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Email this9:41 am
March 25, 2009
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Bank of Canada raises prime rates +.25% - Sept 8, 2010
Well, let's all hope that savings, bond and GIC rates go up as well.
Have a great day
5:47 pm
December 12, 2009
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My guess is the banks are waiting for a few Bank of Canada increases before they start matching each interest rate increase, to increase their "spread" and subsequently their net-interest income. It's a layman's interpretation but it makes sense.
Cheers,
Doug
10:30 pm
June 30, 2009
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For the past year or so ING Direct has been raising rates. A little bit here, a little bit there. There seemed to be hope for those who save.
On Sept 1 ING REDUCED their GIC rates across the board. 0.25% for 1,1 1/2, 3,4,5 year GIC and 0.50% on their 2 year GIC.
Talk about increasing their "spread"
12:47 am
March 25, 2009
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Doug said:
My guess is the banks are waiting for a few Bank of Canada increases before they start matching each interest rate increase, to increase their "spread" and subsequently their net-interest income. It's a layman's interpretation but it makes sense.
Cheers,
Doug
I've read some reports that indicate a pause in interest rate hikes till 2011... but like any economist predictions, they are just guesses. Hopefully the BoC keeps raising rates (the US really needs to get off the ZIRP too).
Thus, hopefully the banks don't wait till 2011 to raise savings rates. 😮
Have a great day
12:48 am
March 25, 2009
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For the past year or so ING Direct has been raising rates. A little bit here, a little bit there. There seemed to be hope for those who save. On Sept 1 ING REDUCED their GIC rates across the board. 0.25% for 1,1 1/2, 3,4,5 year GIC and 0.50% on their 2 year GIC. Talk about increasing their "spread"
Savers will be the "saviors" of the economy as debt is not wealth. Gov'ts and banks are starting to realise this, abit slowly...
Have a great day
6:35 am
I still have a few bucks in a "high interest" emergency cash account (Ally), but other than that I've pretty much abandoned high-interest savings acocunts. When I first came here to Peter's blog a couple of years ago, savings account rates were in the 4% to 5% range, with a 5-year GIC from Achieva to be had at 5.5%. Now, Ally is the "leader of the pack" at 2% (unless you want the extra 0.1% by going with People's Trust). I've now transferred the money I previously had in savings accounts to high-cap dividend-paying stocks, along with a couple of bond funds. The best play I made was to buy into BCE at a 7% dividend yield, which is pretty damn good on its own, but the value of BCE is rising a lot faster than expected, so I'm getting unexpected capital gains as well. Any stock is a risky buy, even one like BCE, but with a meagre 2% payout on cash accounts, I'll take the risk. I think it's going to be a while before we see savings interest rates back up to 4% again.
7:04 am
December 12, 2009
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You're quite right, mike. Not only are the banks, in particular some of the more established online banks since the Big Five Banks have always been notoriously low for GIC rates, benefiting from increased margins when prime goes up and they raise their prime lending rate (and also their mortgage rates), they're actually lowering their GIC rates, giving them a sort of "double whammy" of increased margins. The public just eats it right up and takes it.
I have a lot of money with Ally right now, but I keep it liquid because I'm waiting for some pullback in the stock market in order to snap up solid, dividend-paying stocks (boring, but profitable and yielding, things like banks, telecoms, railways, perhaps a media company like Astral Media and utilities). The best stock timing I had was buying some TD at $36 per share in March 2009. Unfortunately, my only regret was not having enough liquid capital to buy more at the time. 🙁
Cheers,
Doug
2:32 am
June 30, 2009
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Interesting observation on GIC rates. Could not have said it better myself mike....o wait... I did
You can quote me anytime
3:25 am
March 25, 2009
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Doug said:
You're quite right, mike. Not only are the banks, in particular some of the more established online banks since the Big Five Banks have always been notoriously low for GIC rates, benefiting from increased margins when prime goes up and they raise their prime lending rate (and also their mortgage rates), they're actually lowering their GIC rates, giving them a sort of "double whammy" of increased margins. The public just eats it right up and takes it.
I have a lot of money with Ally right now, but I keep it liquid because I'm waiting for some pullback in the stock market in order to snap up solid, dividend-paying stocks (boring, but profitable and yielding, things like banks, telecoms, railways, perhaps a media company like Astral Media and utilities). The best stock timing I had was buying some TD at $36 per share in March 2009. Unfortunately, my only regret was not having enough liquid capital to buy more at the time. 🙁
Cheers,
Doug
Doug,
Very few people (outside of your family and/or friends) would say this but, WELL DONE buying that TD stock at $36. March 09 you really had to have a lot of balls to buy into the market which to be fair looked like it was going to go down even further. Mar09 was the bottom. I sure didn't have the risk tolarence to buy into that market as it would have been easy to lose another 25% or more on your captial.
Now the question is, are you going to sell the stock now and take the profits OR possibily ride it down?
Have a great day
3:26 am
March 25, 2009
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You got it.
You can quote me anytime - Nightowl
Have a great day
8:15 am
Ally is looking as though they just dropped their High Interest Savings Account to 1.75%...although the posted rate and the bar chart at the following:
http://www.ally.ca/en/savings/.....rview.html
aren't in agreement (1.75% vs 2.00%)
9:43 am
Dear ld :
I find on this particular site which is indeed informative regarding keeping abreast of the highest rates offered on the high interest savings accounts as well as the tax free savings accounts here in Canada, that people like yourself start flapping your gums regarding incorrect information. All one has to do really is look and read before making any false statements. Ally in fact has not dropped their rates. They are still at 2% . Please read more carefully before making these claims ... please !
Thank you !
10:01 am
May 15, 2007
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Wrong info or not, please be kind to all forum participants. We should definitely correct each other, but nicely.
11:57 pm
ld is actually right, there is an error in the illustration on the HISA overview page. In the bar graph it shows Ally at 2.0%, online banks at 1.5% and the Big 5 at 1.1%...but right next to it in large numbers it says the Ally HISA current rate is at 1.75%.
I can see how this might be confusing, especially since they did lower the 12 month GIC rates to 1.75, so one would think that they did the same with the HISA. I just had an online chat with one of the CSAs and he assured me that the HISA rate is in fact still 2.0%. I pointed out the error on the page but he said he was unable to see it, though he said he will make a note of it for the site admins to look at.
Edit: Nightowl, about a month ago I actually made that same observation about GIC rates going down on the PC Financial thread here. It's not just ING that has increased the savings account rates and lowered the GIC rates...it's across the board: PCF, Canadian Direct Financial, Canadian Tire and Ally have all done the same. Ally's 5 year GIC started off this year at 3.75%, rose to 4% for a couple months (highest I've seen out of all the banks), then recently dropped back to 3.75 and within a few weeks slid to 3.6 then 3.4 and now 3.3%. *le sigh*
2:37 am
March 25, 2009
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One of the reasons I see for the GIC/Bond rates going down is the very high GIC/Bond market demand right now for safe investments. More money is being pulled out of mutual funds and stocks due to risk of another drop and being plowed into the bond market, making bonds more valuable (thus lower yield). Unless this trend changes it's supply and demand. I bank at ATB and get 1.2% on savings or can lock in at 1.25% 1 year GIC... there is no point. Like Ally 2% vs 1.75%.
There is a growing awareness we are in a 60 year low for GIC rates and there is a big bubble forming due to this (and the above). The issue will solve itself once interest rates keep going up and people need to sell those bonds/GICs. (Many will sell the 5, 10 and 30 year ones). Why hold a 10 year bond at 3% when you could get a 1 year one for that? (Or a 10 year at 5% etc)
Edit: Nightowl, about a month ago I actually made that same observation about GIC rates going down on the PC Financial thread here. It's not just ING that has increased the savings account rates and lowered the GIC rates...it's across the board: PCF, Canadian Direct Financial, Canadian Tire and Ally have all done the same. Ally's 5 year GIC started off this year at 3.75%, rose to 4% for a couple months (highest I've seen out of all the banks), then recently dropped back to 3.75 and within a few weeks slid to 3.6 then 3.4 and now 3.3%. *le sigh*
Have a great day
6:17 am
March 25, 2009
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and funny enough this is what came today in my daily market report:
"Higher investor risk tolerance is evident with the sell-off in bonds which saw the yield on US 10-year Treasury bonds spike to 2.76%, the high from last Friday's non-farm payroll fuelled stock surge. The near-term technical significance of this level is high; if bonds continue to sell-off today it sets up the possibility of the yield on the 10-year T-bond testing 2.95% resistance. Uncertainty remains high and anything is possible in markets when jittery investors will change sentiment on a dime to not be the last one to be in or out of the next trade."
So GICs, Bonds and Mortgages in Canada (yes, US Treasuries DO affect fixed mortgages in Canada directly amazingly enough) should be raising soon again.
Question is... what's the next trade all the bond people go to?
Have a great day
8:23 am
Donny :
No where on the Ally website does it state that the HISA is at 1.75%
Further more, I stand by my comments to ld who was in fact wrong.
This makes you wrong as well.
Before posting any information please read more carefully and ensure that the information is in fact correct.
Cheers,
10:19 am
March 25, 2009
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Hey IHGAPTPI, lay off Id and Donny. Being hostile benefits no one and makes you look bad to others on here. Id posted what he thought to be, at the time of his writing it, accurate information. There is no point in posting 2 rude comments.
If you have something to say, REGISTER rather than hide behind "Guest" and become a respected member.
Have a great day
10:49 am
Dear Mike :
The comments made were not meant to be rude at all. Perhaps, not as refined as you might like however I was not, as you assume, picking on ld or Donny. In fact, I was asking that ld and now Donny make sure their information is correct before posting.
Now Mike, you are wrong as well because the rate for the Ally HISA was never listed at 1.75% ever. I checked that out myself right after ld posted and before Donny called Ally.
Further to your obvious concern Mike, I am in fact a "registered member" already and have not or will not hide anything when I have something to say from the likes of you.
If this sounds rude to you ... get over it !
The bottom line in the grand scheme of things is that we all visit this site to get what one would hope to be accurate information.
Cheers,
3:00 pm
Dear IHGAPTPI,
Here's a screencapture of my browser window (other than cropping out the window header at the top and my windows toolbar at the bottom...and the editorial highlighting of the aforementioned discrepancy):
Ally website HISA overview page screencap
Now, unless both ld and I are having browser cookie/refresh/flash player issues, it seems pretty clear that the Ally website itself is purveying inaccurate information and we are just reiterating what we observed...as opposed to either of us making up inaccurate information ourselves. I could understand one person making a mistake, but two different people corroborating the same thing would cause most other members to think that there is some merit to that observation. As such, I did not actually state that Ally dropped the rate or any other inaccurate information...my chat with the CSR confirmed the correct rate...as you said "Before posting any information please read more carefully and ensure that the information is in fact correct." Perhaps it is possible that the CSR's browser, like yours, did not show this difference/error so neither of you saw what ld and I saw. (Can anyone else see it when you go directly to the Ally page, or does it show up as 2.0% for you?) Furthermore, I suggest that *you* make sure you have all the accurate information before accusing anyone of doing otherwise. As for it sounding rude, it seems that Peter, mike and I are all in agreement that it is.
Good day.
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