CIBC GIC Changes | CIBC | Discussion forum

What is the reason behind the change?

The changes made by CIBC may be the beginning of all the banks changing their terms and conditions. I purchased a 5 year TFSA GIC from Motusbank in late January. When I printed off the certificate I read on the back that:
“motusbank can add to or change the terms and conditions of this Agreement from time to time, but motusbank will give at least 30 days’ notice of any such additional or amended terms and conditions and impacts on interest payable (my italics). We may change these Account Terms at any time, and any changes communicated to you at least 30 days before they take effect. Notice of changes to the Account Terms may be distributed through our statements, letters and/or posted on the motusbank website. If you access or have funds on deposit in any Account at motusbank after the effective date of the change, you automatically accept the change.”

If I’m interpreting the above correctly then a “5 year Guarantee” means nothing. Hopefully I’m mistaken.

I’ve repeatedly asked for their legal department to contact me, to no avail. I was informed, however, that I could write to the Ombudsman.

I checked my Meridian GIC certificate of 3 years and it didn’t have the “Get out of jail free” spiel. Maybe the more recent ones will.

I find this all very stressful. Any opinions, anyone?

bhuc said
My Fin Rep at CIBC emailed this to me.

"I have reviewed the changes to the GIC agreement and was given some clarity from backoffice regarding what can be done. If you do not accept the changes from April 16th to May 16th you are able to cash out your GICs and get the principal and interest prorated. If this is the case, you will have to cash the certificate and take the funds elsewhere."

The kicker is, the Agreement and terms and conditions are not available for viewing until April 16, 2023.

I still don't know if I accept the proposed "GIC Agreement changes", can CIBC can change my existing GIC term or Interest Rate at their discretion ?  

GIC is a term deposit, and both parties agreed to the fixed rate. If the agreement change will now give CIBC the right to change the rate of an existing GIC, rest assure no one will ever buy a CIBC GIC ever again.

bhuc said

I still don't know if I accept the proposed "GIC Agreement changes", can CIBC can change my existing GIC term or Interest Rate at their discretion ?  

You should ask CIBC precisely this question and get it in writing if they say they cannot change the Interest rate and term.

Instead of assuming GIC contracts have fundamentally changed I'm guessing (GUESSING!) this is what it is: Governments require continual increased hand-holding by FIs to make sure people are a million % informed of every possible pitfall of the investment they're buying, the account they're opening, etc. Because grown-ups are no longer responsible for their actions, it's always someone else's doing, so FIs are probably now required that if they make even the tiniest administrative change to their GIC contracts during the time you hold a GIC that you have to be offered the option to terminate your existing contract and get your money to that point. (Thus the motusbank "impacts on interest payable", perhaps refers to fact you'll get interest to the day they make the admin change to t&c that prompts you to cancel your GIC.)

That's my guess. I might be wrong as it seems like a windfall opportunity to get out of a low rate GIC part-way through if you can find a change to their t&c to trigger redemption, though it's also in the spirit of financial institution bashing that is always a sure-winner at street level so I might be right. But I'm pretty sure there's no change to the term's interest rate guarantee and security of principal that are the foundational basis and allure of GIC contracts, that strikes me as alarmist at this point. But as I said that's all just my personal guess at this point, by all means pursue whatever action you need for your own assurance, I'm sure you'll let us know.

Last week I was added to someone's joint account at Tangerine and the stuff they had to tell me on the phone about who this type of account is suitable for, who it isn't, etc, etc, etc went on forever. I got the impression the "consumer protection" disclosure requirements are way more than they used to be. I'm one that doesn't really enjoy society's constant assumption that I'm stupid (I like to think only people that know me have that right!) but maybe I'm in the minority these days.

There can be multiple agreements for a GIC. The RBC Royal Bank Prime-Linked GIC has four agreements:

1. Electronic Availability of the Terms and Conditions
2. Client Agreement - Guaranteed Investment Certificate
3. Special Conditions - Prime-Linked Cashable GIC
4. Consent to Electronic Delivery of Statements and Notifications

The Client Agreement (agreement #2) is the one that the bank may make changes to anytime. That agreement doesn't have the interest rate.

The GIC interest rate is in the "Special Conditions" agreement, which does not allow the bank to make changes anytime.

RetirEd, I understand, guess we just disagree on this.

savemoresaveoften said

I am a believer of ‘fool me once, shame on you, fool me twice, shame on me’. That applies to the use of financial advisor as well. If one falls for ‘high pressure sales tactic’, one needs to grow up and learn to stand one’s ground.  

Have you tried that advice out on someone with dementia, imperfect vision or hearing, or just not as smart, educated and worldly-wise as you? There are lots of us out there.