Targeted offer - 5.70% on non-registered accounts from Aug 10 till Nov 30, 2023 | Tangerine Bank | Discussion forum

Whether you transfer your balance or not is NOT a trigger for new offer.
After playing this game for years, only 2 triggers seem to be it:

1) Dont call them for promo, cuz what they offer will be $hit. Even if they offer you any half decent offer, DONT accept it
2) If you dont get it this round, you WILL receive it next round.

Either way keep your balance at a minimum when there is NO promo on your account.

One does need to indicate one is interested in participating by calling in at least once and transfering funds out when there is no offer.

However, Tangerine uses some randomness in assigning the offers. I presume that's because the marketing budget is not large enough to give every interested client an offer.

So, interested clients are not guaranteed to receive an offer.

moveyourmoney said
I don’t understand Tang’s thinking…obviously, they offer these promos to attract investment. However, they often let existing clients walk away where all they would have to do is take care of them with competitive rates that are much less than this 5.7% offer. Do they think that people will stick around for the niblet base rates once the offer expires. …

Tangerine Bank isn't really interested in attracting large amounts of savings account deposits that cost them 5% per annum or more. Savings account deposits that can be withdrawn any time are not that useful. A bank can't lend such deposits out, for example, as five-year commercial mortgages. Doing so would set the bank up for a liquidity failure.

If the client wishes to continue to be paid 5%+ for their savings deposits after the offer ends, then it is not an issue for the client to transfer the funds elsewhere.

These non-public promotions are marketing exercises to generate exposure and attention. Their goal is not to raise savings account deposits that cost significantly more than the 1% per annum regular rate for such deposits.

Tangerine seems to do an awful lot of these promotions. Both myself and my wife separately received these offers which have been extended. They are bringing in a LOT of cash. I have no idea how much money they pay out in interest in total beyond wild assumptions but the cost must be astronomical if its a “secret” marketing exercise and the money isn’t working. Something does not compute.

Besides, the cost of funds is known to be much higher for smaller banks than it is for the big 5 which profit from inertia, so 1% isn’t going to bring anything at all to Tangerine. Even the big 5 pay well over 4% for cash which can be withdrawn at moment’s notice. I am guessing their stress test models assume that HISA money isn’t going to flee all at once so they can be put to use.

To think that Tang isn’t really interested in hisa deposits doesn’t make sense with how they are trying to attract new money with higher rate offerings. The big banks want that money too so even they are offering promos. But they rely on bricks and mortar as security over the online FIs. In fact, most big banks are covering both bases to raise capital.
The money in prime linked cashable GICs is often accessible anytime…but just avoid pulling out within the first month. (No interest paid) Essentially, these types of investments aren’t much of a stretch from a hisa. When a big bank is offering over 5% (albeit on higher amounts) with that kind of flexibility to the client, they want the money.
I think of banking in simple terms because that’s about my skill level. Banks look for good opportunities to lend money. When a bunch of those opportunities are available, they need to raise money to cover it. The spread between servicing my deposits and their lending rate returns is their profit. So Tang is willing to tighten the spread because they and BNS have lending opportunities. If they don’t get enough deposits, they have to go to their competition to borrow…and that’s going to cost them more than 5.7%. That’s also why Motive seemed to be out of place when they offered 4.1% as a base rate way ahead of the others. But the reason is, they need the money for good lending opportunities and the alternative of borrowing money from the big guys (or other FIs with capital) is way more expensive than 4.1%. Tang could keep my wife happy at 5.25% for as long as the boc rates are at current level. Their algorithm is blocking sensible moves to secure cash. And if the lending opportunities weren’t there, the promos would disappear.

COIN said
A while back (maybe a year) I heard that the Big Banks had more cash than they could lend out. Has this changed? Is there greater loan demand now?  

I am not an insider but various money supply measures indicate very low growth, untypical of Canada. As fewer new dollars are splashing in the economy, banks still have plans to meet and have to fight harder for attracting rarer CADs.

This is good news for lowering the inflation too, as all businesses have to fight a bit harder for CADs, not just the banks.

moveyourmoney said
… If they don’t get enough deposits, they have to go to their competition to borrow…and that’s going to cost them more than 5.7%. …

No, it doesn't. The current overnight lending rate between banks is 5¼% right now. The current rate for 30-day and 90-day bankers' acceptances is around 5.1%.

… Tang could keep my wife happy at 5.25% for as long as the boc rates are at current level. Their algorithm is blocking sensible moves to secure cash. And if the lending opportunities weren’t there, the promos would disappear.

Why would Tangerine Bank pay anyone 5.25% to 5.70% for savings account deposits when they can issue 30-day and 90-day bankers' acceptances to investors that only cost them 5.1% per annum? Furthermore, the acceptances are locked in until maturity, don't have CDIC deposit insurance premimus, and don't have any account servicing costs.

As I said previously, the offers are marketing promotions and not exercises to raise money to lend out. Banks don't raise deposits for lending through savings accounts because most loans are not repayable on demand to match the lack of commitment of savings account deposits.

moveyourmoney said
To think that Tang isn’t really interested in hisa deposits doesn’t make sense with how they are trying to attract new money with higher rate offerings. The big banks want that money too so even they are offering promos. But they rely on bricks and mortar as security over the online FIs. In fact, most big banks are covering both bases to raise capital.
The money in prime linked cashable GICs is often accessible anytime…but just avoid pulling out within the first month. (No interest paid) Essentially, these types of investments aren’t much of a stretch from a hisa. When a big bank is offering over 5% (albeit on higher amounts) with that kind of flexibility to the client, they want the money.
I think of banking in simple terms because that’s about my skill level. Banks look for good opportunities to lend money. When a bunch of those opportunities are available, they need to raise money to cover it. The spread between servicing my deposits and their lending rate returns is their profit. So Tang is willing to tighten the spread because they and BNS have lending opportunities. If they don’t get enough deposits, they have to go to their competition to borrow…and that’s going to cost them more than 5.7%. That’s also why Motive seemed to be out of place when they offered 4.1% as a base rate way ahead of the others. But the reason is, they need the money for good lending opportunities and the alternative of borrowing money from the big guys (or other FIs with capital) is way more expensive than 4.1%. Tang could keep my wife happy at 5.25% for as long as the boc rates are at current level. Their algorithm is blocking sensible moves to secure cash. And if the lending opportunities weren’t there, the promos would disappear.  

Tangerine runs their promo rate just like a telecom runs amazing promo rates to attract new customers. Its coming out from their annual marketing budget. Even if they can keep 20% of the deposit after the promotion ends, they will be better off in the long term with another customer under their belt for cross product selling.
It has nothing to do with lending opportunities or whats not. Need to think in terms of big corporation running a $$$$$$ business, not a small business. The forum members here are more rate chasers and are the minority !
The younger generation are totally into cash ETFs and the like, they have no interest to chase HISA esp when there is no rate advantage.