Will GIC rates go higher soon? - Page 14
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Thread: Will GIC rates go higher soon?

  1. #131
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    Quote Originally Posted by liquidfinance View Post
    Personally I would want at least 5% for 5 years. Which why I don't have any money locked up in GICS.
    This why last couple of years I bought several GIC but only for 2years. The last one 2.2% for 2 years


  2. #132
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    Predicting interest rates is notoriously difficult. This is what a ladder strategy is supposed to get around... the fact that you never know where interest rates are going

  3. #133
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    an interesting article related to interest rates, doesn't really spell out anything profound but worth a look. Is there a good thread started on preparing your investments for rising interest rates on the site?

    http://qz.com/126875/the-economist-w...ten-this-time/

  4. #134
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    home trust 1-year = 2.21
    5 year = 3.15

    slight upticks from last week i think

  5. #135
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    Quote Originally Posted by gibor View Post
    This why last couple of years I bought several GIC but only for 2years. The last one 2.2% for 2 years
    The last time I got a 5% GIC was the end of 2008 and it was not CDIC insured. I know because it comes due at the end of this year.
    There were no 5% 5 year GICs available in Canada since that I could see.

    ...but buying 2 year GICs over the intervening five years would have made no sense at all.
    You should consider a GIC ladder.

  6. #136
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    Quote Originally Posted by BlackThursday View Post
    The last time I got a 5% GIC was the end of 2008 and it was not CDIC insured. I know because it comes due at the end of this year.
    There were no 5% 5 year GICs available in Canada since that I could see.

    ...but buying 2 year GICs over the intervening five years would have made no sense at all.
    You should consider a GIC ladder.
    Why not?! And why 5 years ladder, and not for example 3 years?

    If difference in interest between HISA and 5 years GIC is less than 1%, I would prefer shorter ladder, if more - longer.

  7. #137
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    I think a shorter ladder is still a valid strategy. It's not set in stone that a ladder has to be 5 years out.

  8. #138
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    Quote Originally Posted by james4beach View Post
    I think a shorter ladder is still a valid strategy. It's not set in stone that a ladder has to be 5 years out.
    This is exactly my point! Why 5 years?! Only because up to 5 years GICs insured by CDIC?!
    It's difficult to backtrack all possible rates, but i just wondering if,(let's say for last 15 years) 5 years ladder was better
    than 3 or even 2 years ladder?

    On different account we have 2 GIC that will be matured in fall 2013, 4 in 2014 and 2 in 2015, All used to be 2-3 years GIC, I didn't decide yet for how long to lock next term .... but considering current HISA interest 2%, I doubt that will be locking for 5 years unless interest will be close to 4%

  9. #139
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    Quote Originally Posted by gibor View Post
    Why not?! And why 5 years ladder, and not for example 3 years?
    Because only a fool thinks he can predict interest rate trends so you might as well get the maximum rate possible when each ladder rung matures.

    Do the math to determine how many basis points you are losing (or have lost already) simply because you "think" interest rates might go up significantly in 3 years and
    keep in mind that with a 5 year ladder each year 20% of your funds would be maturing anyway permitting you take advantage of those rates that are "obviously" going to rise.

    Hence: what you are doing makes no sense to me.

    But to each his own.

  10. #140
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    Well personally my ladder goes out even further than 5 years, using government bonds. I posted recently about how I bought the 2021 bond and that's a 7.5 year spot on my ladder.


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