5yr ask | GIC discussions | Discussion forum

hotmony said
Who has the top 5yr currently?

is it harder to negotiate a 5yr deal than 1 2 or 3..  

I would use the CANNEX chart, hotmony. It's pretty comprehensive since they started adding direct-to-consumer, not just deposit broker, rates.

Looks like Manitoba's Me-Dian Credit Union might be tops for the 5 year GIC rate, at 3.30%, as at June 12, 2019. Interestingly, Me-Dian Credit Union is one of those six Manitoba bricks & mortar credit unions I profiled recently that removed residency requirements and added all-digital membership opening. As @Shawguy mentioned in that thread, though, watch out for their chequing account at $45/month (reduced to $40/month if you enroll in e-Statements). 😉

Luminus Financial Credit Union seems to be the next highest, at 3.25%, according to CANNEX.

Hubert Financial and a number of other Ontario and Manitoba credit unions are in third place, at 3.10%.

You might also try browsing the "GIC Discussions" forum of this message board. The forum members are pretty good with spotting the highest rate.

Cheers,
Doug

hotmony said
Highest then Luminus 5yr esc.  

Ah, a bit hard to clarify what you mean, but if I've interpreted correctly, you're saying Me-Dian's 5-year GIC is the highest, but Luminus 5-year escalator GIC is technically a bit higher than its 5-year regular GIC? If so, no problem. I was just going by the CANNEX rates, which I think don't list escalator GIC rates. However, that's a good point - usually what I do is use CANNEX (and this site) as "guideposts" for narrowing down which FIs to check out and then I'll first (a) confirm that the quoted rates are still current and (b) see if they have either (i) any special/promo GIC rates that interest me or (ii) any escalator GICs that didn't show up on CANNEX.

Cheers,
Doug

dealjunkie said
Can u pinpoint when was the peak 5yr buy signal  

@dealjunkie I think you're mixing technology here. GICs don't have "buy signals" like equities do..."buy signals" refer to certain indicators in technical analysis that pinpoint when a stock has been oversold, for example, and may be a good buy.

The point is, there's no such "signals" on when to buy a GIC. Thus, I'm not quite sure what you're asking. @Loonie, can you make heads or tails of @dealjunkie's question?

Cheers,
Doug

No, Doug. I don't know what he's asking, so didn't bother responding. If the question is clear, and I have a response, I will offer it.

dealjunkie said
Does the 5yr or 10yr bond always predict gic rates?  

Not necessarily. It depends on the market. As Norman1 has pointed out, in some markets, like Denmark, the banks operate like a lending syndicate akin to mortgage brokers in that they immediately sell, for a fee, the mortgage they originate, and they make nominal servicing fees to administer the mortgage. (These fees are not significant - just ask Street Capital Bank of Canada, which does much the same thing in that most of its mortgages it offloads - so it becomes a scale play.)

In markets like Canada where banks still hold mortgages on their balance sheets, for the most part, they fund those mortgages using GICs, bonds, and on- and off-balance sheet special purpose securitization vehicles. So, on the one hand, yes, bond yields influence GIC rates, but it's usually in an indirect or tangential way. Bond yields themselves tend to influence mortgage rates, so we could see mortgage rate drops, but we're not in the banks' main mortgage selling season (that is typically the spring and lead up to the spring, the banks may decide to take this as an opportunity to increase their effective net interest margin a bit).

Trying to predict when to buy a 5-year GIC based on interest rate directional probability is a bit of a Mugg's game. You're essentially asking us to be your crystal ball, but we don't have that ability to see the future with any degree of reliably consistent accuracy. 😉

I personally think GIC rates are headed down, but that's just my prediction based on historical patterns. There's no certainty history will repeat itself. Besides, if the banks do decrease their mortgage rates, with the bond yields down so much, there may be less impetus for them to maintain GIC rates, but at minimum, they certainly don't need to increase rates. For these reasons, I think you would do well to keep your GIC ladders short - I personally have no GICs longer than 3 years.

Cheers,
Doug

Doug said
For these reasons, I think you would do well to keep your GIC ladders short - I personally have no GICs longer than 3 years.

Cheers,
Doug  

I personally stay the course. I have a GIC maturing first week of Sept in my RRSP. I will renew at the then 5 year rate at my discount brokerage OR I will look at certain selected 5 year term notes OR corporate bonds, investment grade of course. But I won't waver from continuing the 5 year ladder (10 holdings spaced approximately 6 months apart).