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Email this1:36 pm
September 6, 2016
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Can someone show the math as to how exactly these two offers compare? Assume $100 put in the account (nothing added or removed until Jan).
(from a earlier post)
-tangerine 2% with full interest paid monthly and then compounded through the 4 months
-pcf 2.25% with only the regular 0.08% interest paid monthly, and bonus interest (2.17%) paid as lump sum in January 2017 (no compounding on the bonus interest for the 4 months)
Thanks!
2:56 pm
February 24, 2015
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save said
Can someone show the math as to how exactly these two offers compare? Assume $100 put in the account (nothing added or removed until Jan).
(from a earlier post)
-tangerine 2% with full interest paid monthly and then compounded through the 4 months
-pcf 2.25% with only the regular 0.08% interest paid monthly, and bonus interest (2.17%) paid as lump sum in January 2017 (no compounding on the bonus interest for the 4 months)Thanks!
The PCF offer is about 12% better. Do you really want to see the math?
4:10 pm
May 28, 2013
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Actually PCF's base rate is 0.8%, not 0.08% as some are stating (they are not one of the big banks which offer insulting rates as the norm!). The bonus would then be 1.45%.
5:23 pm
June 29, 2013
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rhvic said
Actually PCF's base rate is 0.8%, not 0.08% as some are stating (they are not one of the big banks which offer insulting rates as the norm!). The bonus would then be 1.45%.
- You are correct that Tangerine normal savings interest rate is .8%.
- You are not entirely correct re big banks rates (I have personally used the following particularly when no other promos available)
- Scotia Momentum pays 1.5% on 5K minimum for a 3 month period
- Scotia Accelerator pays .8% between 5K and 24,999K and higher rates for amounts over 24,999 on the whole balance (not locked in)
5:38 pm
February 24, 2015
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rhvic said
Actually PCF's base rate is 0.8%, not 0.08% as some are stating (they are not one of the big banks which offer insulting rates as the norm!). The bonus would then be 1.45%.
Yes, in my calculations I used 0.8% compounded monthly for both Tangerine and PCF. Then for Tangerine I assumed that the 1.20% bonus interest was also paid monthly, but then compounded at 0.8% as in the past (not 1.20% because it was not considered a new deposit).
5:45 pm
July 5, 2016
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I don't currently have a savings account with PCF (checking only). Would this promo work if I opened a new account? I plan to keep my money with Tangerine until the end of September for 3.1%
8:30 pm
January 30, 2009
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Hi Cashen, welcome to the forum.
Yes, the promotion applies to new accounts but it does not apply to the chequing account ("No Fee Bank Account"). This is a reminder to everyone else as well - you need to move the money to the "Interest Plus" or "Interest First" savings accounts or you won't receive the promotional interest.
Cashen, you mention you already had a chequing account with PCF. In this case, any funds in the account as of August 31 won't earn the promotional interest. Also, keep in mind there is a delay time to transfer from the savings to the chequing which could be important if you need access to the funds (remember you can't write cheques on the savings account).
4:43 am
June 29, 2013
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2of3aintbad said
The PCF offer is about 12% better. Do you really want to see the math?
Sure if you have your math or detail that shows it is 12% better, could you attach? I would be interested to see. Thanks.
6:57 am
September 6, 2016
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Yes please. I would like to see how PCF offer is better than Tangerine's. I am trying to decide between 2.25% at PCF and 2% at Tangerine (which they agreed to let me keep until end of the year). Thanks!
7:51 am
October 18, 2014
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From today till December 31, assuming the banks deal with the leap year similarly (366 instead of 365).
2.25% compounding only the 0.8% and bonus paid in January:
10,000.00 x 0.008 / 366 x 24 = 5.25
10,005.25 x 0.008 / 366 x 31 = 6.78
10,012.03 x 0.008 / 366 x 30 = 6.57
10,018.60 x 0.008 / 366 x 31 = 6.79
Bonus Interest:
10,000.00 x 0.0145 / 366 x 116 = 45.96
Total Interest paid = 71.35
For giggles, let's look at how little the compounding of the bonus interest would add if bonus interest paid monthly:
10,000.00 x 0.0225 / 366 x 24 = 14.75
10,014.75 x 0.0225 / 366 x 31 = 19.09
10,033.84 x 0.0225 / 366 x 30 = 18.51
10,052.35 x 0.0225 / 366 x 31 = 19.16
Total Interest paid = 71.51 (a whopping 0.16 on 10,000 deposit)
Now for 2% compounded interest:
10,000.00 x 0.02 / 366 x 24 = 13.11
10,013.11 x 0.02 / 366 x 31 = 16.96
10,030.07 x 0.02 / 366 x 30 = 16.44
10,046.51 x 0.02 / 366 x 31 = 17.02
Total Interest paid = 63.53
I did this real quick and will double check my math later today...but I think this shows that short term compounding of interest is not that interesting.
8:21 am
October 13, 2011
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save said
Yes please. I would like to see how PCF offer is better than Tangerine's. I am trying to decide between 2.25% at PCF and 2% at Tangerine (which they agreed to let me keep until end of the year). Thanks!
I can do it simpler..
2.25% divided by 2% is 1.125, or exactly 12.5% better.
This is true because both the compounded 2% rate and the non-compounded 2.25% are annualized rates.
Which is to say the 2% that pays monthly does not pay 2% divided by 12 months (or 0.1666) each month; it pays less so that compounded all together at the end of a full year it would add up to 2%, including the compounding.
I've done the math on a previous PCF promo (in my chequing acct) during which there were a number of deposits and withdrawals during the promo period, and the annualized rate worked out to exactly as advertised, to the penny.
This means when I compare an annualized 2% that is compounded monthly to an annualized 2.25% that pays at the end of the promo period, I'm getting exactly 0.25% more at the end of the day with the second one.
Compounding is a non-issue as it turns out.
I've posted my math on another forum, (CMF) but I'm not sure I want to dig through the archives long enough to find it at this point in time.
8:36 am
October 18, 2014
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Pincer...
I'm not one to usually type out my disagreements but for people reading and learning from this forum I feel I need to correct your comments. I have many bank accounts and all of them pay interest monthly using the formula I indicated above and not any lower calculation that adds up to their advertised rate at the end of a given year. Perhaps some GIC's do that, but not any bank accounts that I've ever had with PCF, Tangerine, any of the 5 big banks or Manitoba Credit Unions.
8:44 am
January 20, 2016
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2of3aintbad said
Then for Tangerine, I assumed that the 1.20% bonus interest was also paid monthly, but then compounded at 0.8% as in the past (not 1.20% because it was not considered a new deposit).
Tangerine is paying the bonus interest for all your balance after that date... I asked them because they are depositing in the same account my cash back generated by their Credit Card!
8:51 am
October 13, 2011
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Jets, you could be right, if so I'll ammend my post.
I'll have to go through the numbers on one of my Tangerine promos to be sure, this could take some time, probably not today, stay tuned.
I can't imagine them paying more than advertised though, and if it's an annualized rate advertised, that's what you'd be getting.
10:12 am
July 15, 2014
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To further complicate (or clarify) the issue, because the PCF bonus interest is paid in 2017, income tax is deferred for a full year. This will more than favourably offset any compounding interest effect.
10:41 am
January 20, 2016
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rqs said
To further complicate (or clarify) the issue, because the PCF bonus interest is paid in 2017, income tax is deferred for a full year. This will more than favourably offset any compounding interest effect.
Actually, I wanted to mention it but you are faster than me 
I would add that Tangerine is also accepting the TFSA accounts and PC is not!
1:16 pm
October 13, 2011
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rqs said
To further complicate (or clarify) the issue, because the PCF bonus interest is paid in 2017, income tax is deferred for a full year. This will more than favourably offset any compounding interest effect.
^ That was an attractive component of this particular deal to me as well.
Deferring the bulk of interest on the next 3 months into the 2017 tax year works for me
1:31 pm
October 21, 2013
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for what it's worth, the one-year GICs at Hubert, which pay out every 3 months, actually bring in .02 more than advertised, or at least they did when the posted rate was 2.35. It came out to 2.37 if you left it in for the whole year because of quarterly compounding. I never understood why they didn't attempt to advertise it that way.
2:34 pm
February 24, 2015
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save said
Yes please. I would like to see how PCF offer is better than Tangerine's. I am trying to decide between 2.25% at PCF and 2% at Tangerine (which they agreed to let me keep until end of the year). Thanks!
Tangerine:
0.80% 1.20% #days
100,000.00 2.192 3.288 (daily)
100,136.99 54.79 82.19 25 Sept
100,306.94 68.04 101.92 31 Oct
100,471.53 65.96 98.63 30 Nov
100,641.71 68.27 101.92 31 Dec
A later post indicates that the bonus interest (1.20%) will also be compounded at 1.20%, which is not what happened in the past. If you assume that, you will get a different total.
PCF will give the same 0.8% compounded monthly, total $257.05 plus $100,000 x 1.45% x 117/365 = $464.79 bonus interest. Total interest = $257.05+$464.79 = $721.84 which is 12.48% higher than $641.71
Added: sorry about the format, I copied my spreadsheet for Tangerine and it was reformatted after posting.
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