Best Current Rates for USD GICs | Page 2 | GIC discussions | Discussion forum

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.

It's interesting to compare SBI's rates on USD deposits in Canada (GIC), New York (CD), UK (FD), and India (FCNR).

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%?