Further Interest rate decreases | Oaken Financial | Discussion forum

Another drop in almost all rates on May 15th. e.g. This is the fourth 1 yr GIC rate decrease in 25 days!

Please note that effective Friday, May 15, 2020, we will be decreasing the interest rate of our 1-year cashable GIC, as well as our short and longer-term GIC rates (registered and non-registered) as noted below. Our 4 and 5-year GIC rates remain unchanged.

Short-term GICs
• 30-59 Days – 1.85% (currently 2.00%)
• 60-89 Days – 1.85% (currently 2.00%)
• 90-119 Days – 1.85% (currently 2.05%)
• 120-179 Days – 1.85% (currently 2.05%)
• 180-269 Days – 1.85% (currently 2.05%)
• 270-364 Days – 1.85% (currently 2.05%)

Cashable GICs
• 1 Year Cashable After 30 Days – 1.80% (currently 2.00%)
• 1 Year Cashable After 90 Days – 1.85% (currently 2.05%)

Long-term GICs
• 1 Year – 2.10% (currently 2.15%)
• 18 Months – 2.15% (currently 2.20%)
• 2 Years – 2.15% (currently 2.20%)
• 3 Years – 2.25% (currently 2.30%)

All other Oaken rates will remain unchanged.

GR said
WOW! Another big drop next week on gics and savings accounts!

Please note that effective Tuesday, June 2, 2020, we will be decreasing the interest rates for the following terms. Our 5-year GIC rate remains unchanged.

Long-term GICs (registered and non-registered)
• 1 Year – 1.85% (currently 2.10%)
• 18 Months – 1.90% (currently 2.15%)
• 2 Years – 1.95% (currently 2.15%)
• 3 Years – 2.05% (currently 2.25%)
• 4 Years – 2.15% (currently 2.30%)

Short-term GICs
• 30-59 Days – 1.50% (currently 1.85%)
• 60-89 Days – 1.60% (currently 1.85%)
• 90-119 Days – 1.65% (currently 1.85%)
• 120-179 Days – 1.65% (currently 1.85%)
• 180-269 Days – 1.65% (currently 1.85%)
• 270-364 Days – 1.65% (currently 1.85%)

Cashable GICs
• 1 Year Cashable After 30 Days – 1.00% (currently 1.80%)
• 1 Year Cashable After 90 Days – 1.00% (currently 1.85%)

Savings Account Rate:
• 1.65% (currently 2.00%)  

I nailed it! Once a major virtual bank or credit union "broke the ice," on the HISAs, it will be a matter of mere weeks before the others (the Manitoba CUs and EQ Bank, in this case) all drop below 2%. Before July 2020, I predict that, with the exceptions of LBC Digital and Motive Financial, no other financial institution will offer a regular, posted rate of interest above 1.75%. Hubert and Achieva will likely be the next two to drop, followed by the others in various orders. By year end, the top HISA rate available could fall to 1.50-1.75%, and we'll likely see the top 5-year GIC (non-promo) rate being 2.25%.

I do note that Peter has updated the Oaken HISA rate already, even though it's not effective until June 2nd, 2020 yet the GIC rates for Oaken have not been updated. In my view, we should we be consistent, and either update the HISA and GIC rates upon the date of the announcement or the effective date of the new rate. We shouldn't do one for HISAs and one for GICs otherwise it's confusing, at best, and potentially misleading, at worst. 🙁

Cheers,
Doug

Peter said
The savings account rate has been immediately updated on the chart because for money deposited today, that is the most likely rate that you will be earning for the time your money is in the account (subject to future, unannounced changes of course).

The GIC rates are automatically updated every day by a script, but the main reason why they are not updated until the effective date is because if you open the GIC today, that rate is guaranteed for the term.  

Ah, didn't realize you'd implemented a script to automate, or semi-automate, the GIC rate changes. You used to do it manually in the early days, though, right?

Cheers,
Doug