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Email this7:22 am
April 18, 2022
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I don't know how anyone could lock in more than 3yrs without an escape hatch for the 5yr. Corruption and waste is off the charts. Without warning their could be another man-made collapse. How do they keep interest rates under 10% without stimulating inflation.
5:56 am
November 18, 2017
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AllanB: If there's an economic collapse, those 5-year holders will be sitting pretty. It's out-of-control inflation that threatens them.
RetirEd
RetirEd
7:26 am
September 7, 2018
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AllanB said
I don't know how anyone could lock in more than 3yrs without an escape hatch for the 5yr.
With the following current HISA rates, why would u even want to lock up your money to inaccessible for 3 years. These rates are going to be here for a while.
Scotia Momentum Plus 3.90%
Meridian 3.65%
Manulife 3.5%
Duca 3.25%
Saven 3.15%
Motive 3.0%
Oaken 3.0%
Tangerine 3.0%
7:54 am
September 11, 2013
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You lock in because you think HISA rates will do worse over that term, e.g. there's a recession soon and rates collapse. I guess.
7:58 am
January 13, 2022
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Bill said
You lock in because you think HISA rates will do worse over that term, e.g. there's a recession soon and rates collapse. I guess.
Surprised you'd even have to write this...it's pretty much obvious.
8:33 am
October 27, 2013
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The more important observation I think is not to put all eggs in one basket. No one here really has any crystal ball on whether inflation, and thus BoC rates, will stay high for longer, or whether a recession and a collapse in inflation (and thus BoC rates) will occur within a year or so. No one here, other than the pre-boomers and boomers, have experienced a period of high inflation (pre-1995) in the investing arena. It is uncharted territory for them.
Diversification in 'commitment duration' seems fundamentally more important now than it has been at any time in the past few decades.
9:22 am
May 2, 2018
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canadian.100 said
With the following current HISA rates, why would u even want to lock up your money to inaccessible for 3 years. These rates are going to be here for a while.
1. A 4.5% 3yr GIC is readily available on most brokerages and banks, while it can be a pain to set up a new HISA.
2. 4.5% is higher than HISA rates.
3. If you don't need the money in next three years, locking it up is irrelevant.
4. 4.5% is a decent rate to enjoy for 3 years.
5. HISA and GIC rates could quickly drop, leaving you without any good fixed income options.
9:32 am
December 16, 2020
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Speaking of 'escape hatches' . . . being in my 2nd year of RIF forced withdrawls, I was delighted to hear that locking in for 5 year/5% term still means one can withdraw any or all RIF holdings so long as one is willing to take the tax hit.
i.e. unlike TFSA or non-registerd money which once locked at 5 years are 'komplett verboten', locking a RIF at the current highest 5% rate means all the money (minus the tax hit) is actually still available if ever desired or needed. Et voilà, a tidy escape hatch perk for seniors!
Pardon the presumptious language diversions, learning new languages is part of my retirement plan 😉
3:16 pm
September 11, 2013
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highlyinterested, I agree with most of your points, though it's way too early to declare 4.5% will end up being a decent rate over the next 3 years.
Interesting to me the amount of "market timing" GIC savers are doing here, an error often attributed to many equity investors, though I can see jettisoning the disciplined ladder-approach can appear appropriate when rates are clearly on the rise.
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