GIC rates decrease | EQ Bank | Discussion forum

Down two days in a row!

https://www.highinterestsavings.ca/profile/eq-bank/gic-rate-history/

Vatox said
Reduced today again. This is insane, the BoC hasn’t even reduced rates yet!

https://www.highinterestsavings.ca/profile/eq-bank/gic-rate-history/  

Unfortunately what happens sometimes is that some FIs build one or two rate increases into their GICs and deposit rates in advance of the actual event. They hope they can predict the trends effectively. Remember that just a few short months ago we were all excited about the possibility of couple of more rate hikes for this year. When it becomes more obvious that the rate increases will fail to materialize, those increases are clawed back. This is what we are experiencing now.

The bond markets and Government of Canada rates have fallen a full percentage point. This, usually, has more to do with BoC cuts.

Some institutions that need the capital more than others will have market-leading rates, but all of them, generally, should lower them.

In short, I would expect most FIs to lower their GIC rates by up to a full percentage point within the next 3-4 months or so (HISAs less so since they're already lower and haven't risen as quickly).

By the end of the year, if not sooner, the top 5-year GIC rate should be between 3.10-3.20%. Top HISA rate likely to be 2.25-2.50%.

Outlier prediction (though not impossible): Over-capitalized TDCT decides to make its "Premium Rate Savings" or its "Regular Savings" interest rate negative, to try and exact a bit of profit on parked savings. That is, they might charge you 0.01-0.05% to park your money with them, in an effort to move you into locked in instruments like GICs, mutual funds, discount brokerage accounts, and the like.

The bear market for bonds, although it could be argued there never really was one, now appears to be over. The period of continuous rate hikes is now over, for about 5 years, and we'll be in a sustained, long-term period of flat to declining GIC rates.

Cheers,
Doug

I got my March interest payment today. I transferred out the total account balance, and now have zero at EQ. Three years waiting for joint accounts plus poor rates equals "I'm gone". Will leave the account open just in case.