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Email this3:08 pm
January 13, 2022
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There’s upward pressure on five-year GIC rates
When five-year GIC rates popped above 5 per cent at a wide selection of alternative banks during the summer, one of the drivers was a move higher by five-year Government of Canada bonds. The five-year Canada bond yield then declined, which is why some alt banks chopped their five-year rates back below 5 per cent. Lately, the five-year Canada bond yield has returned to those peak levels of early summer. Watch your favourite alt bank to see if 5-per-cent yields for five-year terms come back. Note that there are roughly eight online banks and credit unions offering 5 per cent for five years. At peak, there were roughly 11.
High rates won’t last
A recent interest rate forecast from CIBC Economics offers some helpful guidance on what to expect from rates. Government of Canada bonds are expected to move modestly higher by year’s end and then edge lower in 2023 and 2024. For example, the two-year Canada bond yield is forecast to rise from about 4.1 per cent in mid-October to 4.35 per cent in December, then hit 4 per cent in March, 3.75 per cent in June, 3.55 per cent in September and 3.1 per cent in December. The actual yield forecasts matter less than the idea that investors who like GICs have a few months to lock in rates at peak levels.
-- Rob Carrick, personal finance columnist
3:18 pm
January 12, 2019
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.
FYI . . .
Rob Carrick is a well known and respected financial author & columnist.
Background ➡ https://www.theglobeandmail.com/authors/rob-carrick/
.
- Dean
" Live Long, Healthy ... And Prosper! "
7:32 pm
March 8, 2022
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Dean said
.
FYI . . .Rob Carrick is a well known and respected financial author & columnist.
I agree, I subscribe to the Globe and read all his columns.
BUT, in Real Estate I am asked questions everyday about the future, and I don't know is my only honest answer I can give.
There is of course the classic answer.. and that is if I could tell the future you would calling my sat phone while I tour the Caribbean on my yacht....
6:47 am
December 12, 2021
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rpotter28 said
Dean said
.
FYI . . .Rob Carrick is a well known and respected financial author & columnist.
I agree, I subscribe to the Globe and read all his columns.
BUT, in Real Estate I am asked questions everyday about the future, and I don't know is my only honest answer I can give.
There is of course the classic answer.. and that is if I could tell the future you would calling my sat phone while I tour the Caribbean on my yacht....
He used in his article "rate forecast from CIBC Economics" in the other hand TD Economics is lower by 0.40% and RBC and JPMorgan much higher.
9:05 am
October 27, 2013
Online
They are all only guesses. Just like what everyone does here.
9:34 am
January 12, 2019
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AltaRed said
They are all only guesses. Just like what everyone does here.
To a certain extent, True ⬆
But as most of us know, there's a Vast difference between 'Educated Guesses', and 'Baseless Verbal Diarrhea'.
I'll take the Educated ones, over the other ... any day ❗
- Dean
" Live Long, Healthy ... And Prosper! "
6:06 am
April 27, 2017
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Would be interesting to take historic “educated guesses” by Rob and others to see if they are any better than a coin toss.
8:29 am
August 19, 2022
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Just booked in a Five Year 5.25% annual compound in my registered account. Not too shabby. Legging in accordingly. I have 1 through 5 years maturing annually. Laddered maturities is always the most prudent way to invest in GIC's.
Anyone's guess where rates will peak. In the meantime, always have cash available and or maturing to reinvest.
9:53 am
December 12, 2021
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ECB hikes rates by 75 basis points link here
USA Mortgage rates top 7% for the first time since 2002 link here
Bank of Canada statement "Given elevated inflation and inflation expectations, as well as ongoing demand pressures in the economy, the Governing Council expects that the policy interest rate will need to rise further"
those headline keeps me away from buying GIC, and since we know BofC more hikes are coming wouldn't be wise to just hold on few more months?
PS. TDI one year practically 5% at 4.92% and all other rate over 5% big jump in the last 2 weeks
10:00 am
October 27, 2013
Online
Maybe but somewhere most likely in the next few months, we may start to see a decline in GoC5 and GoC10 bond yields in which case 5 year GICs may also start a decline like they did temporarily a month or two ago.
10:36 am
March 18, 2021
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Dean said
.
FYI . . .Rob Carrick is a well known and respected financial author & columnist.
Background ➡ https://www.theglobeandmail.com/authors/rob-carrick/
.Dean
The Globe and Mail are house pumpers. All their articles relate to home prices can only go higher even when they're falling. Disregard anything from the Globe and Mail. All they did was "string" suckers into buying homes before the collapse of February this year.
10:41 am
March 18, 2021
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AltaRed said
Maybe but somewhere most likely in the next few months, we may start to see a decline in GoC5 and GoC10 bond yields in which case 5 year GICs may also start a decline like they did temporarily a month or two ago.
The Canadian Tire Bank 5 year GIC seems to track the 5 year GoC bond yield.
1:02 pm
April 14, 2021
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Rhino said
Just booked in a Five Year 5.25% annual compound in my registered account. Not too shabby.
Where did you find a 5-yr GIC for 5.25% in registered accounts? The only one I could find was Habib, but it was in non-registered GIC.
2:04 pm
February 7, 2019
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HermanH said
Rhino said
Just booked in a Five Year 5.25% annual compound in my registered account. Not too shabby.Where did you find a 5-yr GIC for 5.25% in registered accounts? The only one I could find was Habib, but it was in non-registered GIC.
Not 5.25% but 5.20% @ TNG ...
| CGO |
10:20 am
March 18, 2021
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lifeonanisland said
There’s upward pressure on five-year GIC ratesWhen five-year GIC rates popped above 5 per cent at a wide selection of alternative banks during the summer, one of the drivers was a move higher by five-year Government of Canada bonds. The five-year Canada bond yield then declined, which is why some alt banks chopped their five-year rates back below 5 per cent. Lately, the five-year Canada bond yield has returned to those peak levels of early summer. Watch your favourite alt bank to see if 5-per-cent yields for five-year terms come back. Note that there are roughly eight online banks and credit unions offering 5 per cent for five years. At peak, there were roughly 11.
High rates won’t last
A recent interest rate forecast from CIBC Economics offers some helpful guidance on what to expect from rates. Government of Canada bonds are expected to move modestly higher by year’s end and then edge lower in 2023 and 2024. For example, the two-year Canada bond yield is forecast to rise from about 4.1 per cent in mid-October to 4.35 per cent in December, then hit 4 per cent in March, 3.75 per cent in June, 3.55 per cent in September and 3.1 per cent in December. The actual yield forecasts matter less than the idea that investors who like GICs have a few months to lock in rates at peak levels.
-- Rob Carrick, personal finance columnist
The Canadian Tire Bank 5 year GIC seems to track the 5 year GoC bond yield.
Their 5 year GIC rate fell .25 percent today.
10:49 am
October 21, 2013
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This may sound like a dumb question, but where does one look to find Govt of Canada bond rates?
11:11 am
January 12, 2019
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Loonie said
This may sound like a dumb question, but where does one look to find Govt of Canada bond rates?
When in doubt, 'Google' it 
. . .
.
Dean
" Live Long, Healthy ... And Prosper! "
9:33 am
December 12, 2009
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Dean said
To a certain extent, True ⬆
But as most of us know, there's a Vast difference between 'Educated Guesses', and 'Baseless Verbal Diarrhea'.
I'll take the Educated ones, over the other ... any day ❗
Dean
Who defines the difference between an educated guess and baseless verbal diarrhea?
We lose something, collectively, as a society, when we start giving extra weight to one person's guesses and prognostication who happens to have a Globe & Mail newspaper column over someone else's guesses and prognostication. The only reason he, and others like him, has/have newspaper columns is because they've invested capital in building their online brands, personal finance weblogs, and the like such that they have name recognition around which the Globe & Mail feels they can capitalize on that.
I would maintain what AltaRed said below stands:
AltaRed said
They are all only guesses. Just like what everyone does here.
Cheers,
Doug
9:38 am
December 12, 2009
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Loonie said
This may sound like a dumb question, but where does one look to find Govt of Canada bond rates?
The fluctuate daily, but the Bank of Canada maintains a daily average Government of Canada bond yields:
https://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/
Actual bond issuances outstanding are also maintained by the Bank of Canada, though the Department of Finance Canada website likely has this information, too, though likely not as conveniently displayed:
The Bank of Canada currently has zero GoC treasury bills outstanding, but does still hold ~$400 billion of the $1.2 trillion of GoC bonds, https://www.bankofcanada.ca/markets/government-securities-auctions/bank-of-canada-holdings/, which could be another reason we may see a moderation or decline in bond yields, particularly if the Bank of Canada decides to moderate or pause their interest rate hikes and switches to engaging in a QT regime.
On that note, the Bank of Canada has recently published this staff analytical note, which explains the potential impacts to Canada's banking system as and when the Bank of Canada's QT phase begins.
Cheers,
Doug
9:41 am
December 12, 2009
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Dean said
When in doubt, 'Google' it
.
Dean
I'm fairly certain Loonie knows how to Google something. Perhaps we can skip the posting hyperlinks to Google web search if we do not have a response to a question? It does tend to add overall post clutter. Just a thought. 🙂
Cheers,
Doug
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