Welll that didn't take long | Tangerine Bank | Discussion forum

I bought 6 mo GIC and 1 year TFSA GIC at 2.8%. A year from now I might be jealous of those who signed for 5 year GIC at 3.2%. Who knows.

Anyway, thanks, Tangerine. You offered a great deal in these times, and for every account holder, even if it didn't last long.

Meanwhile, the "special offer" I've got at 2.75% for new money in Tang Savings till June 30th still stays. I think I am going to refill my Tangerine Savings account, I emptied it moving money to GICs. 3 more months is better than nothing, literally nothing, in interest on regular savings we are heading to.

Dean said
We all knew it wouldn't last long, but I figured (& hoped) it might last up to a month. Instead, it only lasted 7 days ❗ LOL

Congrats to those who made it in, under the wire.  

For those with zero risk tolerance, yes. For those with even modest risk tolerance, the volatility in the equity markets present once-in-a-decade-or-more buying opportunities.

In any case, I'm not surprised by the volatility in GIC pricing. I expect to see large 50-100 bps swings, up or down, over the next 2-3 months. Pricing will change rapidly. This is because, like fixed-rate mortgages, banks seek to match their funding liabilities with their funded assets in terms of maturities. As well, the majority of the banks' funding costs are priced through the bond markets, which have been volatile of late due, mainly, to lack of liquidity. With central banks stepping in as large-scale buyers of government and even some corporate bonds (expect the BoC to announce it is entered the corporate bond market April 15th, based on Sr. Deputy Governor Wilkins' recent remarks and because of the coordinated nature of their existing actions relative to other central banks), liquidity pressures have eased up, thereby meaning banks have less need to rely on the GIC markets.

So, near-term, expect price volatility in the GIC market for the next 2-3 months.

On HISAs, we still haven't seen the full effect of the BoC rate drops, so expect a further 50-100 bps decline over the same time period.

Cheers,
Doug

Dean said

Yes ... it's "Bargain Basement Day at the Bay" in the stock market ❗

I'm cash (& cash equivalent) heavy in my investment accounts right now.

It's time to start buying into those beaten-down, dividend-paying Blue Chip Stocks.  

Me too. Yeah, you can always average in as I do think there will be at least one more bottoming, if we've even hit bottom. There could be more than two "bottoms." I heard an interesting statistic, believe it was from TD Securities equity research team, that in every single bear market, there has always been more than one leg down. 🙂

In such a case, the much-hyped "V-shaped recovery," at least in terms of the stock market is concerned, is actually more like a "W+ -shaped recovery". 😉

Economically speaking, I am increasingly thinking it'll be an L-shaped recovery or, best case, a very wide-assed U-shaped recovery. That is, the bottom in the U will be disproportionally large, like this,

|_____________________|
|_____________________|
|_____________________|
|_____________________|
\____________________/

Cheers,
Doug

savemoresaveoften said
Thats a pretty shit move by Tangerine to change the rate by this magnitude on the way up and then straight down. Their products department watched too much of the Dow movement these days....  

Not at all. There's virtually no correlation between GIC pricing and the stock market. Like I said at post # 7, it's almost entirely dependent on the bond market moves. The BoC's stepping in to buy $5 billion CAD in government and government-backed bonds and other debt instruments per week, to facilitate liquidity, had much more of an impact on the rate dropping. It may still decline further, particularly if liquidity further improves. 🙂

Don't sit on your GIC rate decision these days in this environment. If you're sure you want to lock in your funds in cash, then lock it in. Don't hum and haw. Pick your maturity and FI, and pull the "trigger." As well, FIs may be less inclined to do rate holds in the medium-term so, unless you already have accounts opened with an FI, this environment will be less conducive for rate shopping and transfers.

Also, it's worth noting the product team has little decision in terms of rates; that decision is usually handled by the Treasury department. When Peter Aceto was Tangerine's CEO, he blogged that he personally reviewed and approved all rates, so it's possible CEO Gillian Riley still has final sign-off on all rate decisions.

Cheers,
Doug

The 1-year 2.8% GIC rate was available to everyone.

Bill said
The 1-year 2.8% GIC rate was available to everyone.  

As was the five year 3.2% rate. Not a lottery for once, however I wouldn't have known about the offer, or it's quick withdrawal if I didn't find it here.
I have money in there but never get notified of anything.
Very appreciative for you all here.

Missed the opportunity.

For those who are glued to this board, it may be a "smart" move. But for the vast majority of Canadians, it's a matter of luck.
Lots of people, especially right now, don't have any time at all to pursue investments. For them, it's bad luck. They are lucky if they even get any sleep. Just don't tell them they aren't "smart" if you end up in their care. It might not go over too well.

Loonie said
For those who are glued to this board, it may be a "smart" move. But for the vast majority of Canadians, it's a matter of luck.
Lots of people, especially right now, don't have any time at all to pursue investments. For them, it's bad luck. They are lucky if they even get any sleep. Just don't tell them they aren't "smart" if you end up in their care. It might not go over too well.  

Honestly I'm surprised by your answer. With governments telling us to stay home, the inability to travel and with so many stores and businesses closed, I have more time than I know what to do with it. Watching what is happening in the financial world occupies a tiny, tiny part of my day.

But like I said earlier, checking out the GIC rates on a daily basis is something I've been doing for a very long time. I find it hard to believe anyone could be so busy to not be able to spend a few minutes weekdays to be aware of what is happening.