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Best Current Rates for USD GICs
November 17, 2022
8:33 am
bigzim
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Wow..... beeen on the website for a while. Ok on my end.

November 17, 2022
10:40 am
savemoresaveoften
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bigzim said
I think you may want to do more homework on this multinational before jumping to conclusions. Besides. CDiC covered. The invested capital worldwide dwarfs the Canadian institutions. Up to you.

State Bank of India (SBI) a Fortune 500 company, is an Indian Multinational, Public Sector Banking and Financial services statutory body headquartered in Mumbai. The rich heritage and legacy of over 200 years, accredits SBI as the most trusted Bank by Indians through generations.

SBI, the largest Indian Bank with 1/4th market share, serves over 45 crore customers through its vast network of over 22,000 branches, 62617 ATMs/ADWMs, 71,968 BC outlets, with an undeterred focus on innovation, and customer centricity, which stems from the core values of the Bank - Service, Transparency, Ethics, Politeness and Sustainability.

The Bank has successfully diversified businesses through its various subsidiaries i.e SBI General Insurance, SBI Life Insurance, SBI Mutual Fund, SBI Card, etc. It has spread its presence globally and operates across time zones through 229 offices in 31 foreign countries.  

The wiki page or their headquarter web page may all be correct.
But if they can’t even put together a professional site for their Canadian arm, it’s not for me. When I clicked on their own link to look at ‘who we are’, it crashed. Enuf said, no thanks.

November 17, 2022
2:54 pm
Norman1
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dickyran333 said
… The IL CSR appeared to be quite new and so when I highlighted my ATON experience at other institutions, he spoke to his supervisor and then told me that earliest they can do is 3 weeks. So I’m going to consider at least 4 weeks from the time I open the account. The iTrade CSR was quite a pro and was well aware of ATON. But he still told me that it takes 4 weeks at iTrade. I don’t know what they do with these funds for 3 extra weeks.

Anyway, do you guys think that the USD GICs would still be available after 5 – 6 weeks? Or Scotia & BMO may get enough USD and withdraw their GIC offers?

While IBKR doesn’t charge transfer out fees, both iTrade and IL will charge $150 each should I have to move funds out because they withdrew their 5% USD GICs and they don't have any USD GIC offer worth considering.

Scotia iTRADE likely doesn't have the incoming funds for those three extra weeks. The transfers department is likely understaffed and takes a week or two to get around to handling the request even if it is done through ATON.

Yes, it is risky to transfer RRSP US$ without a rate hold on those US$ GIC's. As you wrote, Bank of Montreal or Bank of Nova Scotia could see too much US$ funds flow into those GIC's over the next few weeks and lower the interest rate to correct the situation.

It looks like the BMO InvestorLine and Scotia iTRADE US$ GIC's offerings are only good for new RRSP contributions which can be placed into the GIC's immediately.

November 19, 2022
1:18 pm
dickyran333
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Thanks Norman1 for your note. I agree with you. These offers are better for new RRSP funds that can be invested immediately than for RRSP transfers that might take over a month.

I’d also like to thank seh for posting SBI Canada rate. I had visited their website a couple of weeks ago but the rates then were far lower.
I see that some posters have commented on the safety of the funds with SBI Canada because of their not-so-professional website or maybe because the site was down when they accessed it. And this is quite understandable.

But for me, this is a golden opportunity. I’ve absolutely no issues with SBI Canada. SBI Canada is a wholly-owned subsidiary of State Bank of India (SBI), which is the largest bank in India, with a massive rural network. The Govt of India holds almost 60% stake in SBI and it will NEVER ever allow SBI to go belly up.

India depends quite heavily on Indian diaspora for foreign deposits. FIIs bring funds in, invests in stock markets, and then when things go sour, take the funds away in huge amount fairly quickly. But the non-resident Indians investments are fairly stable. So it's very unlikely that India would let Indian banks allow to default to these NRIs. If smaller banks or credit unions (called co-operative banks in India) face financial issues, Indian Govt or Reserve Bank of India (RBI - similar to our BoC) may not interfere. However, that won't be the case with most of the medium and large private sector banks, and definitely not with any of the scheduled public sector banks (SBI is one of them).

Just a few years ago, Yes Bank got into financial trouble. It was then 7 or 8th largest private sector banks (not even a public-sector bank). But RBI interfered and brought a few other banks / investors together to bail out Yes Bank. No one lost even a single Indian rupee (INR). Given this, I can’t even think anyone would lose their funds with SBI Canada.

To put things in perspective, the annual revenue of SBI was USD 51 billion (compared with RBC’s USD 46 billion).

In my opinion, if one is fine parking their USDs for an year at 5.6%, then this GIC offer is as good as any AAA-rated bond offer by RBC or TD. I just wish we had a way to make USD GIC investments at banks eligible for registered accounts. I also wish they had offered this rate for 5 years so I could have blocked most of my non-registered USDs. Nonetheless, I'll visit the local branch and invest about 30% of my non-registered USDs in this 1-year GIC.

I agree that SBI is not as up-to-date with their IT systems as Canadian banks are. But I’m not going to bank with them on a daily basis anyway. I don’t even plan to open a chequing or savings account -- just get the GIC, mark the maturity date on my calendar, and review this investment maybe a week before the maturity. So I’m willing to overlook any deficiency with the appearance of their website. Also, note that the two Indian banks having presence in Canada, viz., SBI and ICICI, have their IT operations in India and they often undertake their IT releases during Indian night time (10 to 13 hours behind us) and so if you try to access their website during a server restart then it’s possible to get an error. However, I understand if someone wants to assess the safety of one’s funds based on their site availability. I’d have perhaps done the same if I had not known about SBI.

November 19, 2022
1:59 pm
bigzim
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Thanks for a very rational and concrete answers regarding SBI.

November 20, 2022
12:55 pm
dickyran333
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It's interesting to compare SBI's rates on USD deposits in Canada (GIC), New York (CD), UK (FD), and India (FCNR).

SBI_USD_GIC_Rates.GIF

It's quite surprising to see that they are paying much higher interest rates across all terms in Canada. Also, I see that the next best 1-year USD GIC rate by a Canadian bank is just 4.5% by ICICI Canada. Tangerine is offering 4.75% on a 3-year USD GIC. So what would make SBI suddenly beat these rates by a huge margin of 0.85 to 1.1%?

November 20, 2022
2:04 pm
Loonie
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Very interesting.
I have no idea why.
Perhaps our banking system is easier (cheaper) for them to negotiate or has more local investment possibilities or they want to court Canadian business - probably mostly people of Indian descent - for other purposes?.

November 20, 2022
2:39 pm
savemoresaveoften
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dickyran333 said
It's interesting to compare SBI's rates on USD deposits in Canada (GIC), New York (CD), UK (FD), and India (FCNR).

SBI_USD_GIC_Rates.GIF

It's quite surprising to see that they are paying much higher interest rates across all terms in Canada. Also, I see that the next best 1-year USD GIC rate by a Canadian bank is just 4.5% by ICICI Canada. Tangerine is offering 4.75% on a 3-year USD GIC. So what would make SBI suddenly beat these rates by a huge margin of 0.85 to 1.1%?  

is there a easy way to fund it as in one can deposit USD into the account and then purchase a GIC ? Or one needs to "buy" usd from them and then buy a USD GIC.

If its not 100% fundable in USD and linkable to other FIs, feels like a lot of work ?

November 20, 2022
3:53 pm
dickyran333
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I spoke with the local branch yesterday.

No, you don't have to buy USDs from them. There are two ways to fund the USD GIC.

1) They offer USD chequing and USD savings accounts. You can open either of these accounts, bring the funds in, and then open and fund the GIC. However, both accounts require a minimum balance or YOU pay the monthly account maintenance fee. The chequing requires USD 1,000 or USD 4 per month while savings (called Super Saver) requires USD 2,000 or USD 12 per month. There's a fee if the account is closed within six months, but I forgot the amount (maybe $50).

2) Open just a GIC account. Pay by a USD cheque drawn on a Canadian bank and then they will open the GIC on the day the cheque is cleared and send you the certificate by snail mail. When the GIC matures, get a draft (I think it costs $7 or $10).

For me, the second method makes sense. Why bother opening and closing a USD chequing or savings account and maintain minimum balance if I have no use of that account for other things like ATM, bill pay, etc. Also, from the pure number perspective, if you keep USD 1,000 in their chequing account for a year at 0% (no interest on chequing), you lose an interest of USD 56 (5.6%). Similarly, their savings account currently pays only 0.4%---I wonder why they call it a Super Saver---and so if you keep USD 2,000 for a year, you lose USD 104 (at the rate difference of 5.2%). So on maturity I'd rather pay USD 10 for a draft and close my relationship unless they have another decent offer.

Sorry, I didn't bother to ask about linking external accounts. But as I understand now, if you open a chequing or savings account and thereby have an institution code, a transit number, and an account number, you should be able to link the SBI account from another bank. But I'd suggest to ask them if you want to explore this route.

November 21, 2022
6:30 am
seh
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Easily done once account is opened. Download a Void SBI cheque, and send it to whichever bank/brokerage account you want to link it to. Then pull/push funds from there.

November 30, 2022
2:37 pm
Fritz23
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I bought US$ IGIS at SIB Canada, the only is very manually run by people in the branch. The IT wasn't really stable,. I got it done but it is an effort.

November 30, 2022
2:42 pm
Fritz23
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Any update on US$ GIC rates are available through Scotia iTRADE and BMO InvestorLine? Can't find these information online. Thanks

November 30, 2022
3:10 pm
canadian.100
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Fritz23 said
Any update on US$ GIC rates are available through Scotia iTRADE and BMO InvestorLine? Can't find these information online. Thanks  

Scotia iTrade definitely has US$ GICs - min purchase $1000
1 year to 5 year 4.8% to 5%

November 30, 2022
5:54 pm
Norman1
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There's been no change to the US$ GIC rates at Tangerine, BMO InvestorLine, and Scotia iTRADE since my earlier snapshot.

November 30, 2022
8:37 pm
Fritz23
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Thank you both.

December 1, 2022
3:25 pm
Fritz23
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@Norman1

Can I link external accounts from other banks to BMO and Scotiabank checking accounts (which I automatically get when I am opening iTrage and IL)?

Thanks,
F

December 1, 2022
3:42 pm
Norman1
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No chequing account comes with the Scotia iTRADE brokerage accounts. However, Scotia iTRADE does offer linking to external bank accounts in order to pull funds into and push funds out of the iTRADE brokerage accounts. See EFT request form.

BMO InvestorLine non-registered accounts come with a companion AccountLink BMO chequing account. Linking to external accounts not offered, neither by BMO InvestorLine nor BMO.

December 1, 2022
11:38 pm
Fritz23
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Thank you,Norman1.
Can I link both accounts as aexternal accounts at others banks like Tangerine or Huberts?

December 2, 2022
5:11 am
Norman1
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Other banks can only link to the companion AccountLink BMO chequing account.

The Scotia iTRADE brokerage accounts are not bank accounts and cannot be linked to at another bank.

BMO InvestorLine and Scotia iTRADE have set up their brokerage accounts to receive bill payments. So, one can bill pay to them, like a utility bill, at another bank to add funds.

December 3, 2022
8:25 pm
Fritz23
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Thanks, Norman1.
What are the limits to push out and pull in money if iTRADE is setting up EFT via their form? If there are any limits can I call them to transfer more like at Tangerine or Hubert?

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