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Email this7:55 am
April 6, 2013
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I'd go over CDIC limits (principal and accrued interest) if I knew that the financial institution had a credit rating of AA(low), for example. That means I would be taking a risk similar to that of placing money in a Province of Ontario bond.
The challenge with the smaller institutions, like Peoples Trust, is that many have not gone through the process of getting a rating. So, I don't know if I would be investing in something that is a AA(low) risk or a BBB risk. The risk is unknown.
I don't think it is a good habit to take on unknown risks that are avoidable.
Maybe risking the interest of 2.45% per annum of a five-year term deposit doesn't sound like much. But, over a five-year term, that works out to be about 12.8% of the original deposit. For a $100,000 deposit, that is $12,800 one is risking.
7:50 pm
December 23, 2011
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Koogie said
kanaka said
I am not here to agree or disagree with any ones comments. And I don't expect the latter for my comments.kanaka said When there is lots of competition out there for somewhat crappy rates why would you buy $100,000 in GICs at one FI and run the risk of loosing 5 years of interest? 5 years of interest you will never recoup.....and in hindsight you will say; why didn't I use some common sense?
If someone respectfully disagrees with you, please don't infer that they lack common sense.
If you can't see the irony in the above, I certainly can't help you.
In regards to my common sense approach to investing in a CDIC FI.
1. I did not quote your entry
2. I am not asking for help
3. I was commenting about the topic and not any specific individual.
4. My common sense remark was not directed at a specific individual and was assuming that is what a number of individuals may say if they lost all or some of their interest that accured over a number of years.
Please write your comments in the forum.