Historical Gic rates | GIC discussions | Discussion forum

Bud said
Where to find? besides tangerine  

I found the historical interest rates at Tangerine only recently. In the last 4-12 months. I was interested in a small segment of the information. They are competitive. I would expect the 5 year rates are within .25% of competition. I bought a short term deposit in May 2018. Then I tried longer term when I decided where I wanted to purchase. All rates can be adjusted anytime. For book keeping I prefer one statement. Each individual is UNIQUE.

dentgal said
Does anyone want to look into their crystal ball and try to prognosticate where rates will go in the next few years? I'm thinking of purchasing a 2.2% Simplii GIC --I seemed to have missed the 2.5 and 2.8 rates!! Do we think this economic cataclysm with lost jobs and lost businesses will result in a low interest environment for years to come and I should purchase a 3 or 4 year GIC? Thank you. (I know that I should have laddered GICs, but most of mine will come due in the next year).  

Depends on your risk tolerance and whether you ever exceed your CDIC limits. If 'yes' to the latter, have a look at 1-10 year high investment grade corporate bonds ('A' or higher). Bank of Canada actions have helped to stabilize bond market by providing liquidity, but there were some decent 3-5% yields a few weeks ago. If 'yes' to both, then have a look at Canadian bank common shares. Unless you need to draw on the principal in a significant way, you will almost certainly be hugely rewarded for going that route.

If insisting on a GIC for comfort, then the Simplii GIC is as good as any, and you've got CIBC's very high investment grade deposit and bond ratings. Like I said, though, you may want to look into a CIBC corporate bond. The latter not guaranteed by CDIC, but is guaranteed by CIBC. So, unless you see one or more Big 5 banks going under, I'd go that route.

I do not see rates going higher in the next 5 years, at minimum. We will have sub-3.0% GIC rates for >= 5 years. As such, I've shifted my short-term bias to long-term in terms of GIC duration.

Edit: Including a fixed income screen screenshot from Scotia iTRADE. Parameters: below par, A-AAA (inclusive), and federal, provincial, municipal, and corporate. Much smaller list, but there's a Canadian Western Bank bond, below par, with a yield to maturity of > 3%. Also, Central 1 Credit Union has a similar bond. Central 1 is owned by the B.C. and Ontario credit unions.

Figure 1: 1-15 year corporate bonds rated A or higher from Scotia iTRADE as at today's date

Cheers,
Doug

It all depends on the rate of inflation. There is a good argument inflation will be low for the next year or two ... three years at most. After that, my crystal ball doesn't give me much guidance.

I argue for shorter maturities, two years or three years tops. By that time, the stock market will have stabilized and dividend yields should be attractive. If inflation starts up, you'll be able to invest in higher yield GICs, or stocks that have some upside inflation protection.

dentgal said
Thank you, Doug. I do have a portfolio with Scotia MacLeod which includes lots of bank stocks, some preferred shares (which I never like), balanced funds, S&P 500, etc etc. I have always kept lots of CASH (as in GICs) as I was brought up by my Dad--who lived through the depression and always predicted another one. My dad--who was probably certifiably crazy--had a way of predicting things which seem to come true. Are we headed for another depression? He didn't invest at all. Only GICs. He would be rolling in his grave if he knew that I was so heavily invested. But I have about 1/2 of my portfolio in GICs--most are getting approx 3.0% and I can sleep at night. So the money that I was asking about is going to be re-invested in a GIC. So it sounds like you are suggesting a long term. (Right now, Simplii is paying me 2.8 until April 30th but I don't expect them to maintain this rate and I do think that things will slip down). Thank you again!  

My parents were brought up during the depression. I helped them invest some of their GICS in stocks.