# RBC's GICs and online banking



## james4beach (Nov 15, 2012)

I have an account with Royal Bank but hardly use it. This question is for other RBC customers.

Do you buy GICs through RBC? Where are the best rates, for example can they be found somewhere through the online banking system?

e.g. I use scotia online and I purchase GICs online, and the rates are much better than the posted public rates. I'm just wondering if RBC has an equivalent to this.


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## birdman (Feb 12, 2013)

While I do not deal with the Royal I can say from experience that you will do better by dealing with your account manager if you have one. If you do not have a manager sugest you talk to someone in person. A lot depends on the level of business you have with them (or may have with them) and in recently shopping for a new financial institution I learned that one bank had different level of rates depending on the amount of business you had with them. The latter included your spouse and family, brokerage accts, term deposit ond other deposit accounts, credit card and RSP's. They had different GIC rates for 500,000. and one million. Probably also had higher than posted rates for say over 100,000. If you have a fair amount of business with your bank they do not normally wish to lose you to a competitor and I would recommend you research what you could get elsewhere and negotiate in person. D'uring my shopping there was up to a .55% difference in rates between institutions. Three of these were in a few basis points (.o1% or so) of one another which really didn't matter. PM me if you wish more info.


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## fatcat (Nov 11, 2009)

james, do you use a gic broker like gic direct ?
they are pretty good for rates
i don't think any of the big banks offer rates in the territory of the smaller institutions


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## birdman (Feb 12, 2013)

I received similar quotes from one chartered bank and 2 local CU's. Other remote institutions, like Achieva, were higher.


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## MoreMiles (Apr 20, 2011)

Do you know that there is also a secondary market just like bonds. Some owners want to sell their GIC before maturity so they sell it at reduced rate. For example, a 5 year GiC yieldIng 4% from a few years ago maybe sold for 3.25% with 2 years left because the owner need the money sooner. The new buyer will get a higher rate than the current new issue rate so everyone is happy.


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## birdman (Feb 12, 2013)

Didn't know that More Miles. Is that done through the bank somehow and if not, where does one access that market? There was never one when I worked in the business 12 years ago. Would be interested in learning more.


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## MoreMiles (Apr 20, 2011)

frase said:


> Didn't know that More Miles. Is that done through the bank somehow and if not, where does one access that market? There was never one when I worked in the business 12 years ago. Would be interested in learning more.


http://www.theglobeandmail.com/glob...y-to-juice-up-your-gic-yields/article1391560/


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## james4beach (Nov 15, 2012)

Thanks for the replies. Currently I purchase GICs at my credit union (which has high rates) and also through TD Waterhouse's GIC offerings. Those are also competitive rates, from different issuers. @fatcat, so I guess they're my GIC broker.

Sometimes I buy them with scotia online when good rates pop up, during promotions.

I didn't really expect that I could get anything this good directly at Royal, but I thought I would check just in case. I may talk to one of their 'advisors' just to see what may be possible.


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## Oldroe (Sep 18, 2009)

If you have the #'s everything is negotiable at banks. And if you have the #'s every bank will fight for your biz. This include GIC rates, loan rates, fees, mortgage rates. If they want your house valued they will pick up the cost.

The people that work for me at TD know I want the best rate and will walk.


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## MoreMiles (Apr 20, 2011)

Oldroe said:


> If you have the #'s everything is negotiable at banks. And if you have the #'s every bank will fight for your biz. This include GIC rates, loan rates, fees, mortgage rates. If they want your house valued they will pick up the cost.
> 
> The people that work for me at TD know I want the best rate and will walk.


Well. There is only so much they can do. For example, they will never give you 5% GIC no matter how you threaten your bank. So you are arguing for 0.25 to 0.50% difference? Not worth the effort in my opinion.


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## Guban (Jul 5, 2011)

MoreMiles said:


> Well. There is only so much they can do. For example, they will never give you 5% GIC no matter how you threaten your bank. So you are arguing for 0.25 to 0.50% difference? Not worth the effort in my opinion.


0.50% on 2% is a big difference!
Also, threatening is rather harsh. "Informing: them that you'd move your business is more like it.:chuncky:


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## birdman (Feb 12, 2013)

.50% on 2.00% is a 25% higher rate. On $1 million or so thats close to being enough to upgrade your vehicle every year. I will move my money for .50% but probably would not move it for less than .20%. .25% is questionable.


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## fraser (May 15, 2010)

We deal with RBC and CIBC. We don't like particularly like their rates. The last time I asked for a best rate (shorter term) from our account rep we were offered 1.3. No thanks. 

We get 1.9 from our deposits at Peoples Trust and Canada Western Bank direct. We need HISA rates as we do no want to be locked in at the moment. So with, a few clicks of the mouse we increased our rate from 1.2/1.3 to 1.9. Better in our pockets than in CIBC or Royal's pocket. 

We were previously dealing with Ally and ING. However when these firms were bought out by Royal and Scotia respectively, they immediately dropped their HISA rates significantly. So we walked...or should I say ran. Not certain about longer term but my guess would be to try the ebased institutions. There are a couple of good ecredit unions in Manitoba however last time I checked they did not have their electronic transfer systems set up so that we could move money easily to and from our bank.

Try this:
http://www.highinterestsavings.ca/chart/


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## Oldroe (Sep 18, 2009)

You missed the answer on the effects of compounding.

And once you establish that everything will be negotiated you get the best rate first time.

So don't negotiated let the money stay with the bank, I still get the div. Thanks.


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## james4beach (Nov 15, 2012)

fraser said:


> We deal with RBC and CIBC. We don't like particularly like their rates. The last time I asked for a best rate (shorter term) from our account rep we were offered 1.3. No thanks.
> 
> We get 1.9 from our deposits at Peoples Trust and Canada Western Bank direct. We need HISA rates as we do no want to be locked in at the moment. So with, a few clicks of the mouse we increased our rate from 1.2/1.3 to 1.9. Better in our pockets than in CIBC or Royal's pocket.


I agree that ING Direct became much less competitive in recent years.

If you have a TD Waterhouse account, I suggest you check out the GIC rates inside the fixed income section. They're pretty good. For example they re-sell GICs from Royal Bank and others at these rates:
3 years, 1.90%
4 years, 2.15%

That's actually higher than Canadian Western Bank. I just find it confusing why the GIC directly at Royal has such a low rate, but when re-sold through TD it's much higher.


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## MrMatt (Dec 21, 2011)

frase said:


> .50% on 2.00% is a 25% higher rate. On $1 million or so thats close to being enough to upgrade your vehicle every year. I will move my money for .50% but probably would not move it for less than .20%. .25% is questionable.


.5% on $1 million is still only $5000/yr, which isn't enough to upgrade your vehicle every year.

Reallistically I'd put effort into 0.5% on a 100k GIC, but beyond that it's chasing pennies and not really worth the trouble.


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## fraser (May 15, 2010)

We are OK with 1.9 on a high interest daily account with no lock in. We need the flexibility.


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## Oldroe (Sep 18, 2009)

you are still missing the compounding.

Keep giving money away good plan.


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## fatcat (Nov 11, 2009)

james4beach said:


> I agree that ING Direct became much less competitive in recent years.
> 
> If you have a TD Waterhouse account, I suggest you check out the GIC rates inside the fixed income section. They're pretty good. For example they re-sell GICs from Royal Bank and others at these rates:
> 3 years, 1.90%
> ...


james, why the heck would you or me or anyone want to lock money for 3 years at 1.9 or 4 for 2.15 when you can get fully liquid cdic 1.9 e-savings ? ... on 100K we are talking about $1900 vs $2150 per year on money that will be unavailable and could get hammered by further rate rises ? ... it's beyond me and i would love to hear your rationale


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## james4beach (Nov 15, 2012)

fatcat said:


> james, why the heck would you or me or anyone want to lock money for 3 years at 1.9 or 4 for 2.15 when you can get fully liquid cdic 1.9 e-savings ? ... on 100K we are talking about $1900 vs $2150 per year on money that will be unavailable and could get hammered by further rate rises ? ... it's beyond me and i would love to hear your rationale


Well I'm just keeping my GIC ladder filled in. The idea with a GIC ladder is that you keep maintaining it so that GICs are regularly maturing over time. Interest rates are unpredictable so you're not supposed to forecast interest rates when deciding whether or not to place a GIC in your ladder. I'm just sticking with the plan.

So while I agree that 1.9% in savings looks much better than 1.9% in a 3 year term, I'm not dismantling my ladder just because of that. I am putting *less* in my ladder than I normally would, precisely due to the point you raise.

But... there are conditions in which it may still turn out to be a good move. For instance, the Bank of Canada rate could drop further and cash savings accounts rates could decline.


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