New 2.5% in saving accounts promo warning! | Page 2 | Tangerine Bank | Discussion forum

Loonie said

Yes, as Norman1 suggested, the 2.0% deal is on all savings deposit, not just new money. Unless you were planning on depositing a large amount at this time, you will likely have an average rate well below 2.0 if you have one of these fractional promos.
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Yes, which of the offers is better depends on how much new money one will be depositing.

For the 2½%-on-new-money offer, one would need more than $2.40 of new deposits (earning 2½%) for each $1 of existing deposits (earning 0.8%) to end up with more than 2% overall.

Loonie said
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Their process of awarding promos, however, leaves a lot to be desired, from the customer point of view. As someone noted, it's rather like buying a used car since they seem to have a 100% need to speak to a manager before they can agree to anything. If these offers are all decided by algorithms, which they surely must be, then the rate they are offering each person should be clearly stated on the profile to which CS agents have access. The business about having to speak to a supervisor is just smoke and mirrors or an uncharacteristic inefficiency. Running your bank like a car lot does not impress.

The offers may be partially determined by computer algorithms and but not fully.

Perhaps, for some customers, the computer algorithms narrow the offers down to a few offers instead of just one. The offers in the list with the higher rates may require manager approval, especially if it looks like the customer may bring in something like $400,000 that Tangerine would have to pay 2½% on.

In the case of the 2.5% offer, which is only on new money, they would have no way of knowing how much more money you are going to bring in, except to say that they would probably cap the offer at 500K regardless (I would have to check aagin to confirm that this is the ceiling on this offer, but I think so.)

I remain unconvinced that there is a legitimate reason for supervisory input, although there may be a manufactured one. Everything can be programmed, and they are an industry leader on the tech side. They've been making these kinds of offers for at least a year, so they should have the system worked out by now. I mean, do we really think a supervisor sits there and does calculations every time someone calls in asking for a better rate?

From what has been reported on this forum, it appears that every solitary offer, with the exception of those that have been emailed (which appears to be the minority by my rough calculation), requires supervisory approval.

Saver-Mom said

Norman, are you suggesting they do not want clients with large deposits?
If Tang shows no improvement on registered accounts I will move these out shortly.

I think large deposits are always welcome. It is more a question of how much at what rate.

I don't think Tangerine wishes to pay 2% or 2½% on any and all money that comes in. They probably want to limit how much and how fast they accept money at that interest rate so they can deploy it. Otherwise, Tangerine will have to park the money in treasury bills for around 0.4% or banker's acceptances around 0.8% while paying 2% or 2½% for the money.

As for the large deposits, if Tangerine ends up letting several $1,000 deposits too many before stopping sign ups to the offer, then it's only several thousand dollars over. In contrast, a several too many $400,000 deposits would be millions of dollars over.

To the extent that your analysis is correct, Norman, it would behoove everyone to call in daily until they get the deal they want rather than concluding that they should move their money elsewhere. Sooner or later they will hit the right moment. Rather like "spin the wheel" on a quiz show or contest. I guess it keeps 'em coming back, as Saver-Mom suggests, or they hope so. I kind of doubt it though as there is no indication that this is what they want us to do plus it takes up a lot of CS time.

Norman's analysis would also suggest that some of us have been very lucky, as we have never been refused (e.g. me and my spouse).

It may be that the combination of the algorithms based on one's accounts and the loan/deposit ratio on Tang's books leads to the decision.

Arguing against this would be the fact that these deals come out with regularity immediately after a previous one expires (at least the ones I have received do), resulting in quite a few successful phone calls within a short time; some people evidently do get the emails, which suggests Tang has planned and targetted the offers (although I have never waited for them); and the arbitrariness with which various people have been treated when calling in within the same time frame - some yes, some no.

It would seem that they want some of us all the time (those ones get emails); some of us most of the time (people like me who have been successful every time when we ask); and others inconsistently, for whom "it depends", perhaps on loan/deposit ratios but could also simply be a reflection of account activity.

I don't know much about the inner workings of the banking establishment but have read that they have other ways of making money off ours than simple loans, so that might be a factor as well.

I don't see how they could both always want very large deposits and also find them problematic if there were too many of them.

Saver-Mom, maybe your mum should try again before withdrawing the GIC. No harm in asking. If Norman's analysis is correct, you might get a different answer.

I just spoke to a service rep at Tangerine about this new offer. Since I did not get the email about it, he told me I am not eligible for the 2.5% offer (I guess they did not like the $250K I had with them before??). They did offer me 2% for six months. However, I asked them if accepting this 2% rate would then mean I could not accept a higher rate later if they come up with a better promo - and he said YES, it would preclude me from better offers later, up to the six months. It seems once you have accepted a promo offer, they make a note in your file and it prevents you from getting other offers until the current one expires. In that case, I told him I would not accept the 2% rate, and keep my money in other institutions at 1.75%, and wait for either Tangerine or PCF to come up with a better offer in the next few months.

Know when to hold them, know when to fold them.

rhvic, are you not concerned about rates going even lower in the next little while? I would be. You are betting on Tangerine making you a better offer in this time period. Seems unlikely to me. And, if they do, someone else probably will try to meet it.

If it were me, I would accept this offer, but feel free to move my money elsewhere if a better deal came from somewhere else. (That is in fact what I've done.)

A bird in the hand...

Ah, yes, there's Zag. Should be a good bet if they can control their computer programming.

Just curious, Brian. What would be people's reasons for not asking for a better rate? Don't they believe you?

I have the impression people may not be used to the idea that rates can be negotiated. And we must admit that this kind of repeating promo rate system is fairly new. Maybe they don't realize how much difference it can make - easily 1K on 100K / yr. I think most of us would not say no to 1K if we thought we could have it. Even 500 on 50K is still significant.

I think for $1,000 or $500 a year, people will act. But, for around $100 a year, I've seen people be indifferent.

I remember one friend who was paying around $10/month for an unlimited plan on her Royal Bank chequing account. She didn't seem interested in saving the $120/year, by seeing if PC Financial's chequing account (free transactions and free cheques) would suit her needs.