Falling behind the competition? | Page 6 | EQ Bank | Discussion forum

Only EQ knows why it prefers one channel or another. One advantage is there certainly is less administrative work involved (no need for CSRs, folks answering phones, etc.).

Perhaps the larger institutions like the broker channel better given most of the broker ISAs (all big 6 banks anyway and maybe even the lifecos) are now paying 2.25% or thereabouts.

I hear what you're saying, Norman, but, still, it seems thin if that's all there is to it.

There is competition in alternative banks/CUs well above 1.65% just as there is competition in an investment account. I assume people who go to the bother to seek out EQ Bank can equally be lured elsewhere (rate being almost twice as high at Motive or Oaken, for example) although the competition would be more temptingly easy to migrate to at a brokerage.
I think I'd be very cheesed off with EQ if I found out they were offering more through another channel, or, worse, that I could do much better at Motive. I have money in none of these at the moment; I chose DUCA, currently at 3.25%.

If they don't need more cash at EQ in the range of 1.65%, then, to me at least, it doesn't make sense that they offer 2.25% at brokerages. I don't see that they need to be involved with the brokerages at all on that basis. Brokerage customers can get the same rate with a bank with a higher credit rating.
Mind you, both rates are uninspiring. Maybe they don't want new deposits through either route.

Moving back up, a bit ...

1-Yr 2-Yr 3-Yr 4-Yr 5-Yr

Aug 30: 4.40 4.40 4.45 4.50 4.65

Aug 31: 4.50 4.65 4.70 4.70 4.70

The Fed's Loretta Mester stated on Aug 31 that rates will need to rise "somewhat above 4%" by early 2023 and stay there all year. Canada will follow. That means HISA rates will be 4% or higher very soon. I say that because the BOC rate is now 2.5% and some FI's are offering 3% HISA's.

EQ is far behind the curve at 1.65%. I surmise they don't need the funds. I've moved out my entire 6 figure deposit to an FI paying 3%. I like the liquidity of a HISA and am not interesting in locking in funds as I believe cash is king in times like these.

The only drawback is the hassle of moving funds around but I understand that Canada is working on a real time payment system called RTR that will allow transfers of funds immediately and available 24/7/365. Coming in 2023.

lifeonanisland said

evercareful said
EQ is far behind the curve at 1.65%. I surmise they don't need the funds. I've moved out my entire 6 figure deposit to an FI paying 3%. I like the liquidity of a HISA and am not interesting in locking in funds as I believe cash is king in times like these.  

I appreciate the explanations about the logic behind EQ's rate choices. They use calculated moves that reflect their needs at a point in time. But there is an intangible here...and that's the reputational loss that they are experiencing as result of this ridiculous HISA rate, and also lowering GIC rates in comparison to other leading lenders. Just as evercareful has done, I and two family members have moved almost about 700K out of EQ over the past month or two. And frankly, they have lost much of the respect we've had for them. Certainly, we can't be the only ones who have lost faith in EQ as a result of 1.65 percent.  

Yup, same here; I agree with all that you said. I just last night finished clearing out every last cent from my EQ savings accounts and moved it all over to Motive. I do still have GIC's with EQ, but I just might be giving up on EQ altogether by next summer, unless they give me a reason not to. So sad that my favourite FI went from right near the top of the heap to near the bottom in very short order.

cgouimet said
Moving back up, a bit ...

1-Yr 2-Yr 3-Yr 4-Yr 5-Yr

Aug 30: 4.40 4.40 4.45 4.50 4.65

Aug 31: 4.50 4.65 4.70 4.70 4.70  

They have pulled back their 6 to 10 year rates all to 4.7%.
I'm not sure when this happened, but they were at 5+ not so long ago.

Why does EQ keep advertising their low rate HISA of 1.65% on social media when their compétition is offering a sizable interest rate that EQ cannot or will not match? Why continue to waste advertising dollars? Increasing a low interest rate to competitive market rates will be more beneficial for EQ and they will retain their valuble customer base instead of seeing it disappear.

It is also an error to think that advertising is competing.

Grocery stores advertise their sale prices, regardless of the fact that their prices may not be the lowest.

Hellohello said
Someone was harping on Gic rates not going up because of lower loan growth. The evidence suggests otherwise.

"The numbers reflect trends seen across Canadian bank earnings for the quarter: continued loan growth as the overall economy, including the unemployment rate and GDP growth, remained strong." Ctv 08/30/22  

1) That is 'ancient' history from the last quarter. Things have changed with BoC increases. The banks wouldn't also be increasing credit loss provisions if they thought they didn't have increased credit risk from loan defaults.

2) Loan growth in a broad sense is different from loan demand at a particular interest rate, or rate of loan growth. There can be a lot of loan demand growth at 5-6%, but negligible growth at 7-8%. Sticker shock and/or inability to qualify for a mortgage at 6%, but qualifying at 5%, makes a difference.

You are reading what you want into a sound bite without the proper context.