or that may charge extra for it but CDN Tire sends payments as if it were from a bank account so the recipient does not see it as a credit card payment (the ONLY card to provide this service). This is a free way to earn CDN Tire points for which you would otherwise not earn anything anywhere else.