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Email this10:27 pm
November 4, 2014
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Alterna Credit Union has a 3 and 5 year market tracer GIC which is a S&P/TSX 60 index equity market GIC, http://www.alterna.ca/Personal.....eedReturn/.
Basically, 3 years you are guaranteed a minimum of 1.5% and maximum 14% and 5 years you are guaranteed a minimum of 5% and a maximum of 27%.
Their 3 and 5 year Market Tracer GIC is DICO insured and principal and the minimum guaranteed return of 1.5% or 5.00% in 3 or 5 years is part of this DICO deposit insurance.
Today, the highest 5 year GIC is 3.10% Luminus Credit Union which is DICO eligible and insured. This over 5 years compounded is a total of 16.49%.
I believe ATB Financial got rid of a similar product in 2013 or 2014, I can't remember exactly when. I think if your going to take a risk, take a risk and if you want to play it safer then play it safer.
I would not invest in any of these or similar equity, market GIC's from any financial institution.
10:42 pm
November 4, 2014
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My understanding is that even say you earn 27% in 5 years, it is all taxed in the year of maturity at your marginal tax rate which can range from 25% to 50% depending which province you reside in.
This is not applicable if you have this 27% total gain at maturity in an RRSP, RESP, RRIF, TFSA, LIRA, LRIF, LIF if these plans are available to such equity, market tracer, linked type GIC.
7:25 am
November 19, 2014
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I can't speak to this market linked GIC of theirs (I personally think they are generally a bad idea) but I had occasion last month to buy a bog standard 3 year term deposit from Alterna.
It was my first time meeting with them and I found them to be very customer oriented and remarkably easy to deal with. I wouldn't hesitate to deal with them again.
They also apparently have another division, CS Alterna Bank that has CDIC insured coverage (this serves QC customers mostly). However, I believe this allows them to game the coverage available if customers want to invest more than the 100K DICO limit with them.
11:20 am
November 4, 2014
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Koogie, we have dealt with Alterna Credit Union as well and have no problems with their customer service and when they offered some term deposit, GIC rates that are attractive like back in December-2014, they had a 3 year GIC that paid monthly interest at a 2.47% rate.
We could not find anywhere a higher rate with their monthly interest payment option. Yes, they do have 2 different financial institutions DICO and CDIC insured separately so this is a good thing for us with larger deposits with this is a concern.
Koogie, it was just this product and other similar equity, market linked products that seems not a good idea in our opinion.
Take care and shop around as it is getting harder to find good, real lasting rates.
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