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Email this2:59 pm
November 4, 2014
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Kanaka and Loonie, I agree with the fact that their TFSA savings account rate of 3.00% was their best product and more flexible, liquid and accessible than TFSA GIC's plus they will likely loose alot of clients and accounts in the long run.
The only thing I can see possibly insulating them to a certain degree is if interest rates stay low on short term GIC, cashable GIC rates, redeemable GIC rates and TFSA savings account rates.
Well it has been almost 6 years so those that have their money for years were benefiting in such a low interest rate environment but things change as they do.
5:19 pm
August 28, 2013
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Even if they drop their TFSA to 2.5% or so, I am going to initiate transfer to both accounts on 31.12. For almost 6 years they had 3.00% and that brought few tax free bucks so lets not get greedy!
There is no better variable rate, period. I am not willing to put it into TFSA GIC as interest is low. I like their 2.45% for 15 months but unfortunately I already have Their 1 year GIC at 2.35%.
If people become upset with them lowering int.rate and start withdrawing $, that magic number of 200M (who came up with that number, anyway??? isn't that a banking secret or just clever guestimate?) will drop and they would have to get back to 3.00%. Maybe.
When TFSA was born, PC Fin had the best rate - for 1 month or so. I was inexperienced and I put $ into PC Fin TFSA. Then they dropped rate significantly and pissed me off so I withdrew money and put into regular hi-saving account. I calculated I will get more that way even paying tax on investment interest.
7:38 pm
February 17, 2013
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JustMe: I totally agree. my wifes' is locked into a 3.3% GIC for 5 years at CDF, so I want mine liquid. Like I said in an earlier post, show me something competitive that's totally liquid and I'll consider it. Nothing I see out there comes close, so I don't really see a mass withdrawal from PT from anybody that wants above average rates while keeping funds accessible. All I can say is thanx for the good rates so far. Glad I was able to cash in on it for the time I did.
7:54 am
November 4, 2014
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We used to feel the same way back in July-2007 when we could get 4.50% savings account rates at State Bank of India Canada and then gradually over the years dropped rates.
We did not like locking in our money for years as we have to do now.
When it is all said and done, they are one of the lowest paying only 1.10% and even their TFSA savings account rate is only 1.50%.
One thing that we understood and anyone can believe what they want, financial institutions know what people need and do with their savings, they are either putting it for liquidity, accessibility, flexibility or locked in for usually a higher rate for rate protection, income protection putting a floor on rates with little to no liquidity, accessibility, flexibility.
I can't see them paying on TFSA savings accounts or any variable accounts, the same or higher than 30 month, 40 month, 3, 4, 5 year GIC's, TFSA's, RRSP's, RRIF's etc. that will likely have higher rates because it is locked-in.
You have to remember that when Peoples Trust introduced their 3.00% savings account rate in 2009 and a few years after that, 5 year TFSA GIC's were higher anywhere from 3.35% like ICICI Bank of Canada to 3.75%, 5 year TFSA GIC at Duca Credit Union.
Since they know this and know how much TFSA deposits or any amount of deposits they have, the highest TFSA savings account rate payers can cut rates when the competition cuts them and are paying at most 2.00% unless transferring TFSA's to get 2.5% to 3.00% which has fees, hassles, lost interest due to that.
NorthernRaven, mentioned that Peoples Trust's TFSA savings, deposits are approaching 200 million dollars so maybe he or she can answer where he or she got that information from.
Peoples Trust is still the highest TFSA savings account rate out there but the question is will they be for 6 months, 1 year, 18 months etc. from now and will they introduce transfer fees or other fees for TFSA's and other registered accounts in the future?
We are just as frustrated and disappointed with falling interest rates, savings accounts, GIC's, RRSP's, TFSA's, RRIF, RESP's etc. than anyone else on this forum others out there.
8:09 am
November 4, 2014
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Well looking at TFSA savings, deposits 200 million dollars divided by 6 years equals 33.33 million dollars per year on average so assuming an average $2,700 per person TFSA contribution, this is about 12,346 TFSA accounts with them.
This is assuming also that they are making annual TFSA contributions at $2,700 per year on average for the last 6 years.
There maybe much less than 12,346 TFSA accounts with Peoples Trust. It could be as little as 5,000 to 6,700 clients using the same assumptions above if they are contributing close the to maximum annual TFSA contributions.
It does not seem unreasonable that Peoples Trust has 200 million dollars in TFSA savings, deposits over almost 6 years.
9:37 am
November 4, 2014
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Prospera Credit Union has a 4 moth non-redeemable 3.00% TFSA GIC which is a short term promo.
It is not liquid, accessible like TFSA savings account rates and you have to careful about any fees that may be applicable to TFSA's.
9:38 am
September 5, 2013
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Hi,
HAPPY HOLIDAY TO EVERYONE!
I would not worry about the possibility of changes of Peoples Trust TFSA rates. If the history is any guide, then they haven't move it last 5 years.
We can only make decision based on the existing environment, and no one can predict the future. The current environment is tricky. While USA is looking like raising rate in 2015, CA is another story. But CA is always follow US lead in the past, and I would expect our rate will trend a bit higher in 2015.
9:44 am
November 4, 2014
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Brimelychen, did you see what Comtech Credit Union did? It has now 5 year GIC rates at 2.35% cut by alot when I believe it was 3.00% or a little higher than that.
Canadian Western Bank and Canadian Direct Financial cut their TFSA savings account rate to 2.00% from 2.25% or 2.50%, I can't exactly remember but that was months ago.
Canada and U.S bond yields have gone up in the last 7 to 8 days but are from almost all time historic lows.
Happy Holidays and Happy New Year to everyone too!.
10:08 am
November 4, 2014
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Community Trust Company does not have 3.00% GIC, RRSP, RRIF rates anymore. I just checked now, http://www.communitytrust.ca/s.....-products/.
It is much lower at 2.40% now for 5 year GIC, RRSP, RRIF rates, not to mention all their 1-4 year rates as well..
5:42 am
August 4, 2010
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Federally chartered banks and trust companies have to provide the regulator (OSFI) with various monthly and quarterly reports. The monthly numbers includes total deposits broken down by registered and non-registered, individual/govt and demand/term. For Peoples, their October report put "Individual/Demand/Tax-sheltered" (which should be TFSA HISAs, but not GICs) at $183 million. I think "Individual" might include corporate deposits, but since I don't know of any corporate tax-sheltered category, and since Peoples doesn't offer an RRSP HISA and I don't know of any other related entity doing TFSA/RRSP demand accounts, my assumption is that $183 million is all in that 3% Peoples TFSA.
Here's a link to my earlier post showing the growth of this category over the last 3-4 years. 3% was a nice advertising move when they were starting, but with that much money in, reducing the rate to 2.5% saves them about $1 million a year, probably doesn't lose many existing customers (where can you get a similar liquid rate?), and still is fairly attractive to new money.
8:32 am
October 21, 2013
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Bearing in mind what NorthernRaven has revealed, it probably isn't good practice for Peoples to have such a large percentage of their deposits in savings accounts, TFSA or not.
But by the same token, they will have to move cautiously in reducing rates, lest depositors bolt. With such a high percentage in savings accounts, Peoples wouldn't be able to afford this.
I hope they know what they're doing.
Maybe they are getting ready for being bought out.
Being in a speculative mood, it seems to me that one move for them might be to offer superior rates for TFSA GICs, hoping to entice people to move from savings to GICs. Some people are invested in the TFSA savings acct simply because of the high return and would be comfortable in a GiC probably. That way, they would not lose the deposit and would have a more predictable base for their loans.
4:32 pm
November 4, 2014
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NorthernRaven, thanks for the info about what total amount of deposits possibly Peoples Trust has in TFSA savings accounts.
The bottom line is that they have received alot of money in 6 years and now they it looks like they are changing their strategy.
We will have to wait and see what happens in the new year but they have to be careful because their type of clients are there because of this specific 3.00% TFSA savings account rate and if they push too far and don't come up with an alternative that will satisfy their clients and new clients, it can really backfire.
This is why it is always good when new banks, trust companies, credit unions give us more options and better rates. We need to see more of it because things are changing everyday, good and bad for us.
4:55 pm
January 3, 2009
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Greg Franklin said
they have to be careful because their type of clients are there because of this specific 3.00% TFSA savings account rate and if they push too far and don't come up with an alternative that will satisfy their clients and new clients, it can really backfire.
Exactly right. I can easily get 2.75% for a 5 year GIC with an existing account I have elsewhere. If they don't provide something close to that, I'll be moving multiple TFSA accounts funds out and closing them.
In an era where only new customers are rewarded; imo; loyalty is dead.
Some people are so brainwashed to such a degree or making posts on behalf of companies, that I've read posts of people saying banks need to lower rates and charge fees to reward loyal customers. lol! 
11:54 am
November 4, 2014
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Voodoo22, I can understand your frustration about how lower rates is supposed to be always a good thing and don't get me started on fees that are excessive compared to what interest they paid us.
You can match your 3.00% TFSA savings account rate at Peoples Trust if your goal is to lock in that rate and don't worry about liquidity, accessible in 5 years. It seems you can do that by what you posted above.
State Bank of India Canada, ICICI Bank of Canada has multiple locations across Canada and has currently 3.00% 5 year TFSA GIC's, 3.00% RRSP GIC's. They are CDIC insured just like deposits at Peoples Trust.
There are others that are paying as high as 3.10% for 5 year money but are credit unions that are not CDIC insured and may not be available to everyone in Canada. You can see this and more information at other related posts on this forum from the last few weeks or so.
Take care and shopping around using competition and locking in rates maybe a good idea if you are trying to put a floor, minimum on your interest income and compound interest rate over the next 5 years or whatever term you choose.
12:32 pm
August 4, 2010
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voodoo22 said
Exactly right. I can easily get 2.75% for a 5 year GIC with an existing account I have elsewhere. If they don't provide something close to that, I'll be moving multiple TFSA accounts funds out and closing them.
In an era where only new customers are rewarded; imo; loyalty is dead.
Some people are so brainwashed to such a degree or making posts on behalf of companies, that I've read posts of people saying banks need to lower rates and charge fees to reward loyal customers.
While "loyalty" isn't really something that goes with interest rates, this is particularly silly. Existing PT TFSA customers have been getting getting a well above-market promotional demand rate of 3% for years. It is simple math that at some point the growth of TFSA deposits was going to make the cost unfeasible in relation to the new business it brings in. At 2.5% it is still higher than any permanent TFSA demand option out there, I think, and as far as I know there are no plans to treat new and existing customers differently? If 25 basis points is worth the tradeoff of a 5-year lock-in, fine, but that is apples and oranges; also, one is hardly showing loyal to PT, are they... 
12:59 pm
November 4, 2014
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NorthernRaven, I think Voodoo22 is just tired of getting less and less interest compared to years back when rates were 4.00%, 4.50%+ while waiting and waiting.
It does not seem that his or her account was solely for liquidity purposes and now is trying to make sure that he or she can get close to or match this 3.00% TFSA rate that he or she has enjoyed for many years.
This is just my understanding but Voodoo22 has to clarify this as I do not know what is Voodoo22's intentions with his or her TFSA money at Peoples Trust is.
3:34 pm
January 3, 2009
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@Northern Raven, (please don't call peoples ideas silly, that's rude in my book and I fail to see what you have to gain from it) what I was eluding to in regards to rewards wasn't directed at PT. It's the general concept of new customers get promo's etc, but remaining customers get nothing. An example is in the internet, tv phone business. I know some people who switch their providers every 6 months to get the promos for new customers. I don't and watch my bill slowly going up and feel like a chump. That's one example. Try to think about the last time you were rewarded by a service provider for loyalty. I personally cannot remember.
Also, I do not need our TFSA's to be liquid. It is a nice option to have one that is liquid and at a competitive rate. I'm only letting it be know to PT that they will lose customers if they lower and more customers with various products through them the more they lower.
I also don't get your last statement about me not showing loyalty to PT. It is never the customers job to show loyalty, it is the service providers job to earn it. If a service provider cannot give a customer a reason to stay, why would a customer show 'loyalty' and stay? I don't get it. I'm not wired that way. It doesn't have to be best rate, but in this example the two things PT is providing me is a competitive rate and liquidity. If they no longer provide a competitive rate, I do not value the liquidity enough to remain a customer and most of the people I know are in that same boat.
I don't know if that makes more sense, but it is like Greg says. In a time of dwindling returns, I'm not willing to lose more returns to have my TFSA's remain liquid.
Thank you Greg for taking the time to present your views. I also find it enjoyable to read other peoples thought out opinions.
4:42 pm
November 4, 2014
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Voodoo22, I had a good gut feeling, idea about your recent posts that you were more concerned about the actual TFSA rate, GIC rate and other savings rates, GIC rates etc. in general being competitive enough to stay with a particular financial institution. Liquidity and accessible is not your primary concern.
I understand how it gets frustrating with these interest rate games they play for new money and new customers only. There are not many places where you can find 3.00% or more these days anymore.
We keep hoping and waiting for at least 4% and higher savings, GIC's, RRSP, RRIF, RESP, TFSA rates but they never come.
Take care and I agree that a financial institution, company, business must earn a customer's loyalty rather than trying to get us stuck with them by cutting interest rates, imposing new and increasing fees, restricting competition, lengthy transfer periods etc.
9:11 am
August 4, 2010
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I used "silly" to express light-hearted irritation at what appeared to be a confusion of personal circumstance with the general marketplace. Please feel free to mentally replace "silly" with a more appropriate or less offensive word in the following musings:
If someone values a demand account vs. a 5-year lock-in GIC at 25 basis points or less, that is not necessarily silly.
However, assuming that this duration-insensitivity describes a significant percentage of PT's TFSA HISA customers is probably silly. Thinking that PT should contort otherwise sensible business decisions so as not to somehow offend the delicate sensibilities of this unknown fraction would be seem to be silly.
As there is no other institution that has offered anything near 3% in a TFSA demand account for anything more than short promotional periods, thinking that the market feels that offering 5-year GIC rates to TFSA demand customers is a sustainable practice, would be silly.
Thinking that PT is allowed to provide what was essentially an extremely high promotional rate, but continuously for something like four years, yet never be able to rein this in as time and circumstances change, without providing grounds for offence by their customers, is silly.
If indeed PT is lowering their TFSA rate, this is completely unsurprising as their TFSA totals grew. Paying a significant premium on relatively small amounts is a promotional expense, paying the premium on much larger amounts eventually becomes, uh, silly. The one thing that would be questionable is timing a TFSA reduction so people miss the withdrawal window at the end of the year. But since PT doesn't charge a transfer-out fee, that isn't really an issue. If they were to introduce a transfer fee along with a Q1 rate reduction, that would be worth pouring consumer scorn on them for.
10:19 am
November 4, 2014
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The bottom line is, if you think that variable accounts, in this case which are TFSA savings accounts will keep their rates high or higher relative to longer term GIC's, 4 to 5 years is an appropriate comparison then think again.
Liquid, accessible accounts except for cashable GIC's and redeemable GIC's that have fixed rates for 1 year are the only type of accounts that are 1.75% to 2.00% these days that compare to other savings accounts that are variable and rates can change anytime.
I agree that 3.00% TFSA savings account rates are not sustainable in a low to lower interest rate world.
Even if rates were going higher say TFSA GIC's to 3.75% to 4.00% etc. they may have left their TFSA savings account rate at 3.00% but people would still be earning less comparatively.
At least their TFSA savings rate would probably of stayed the same. Once financial institutions get a certain amount of money in a specific area especially in registered accounts which are more difficult to transfer or withdraw money, they got most smaller depositors where they want them, mostly staying put.
I don't see interest rates in general not including promotions and other specific accounts changing much in 2015 but who knows for sure right.
The trend over the last 7 years for savers, fixed rate investors is not our friend for sure.
Please write your comments in the forum.