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Email this6:39 pm
July 31, 2013
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PC Financial which is President's Choice Financial is paying extremely less on their GIC rates for direct PC Financial customers. PC Financial is paying 2.00% for their 4 year GIC and 2.25% for their 5 year GIC. If you go through a GIC broker or a financial or investment adviser PC Bank which is President's Choice Bank is paying 2.42% for a 4 year GIC and 2.72% for a 5 year GIC.
PC Financial and PC Bank are the same company owned by Loblaws. The biggest difference is the 5 year GIC with 47 basis points less per year or 17.279% less interest income per year. This is simple interest but with compound interest the loss is multiplied.
The difference after 5 years compounded is 2.59246% or 259.246 basis points. This is almost 14 months of lost interest, 13.8265 months to be exact using the 2.25% 5 year GIC rate for direct clients of PC Financial. If you have $40,000 to invest for example it is $1,036.99 total lost interest over the 5 years.
People have to be wary and shop around through many avenues by using GIC brokers, directly dealing with financial institutions that pay the highest GIC rates and other deposit, investment rates. I found this information by simply typing in GIC rates for August-22-2013 using Google. The internet is a good tool for comparison shopping for 20, 30 etc. financial institutions.
11:50 am
December 12, 2009
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Thanks for sharing this interesting information, SD2013. I hadn't realized "President's Choice Financial" (collectively as "PC Financial" and "President's Choice Bank") was in the deposit broker channel. I knew they were in the mortgage broker channel, to be sure, but hadn't realized they competed in a similar channel on savings (deposits).
I would like to clarify one difference between the "PC Financial" GIC rates and "PC Bank" GIC rates that you said. While I don't question the accuracy of the rates themselves (you seem to have really done your homework), if indeed "PC Bank" is issuing GIC rates only through the deposit broker channel whereas "PC Financial" is issuing GIC rates only through the direct banking retail customer channel, then that is indeed very interesting because "President's Choice Bank" (which I can only assume is what you mean by "PC Bank") is wholly-owned by Loblaw Companies Ltd. and likely used to partially fund their wholly-owned PC Financial MasterCard operations, which is also issued by President's Choice Bank. "PC Financial", on the other hand, is a trademark owned by Loblaw Companies Ltd. but used under licence by the direct banking division of CIBC which provides day-to-day, credit, investment and wealth product solutions under the "PC Financial" brand. So effectively, what Loblaw is saying, "OK, you can be 'PC Financial' in these areas and via these channels but we will be retain our right to be in the credit card and deposit funding spaces via the deposit broker channel".
Very interesting!! 
Cheers,
Doug
1:49 pm
July 31, 2013
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If you read my other posts Scotia bank, Royal Bank, BMO, National Bank all have lower direct client GIC rates and higher GIC rates through GIC brokers, financial, investment advisers. I knew back in 2007 TD Canada Trust did the same but I am not sure if they are doing the same today.
Talking about GIC brokers, financial advisers, investments advisers I just found out today that Home Trust Company has a HISA higher interest savings account at 1.40% with an initial $1,000 investment and then you can add to it but you have to go through a registered GIC broker, financial, investment adviser.
It has the same $100,000 CDIC deposit insurance, protection and is available for non-registered, TFSA's, RRSP's, RESP's, RRIF's.
8:45 pm
August 4, 2010
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You may want to check this other thread for more about the difference between PC Bank and PC Financial, and GICs. The GICs people see on the PC Financial website would appear to be CIBC offerings (like their savings/chequing), and have nothing to do with PC Bank. PC Bank does have $275 million in fixed term deposits (OSFI data), which is presumably includes the stuff issued through GIC brokers and other non-retail channels. As Doug notes, they are different GIC products, not the same GICs with differing rates.
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