Lowered Interest Rates

[Koala]

Most of savings account money is with Canadian Tire. I also use ING, TD and RBC.

[NorthernRaven]

The Big5 banks have pared their sorta-HISAs down to 1.2%, so a lot of this is probably just the general savings market ticking down a bit - perhaps the general reasoning is that there won't be a BoC rate hike anytime soon, and the various HISA rates were overly juicy if one wasn't coming along.

I'd guess each of the HISAs position themselves relative to the others. ING feels it needs only offer 15-20 basis points over the big banks, and PCF thinks it can meet its needs at ING levels. I wouldn't be surprised if Canadian Tire drops down to 1.75% or 1.8% as well - it looks like they tried to drop their rate to 1.75% for a couple of months last April before bouncing back up, even while Ally and others were locked at 2%.

The interesting ones will be the Manitoba credit unions - I'm curious to see what happens there.

[Brian Weatherdon CFP]

Hi Koala, maybe interest-rate investing is a problem because it pays nothing (after inflation). One could opt for dividend-yield to pay twice as much ....and offer a lower tax-rate if non-registered).

Many Bond funds could have losses if interest rates rise; yet if you work through to find funds with short-duration bonds, corporate bonds, and govt/corp bonds globally (pref not from high debt countries) you could be on the right track. Global infrastructure some dividend focus could even be part of such a focus.

I don't give any advice on purchasing in this forum, however the terms I've mentioned here could be accomplished inside a low-cost one- or two-fund portfolio that you could enjoy with some profitability and pleasure for the year's time you suggested.

Cheers!
BW

[slacker]

I just noticed that both Ally and ING has dropped their rates, from 2.0%, and 15% resptively, to 1.8% and 1.35% respectively.

What's going on? I thought rates were pressured to go up??

PS: Ah yes, thanks admin for merging thread.

[mrPPincer]

So far the Manitoba credit unions are still hanging in there at 2% and 2.1%.

[Koala]

BW thanks for the advice! Not all of my money is in HISAs, but there is a large portion there. I did move a little bit more to a bond fund, and may consider contributing more to some of my other MFs. As long as rates don't go down further, I'll play it safe with a good sized portion as cash.

It might not beat inflation, but as long as it beats what the housing market here is doing I'll be happy. I'd prefer it if the HISA rate was still at 3.5% though