Log In
Register
Home
Topic RSS
Facebook
Twitter
Email this9:37 pm
January 20, 2024
Offline
Hi, folks, first-time poster.
My mom recently received a term deposit statement from TD bank. There, she noticed a few unusual things. She plans on heading into her branch to discuss this, but in the meantime, she was wondering:
1) why the issuer for one GIC shows up as TD Bank and the other as TD mortgage corporation (the latter worried her a bit) - does it matter?
2) How interest type is decided. It seems like she was automatically 'assigned' the SIMPLE interest type at the time of opening a GIC with an advisor and was not prompted to choose.
3) Why maturity value for the GIC with the SIMPLE interest type shows as less than the current value of the GIC.
Could anyone please clarify? Thank you.
10:13 pm
April 6, 2013
Offline
TD Canada Trust branches can offer deposits from these CDIC members in the TD Bank Group:
- The Toronto-Dominion Bank
- TD Mortgage Corporation
- TD Pacific Mortgage Corporation
- The Canada Trust Company
It matters when one has more than $100,000 in deposits; only $100,000 of deposits can be CDIC insured at each individual CDIC member.
Simple interest, in contrast to compound interest, means when the GIC interest is paid, the interest is paid out and not added to the GIC's principal. No choice was offered probably because TD doesn't offer compunding more frequently than annually and her GIC's are one year or less to maturity.
7:54 am
September 11, 2013
Offline
Re question 3) maybe the current value includes interest accrued to now and not paid out yet whereas at maturity only the GIC's principal amount is shown.
8:36 am
April 6, 2013
Offline
Section 6 of federal Deposit Type Instruments Regulations (SOR/2011-98) defines current value as principal plus accrued interest:
Information — current value
6 An institution that issues a deposit type instrument must, if requested by the person to whom it is issued, disclose to the person without delay the amount of the principal and accrued interest on the day the request was made.
For a non-compounding GIC, it makes sense that the current value would drop back to original principal value at maturity after the accrued interest is paid out.
Please write your comments in the forum.