TFSA broken out into quarters | Hubert Financial | Discussion forum

IT'S A GREAT FEATURE! YOU CAN CANCEL AT ANY OF THE THREE MONTH ENDINGS WITHOUT LOSING ANY INTEREST FOR THAT PERIOD. THE RATES ARE LADDERED, SO YOU GET THE MOST BY WAITING THE TWELVE MONTHS.

THIS IS ONLY AVAILABLE WITH THE 12 MONTH TERM WHERE IT SHOWS THE BREAKDOWNS OF THE RATES FOR EACH THREE MONTH PERIOD. OR, IF INTEREST RATES GO UP YOU CAN CASH IN AND REINVEST AT THE NEW RATES.

THE TWELVE MONTH, IF KEPT FOR THE FULL YEAR PAYS 12.45% AVERAGE.

The 1 year term pays 2.60% if kept in for the entire 12 months.

3oakwest said
Correct semi-retired. The first quarter is 12.45%, then second quarter 12.55%, third quarter 12.65, and fourth quarter 2.75% That will average out to 2.60% Sorry about that.

That makes it even better!!!  

1st quarter 2.45%,2nd quarter 2.55%,3rd quarter 2.65%,4th quarter 2.75% average 2.60 for the year.

Chuck, you don't add up these rates to get a rate for the whole year. Each rate is an annual rate, but only applies to one quarter of the year. The correct rate for the whole year, if you kept the money there for the whole year is 2.60%.
If you kept it in for, let's say, six months, the rate would be the average of the rates for the first two quarters, which would be 2.5%.

It's a good deal if you need the flexibility of being able to take the money out

Yes, that sounds about right. didn't mention it because i thought Chuck might be confused enough already. I was trying to simplify.

To add to what has been said in this thread, and Norman I very impressed that you took the time to post your comments in both CAPS LOCK and regular mixed case for both Chuck's our benefit, I have the 1-year Hubert quarterly GIC, and quite like it, although I've never actually withdrawn anything early. I like the flexibility. I'm currently in my third quarter of my second year of having it, which pays me 3.15% until October 19...following that, it will go up to, I think, 3.25% and my effective average annual interest rate will probably be something between 3.10-3.15% for the four quarters. Note also from Norman's calculation, sometimes the quarter period is 91 or 92 days. Generally what I do is count the days on a calendar inclusive of the quarterly renewal date (19th) but exclusive of the next quarterly renewal date. The interest paid has been accurate to the nearest penny, without fail, for the past six quarters I've double-checked it.

(I use a somewhat modified variant of Norman's formula, amount * quarterly interest rate / 365 * 90-92)

One thing Hubert doesn't tell you on their website is that when you go into a 1-year quarterly GIC, which isn't, unfortunately, available in a RRIF for reasons unknown, is that they guarantee that rate from going down. However, as interest rates rise, you don't, as I incorrectly suspected, get the higher rate for the remaining quarter(s) of your current 1-year GIC term. In this way, it's not like a prime-linked GIC that fluctuates with the bank's prime rate. Originally, when rates were rising, I was a bit miffed, but since the BoC has reversed course, initially in tone, language, and sentiment, as it trails the U.S. Fed, this has been wonderful.

A great product.

Cheers,
Doug

SORRY BUT I'M STILL BEFUDDLED. PLEASE CHECK MY MATH. LETS ASSUME HUBERTS RATE TO BE 2.5% FOR JAN, FEB. & MAR.
2.6% FOR APR, MAY & JUNE
2.7% FOR JUL, AUG. & SEPT. AND
2.8% FOR OCT, NOV. & DEC.
THEN WITH A 60,000 INVESTMENT THE FIRST PAYMENT WOULD BE FOR 90 DAYS = $369.86, THE SECOND PAYMENT ON 60,369.86 FOR 91 DAYS = $391.33, THE THIRD PAYMENT ON 61,761.19 FOR 92 DAYS = $420.31 AND THE LAST QUARTERLY PAYMENT ON 62,181.50 FOR 92 DAYS = $438.85 FOR A TOTAL OF 62,620.35.
IF I TAKE THE MID POINT OF THE INTEREST PAYMENTS I GET 2.65 THEREFORE I GET 60,000 X 2.65 = 61,500.00.
WHAT AM I DOING WRONG?
PLEASE EXCUSE THE CAPS AGAIN.

CHUCK21 said
SORRY BUT I'M STILL BEFUDDLED. PLEASE CHECK MY MATH. LETS ASSUME HUBERTS RATE TO BE 2.5% FOR JAN, FEB. & MAR.
2.6% FOR APR, MAY & JUNE
2.7% FOR JUL, AUG. & SEPT. AND
2.8% FOR OCT, NOV. & DEC.
THEN WITH A 60,000 INVESTMENT THE FIRST PAYMENT WOULD BE FOR 90 DAYS = $369.86, THE SECOND PAYMENT ON 60,369.86 FOR 91 DAYS = $391.33, THE THIRD PAYMENT ON 61,761.19 FOR 92 DAYS = $420.31 AND THE LAST QUARTERLY PAYMENT ON 62,181.50 FOR 92 DAYS = $438.85 FOR A TOTAL OF 62,620.35.
IF I TAKE THE MID POINT OF THE INTEREST PAYMENTS I GET 2.65 THEREFORE I GET 60,000 X 2.65 = 61,500.00.
WHAT AM I DOING WRONG?
PLEASE EXCUSE THE CAPS AGAIN.  

With Hubert's quarterly GIC, Chuck, the interest is still calculated on the daily closing balance and compounded calculated quarterly.

Basically, you have to count the number of days between quarters. Do include the day you take out or renew the GIC, or the day the interest is paid quarterly, but don't include in that calculation the subsequent interest payment date next quarter. It varies, typically, from about 89-92 days per quarter.

This also assumes your balance never changes.

For instance, when my next quarter interest payment pays out October 19, 2019, I will count the number of days from July 19, 2019, through October 18, 2019, inclusive, which I get as 92 days, but I could be off as my hand jerked on the mouse as I was scrolling to the next day in August counting days, but you get the idea.

Thus, assuming my balance were, say, $31,500.00, I would multiply:

( 31,500 * 0.0315 / 365) * 92 = 250.10

It should be accurate, assuming I wasn't off by a day.

Hope that helps,
Doug

P.S. If you can't remember your quarterly interest rate, you can "view" your term deposit statement by going into the "view statement" option of "online statements" (they don't have PDFs of the term deposit statements) and go back to the last month where you had an interest payment. It shows your current quarter's rate for the upcoming 3 month quarter.

GoJetsGo said
Doug,

Please read people's questions before providing long-winded answers that don't help. Chuck's issue was not about how to calculate 90/91/92 days in a quarter.  

For clarity, I wasn't sure what his issue may be, but nonetheless, thought my information would help - either Chuck or a future reader.

Thanks,
Doug