EQ New GIC Offering | EQ Bank | Discussion forum

They also offer 1.70% for 7 year GIC: are they pessimists, or just know something?

3oakwest said

EQ is offering 1.70% for 3 month GIC  

That ⬆ 3 month GIC @ EQ has been available for a while now.

I decided to pass on it, and went with Tangerine's offer of almost 5 months @ 2.0% (on new money) HISA instead.

'Carpe Diem'

Dean

rhvic said
The 3 month GIC is now listed at 1.50%.

This happens to be the same as their current HISA rate - does this mean their HISA rate will soon go down?  

I think that has been the pattern at least a few times. Based on a few articles I read recently, most deposit institutions have more deposits than they can reasonably loan out (consumers sitting on cash due to pandemic), and so have had margin compression. The way to correct that is to decrease the deposit interest rate to reduce costs AND to slow inflows of new deposits.

AltaRed said

I think that has been the pattern at least a few times. Based on a few articles I read recently, most deposit institutions have more deposits than they can reasonably loan out (consumers sitting on cash due to pandemic), and so have had margin compression. The way to correct that is to decrease the deposit interest rate to reduce costs AND to slow inflows of new deposits.  

I attended a Zoom AGM of one of my CUs recently. They said their problems now are a shortage of loan applications, rate compression, and people not spending money. Thankfully, defaults were not on the list. People not spending money due to covid - staying at home don't need to spend as much money and can postpone buying that new car, work clothes etc. Interestingly, though, despite low rates, they are leaving their money in the CU. Evidently, for this group at least, there is not a lot of confidence in other kinds of investments.

I think it's interesting that while, in general, people are encouraged to get out of debt, especially consumer debt, and put themselves on a stronger financial footing with some savings under their belts, it is also true that when they do so the financial industry suffers. So the message is definitely mixed. There are two partners in the indebtedness problem, each dependent on the other, both trying to hang on.

...unless there is inflation, which I presume would create pressure to hold or raise rates.

Inflation encourages people to buy now rather than later or never. If they don't have the cash, they borrow or put it on credit card.
And there will be pent-up demand once the virus is under control, with spending sprees, especially travel, so price of travel will go up. The travel industry has to make up its losses asap, and they will get full occupancy.

We'll see.

EQ quietly dropped the 3 month GIC (non-registered feature rate) to 1.30% (from 1.50%)

Are you sure? I still see the 1½% 3-month GIC available just now at GICs.

Didn't someone report recently that EQ doesn't do Joint GICs?
If that's the case, they're no use to me at least.
I can still use them for joint savings account though.