Hubert Rates up, 19 Jan 2018 | Page 3 | Hubert Financial | Discussion forum

I'm a Hubert newbie.
I see that they are not CDIC accredited, but they are backed by the Manitoba government. Is that correct? Is it up to $100,000? Do they have different "branches" to increase the limit?

I've been reading the thread here and have more questions!

-is is easy to set up a GIC online?
-I'm confused about the rate re-set after 3 months. If you purchase a 2 yr GIC at a certain rate, isn't the point that you are guaranteeing that rate for the 2 years?

p.s. last point: I know that you are supposed to stagger your GICs so that they have different maturity dates. So 3% for 5 years. Are we expecting rates to keep going up? I thought that we are, so I'm hesitant to do 5 year.

dentgal, Hubert's 1-year GIC has different (ascending) rates for every quarter of the year. The current 4 quarterly rates of 2.3%, 2.4%, 2.5% & 2.6% average out to 2.45% if you keep the GIC for the entire year (the year starts the day you buy the GIC). You have the option of cashing it in any time during the year but you will only get interest until the end of the previous quarter. If Hubert changes its rates while you hold the GIC that has no effect on your GIC - of course, if you want to cash it in and then buy a new 1-year GIC you will get the current rates for the new one.

Hubert's 2 to 5-year GICs are the traditional, non-redeemable ones with a rate set at time of purchase for the duration of the term.

Loonie said
…
Yatti, several Canadian financial institutions have failed - just not recently. I can't speak to the circumstances, but, as there were quite a few in relatively quick succession, it may have been related to circumstances outside of the FIs themselves.…

I have first hand experience with two. It was decades ago.

Central Guaranty Trust failed because of commercial real estate loans gone bad. By the time CDIC took over, it was insolvent. What was left was sold to TD. 100% loss for shareholders like me. CDIC was stuck with the bad loans and foreclosed properties.

Royal Trust failed for the same reason. CDIC took over early enough that it wasn't insolvent yet. But, it no longer met capital requirements to operate as a trust company. CDIC eventually found a home for the desirable pieces at the Royal Bank. I think CDIC came through that one unscathed.

The unwanted bad loans and so on were left to the parent company, Royal Trustco. Parent company was renamed Gentra. Gentra became a specialist in distressed assets! Shareholders, like me, took a hit. But, it wasn't a 100% loss.

Apparently the last CDIC financial institution failure was in 1996.

According to the CDIC website: "Since its creation by Parliament in 1967, CDIC has handled 43 bank failures, affecting more than 2 million depositors. No one has lost a single dollar of insured deposits." All 43 failures are listed on the site.

As far as credit unions go, it seems to me that, more often than not, when a credit union is in trouble, a larger and more stable one gobbles it up. You hear about CU mergers all the time.

I have used Manitoba credit unions for deposits for years. Yes, the risk is greater than using a chartered bank, but the rewards generally have been greater. There are numerous institutions offering decent GIC rates right now, so there are choices. Oaken is safe as long as you respect the CDIC insurance limits. Motive Financial is also over 3% for 5 years and is CDIC insured.

gicjunkie said
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According to the CDIC website: "Since its creation by Parliament in 1967, CDIC has handled 43 bank failures, affecting more than 2 million depositors. No one has lost a single dollar of insured deposits." All 43 failures are listed on the site.

That CDIC list is not complete. Royal Trust and Continental Bank are not on the list. Perhaps those on the list are just the ones that CDIC was out of pocket on.

According to "Lloyds to repay Continental debt to central bank" (The Globe and Mail; 24 Oct 1986; page B5), Continental Bank was kept afloat by a $1.5 billion line of credit from six major chartered banks plus just under $3 billion from Bank of Canada.

There was no problems with their loans. There was a $3 billion run by institutional depositors in September 1985, who became nervous after Canadian Commercial Bank and Northland Bank ran into trouble.

Similar to what happened with the Home Capital Group (Home Trust, Home Bank, Oaken) last year.

As far as credit unions go, it seems to me that, more often than not, when a credit union is in trouble, a larger and more stable one gobbles it up. You hear about CU mergers all the time.

That's probably from regulators acting behind the scenes.

The deposit insurance corporations are not just passive insurers who issue cheques after an institution implodes. They do have the power to take control of a troubled institution and put it up for sale. To make it non-toxic to a buyer, the deposit insurance corporation can kick in money or guarantee the bad loans.