# PC financial 2.5% interest til June 30



## james4beach (Nov 15, 2012)

Their regular promotion is back (nobody posted this yet?). Earn 2.5% on new deposits, meaning new money you add, until June 30
http://www.pcfinancial.ca/debankify/


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## liquidfinance (Jan 28, 2011)

Do many people get excited enough at an offer lasting 2 months?

Might be ok if you have $100k + to move about, but then if you have that would it be worth the effort?

I hate these short term offers. Waste of time.


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## Butters (Apr 20, 2012)

This promo deal has been extended twice now.
This time they are competing against Tangerine.

I deal with PC.
I am actually planning to stock pile some cash to pay for car insurance, house insurance and property taxes in full, and increase my emergency fund over the next few months.
I'll probably earn an extra 5 dollars in interest, woo hoo, I'm going to subway for lunch!


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## Addy (Mar 12, 2010)

liquidfinance said:


> Do many people get excited enough at an offer lasting 2 months?
> 
> Might be ok if you have $100k + to move about, but then if you have that would it be worth the effort?
> 
> I hate these short term offers. Waste of time.


I have no where close to 100K but enough to make it worthwhile to do a transfer between accounts. It took me about 45 seconds (if that) to complete the transfer online, which gives me about 40% more interest (taxable though, blah) for two months. Not much time wasted for me.


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## carverman (Nov 8, 2010)

I'm with PC Financial as well. Noticed in this ad that they also mention "No fee bank account"..does this mean they will pay 2.5% on any new deposits in the checking account if left there until June 30?


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## carverman (Nov 8, 2010)

SheaButters said:


> T
> I'll probably earn an extra 5 dollars in interest, woo hoo, I'm going to subway for lunch!


..and who is telling us there is no such thing as a free lunch?....PC Financial will buy you that Subway.:biggrin:


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## Sammi (Nov 12, 2013)

I just switch between Tangerine and PC Financial for these "deals". I don't have a ton of money in my bank account as most of it is in my investment accounts but I do get direct deposit on my pay weekly so that still counts as new money.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> I'm with PC Financial as well.
> 
> Noticed in this ad that they also mention "No fee bank account"..does this mean they will pay 2.5% on any new deposits in the checking account if left there until June 30?


They only refer to either "savings" or "no fee bank account", where in my experience the bank account is the chequing account. So yes.

I did notice the fine print lists "To participate in the Offer, an Eligible Account holder must enroll or accept the Offer at any time during the Offer Period by accepting the online banking invitation, calling 1 888 236 6394 or visiting an in-store President's Choice Financial pavilion or hub to speak with a customer service representative.", so I plan to call in to make sure I'm enrolled.


Cheers


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## mrPPincer (Nov 21, 2011)

Thanks James for posting this!
I was aware of the current promo when it began at 2% but I wasn't aware until now that they quietly bumped it up to 2.5%.
It didn't show up on my login screen either.

I just phoned in to register and am moving some cash over now (I'm sitting on 80K cash right now so it's definitely worth my while).
I've used these PCF promos several times now, but the 2% rate was not enough to make me move back; I guess it must've been the same with others as well, so they changed it to 2.5%


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## AMABILE (Apr 3, 2009)

Tangerine just extended their 2.5% promotion to July 31.


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## Addy (Mar 12, 2010)

Sweet, thanks for posting that.


AMABILE said:


> Tangerine just extended their 2.5% promotion to July 31.


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## carverman (Nov 8, 2010)

Hmmm..their TFSA pays 1.3% per annum on deposits there...*but at least the gov't cant tax you on the interest earned*.
.so lets say you put $10,000 in your TFSA and in 12 months..it earns $130, but... you keep it all!

If you register with their special 2.5% offer and manage to deposit $10,000 in one of their savings or checking accts..they pay 2.5% per annum, so if you put $10,000 in there in 12 months it earns $250.

But then the bank sends you a T5 next February on that interest (which is not tax free), lets say you are in the lowest tax bracket (21%)...(outside your tax deductions of course),
that is $52.50 that CRA wants back from your interest earned on that $10,000....
so that gives you a net of $200 that you get to keep for keeping that $10,000 in their accounts for 12 months, (while they charge 5% to 8% interest off your money lending it out), 
the difference is only about $70..

enough for a couple of pizzas and a few soft drinks...and maybe a bucket of fried chicken.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> Hmmm..their TFSA pays 1.3% per annum on deposits there...*but at least the gov't cant tax you on the interest earned*.
> .so lets say you put $10,000 in your TFSA and in 12 months..it earns $130, but... you keep it all!


... which is of no value where one has already used up one's TFSA contribution room so this may be moot.




carverman said:


> ... so that gives you a net of $200 that you get to keep for keeping that $10,000 in their accounts for 12 months, (while they charge 5% to 8% interest off your money lending it out), the difference is only about $70..
> 
> enough for a couple of pizzas and a few soft drinks...and maybe a bucket of fried chicken.


So your argument is that because some have not used up the TFSA room, those who have no TFSA room should stick to a lower interest rate when a higher one is available?

Where the choice is to get paid and taxed on 1.3% versus 2.5% - call me crazy but I'm going to choose 2.5% everytime, especially when it take maybe ten minutes worth of work take qualify.


Cheers


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## rikk (May 28, 2012)

That 2.5% doesn't apply to the portion of new deposits over $1M ... hardly worth the effort ... I wish :encouragement:


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## carverman (Nov 8, 2010)

Eclectic12 said:


> ... which is of no value where one has already used up one's TFSA contribution room so this may be moot.


you have a point, but I was referring to the yearly $5500 contribution limit PLUS any UNused contribution still available from previous years. Also, IF you have
to take out any money from that TFSA in a given year, say 2014, that will be added to the max contribution limit for 2015.
In my case, I'm taking out about $15k for a new roof this year, so that allows me to put back in $20.5k after January1, 2015.
Right now, I've got $10k "parked" in a GIC which pays diddly squat (1.5%) for 12 months..but as soon as it matures ($150 of interest)next January, it's going back into my TFSA.

As they say..you can let your money rot (not keep up in inflation) in one account or let it rot in another account...choice is yours..and other than the TFSA, the gov't wants
their share of what you get in interest. 





> So your argument is that because some have not used up the TFSA room, those who have no TFSA room should stick to a lower interest rate when a higher one is available?


No, it's your choice what you want to do with your money..but 2.5% on $10k, compounded interest for 12 months is $252.88, of which you may have to pay some of it back on your
tax filing.


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## Addy (Mar 12, 2010)

I fail to see your point Carverman, is it that it's not worth the small amount you would be ahead by putting your money with PC for 2.5%?


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## Eclectic12 (Oct 20, 2010)

carverman said:


> you have a point, but I was referring to the yearly $5500 contribution limit PLUS any used contribution still available from previous years ...


I think you mean "unused" contribution room still available as "used" means it is no longer available.

I digress ... all what you've listed in detail (i.e. yearly allotment, unused room, last year's withdrawals) when contributions are subtracted result in the "TFSA available contribution room". Or to put it another way, I'm talking about the end result and your talking about the steps along the way. 

When it's used up ... it is used up so at that point, the individual does not have this option and it becomes moot.




carverman said:


> ... Also, IF you have to take out any money from that TFSA in a given year, say 2014, that will be added to the max contribution limit for 2015.


Which is great to keep in mind for next year but since it is not known if PCF & Tangerine will be bumping rates in 2015, I'm not sure the relevance for today's choices.




carverman said:


> ... In my case, I'm taking out about $15k for a new roof this year, so that allows me to put back in $20.5k after January1, 2015.
> Right now, I've got $10k "parked" in a GIC which pays diddly squat (1.5%) for 12 months..but as soon as it matures ($150 of interest)next January, it's going back into my TFSA.


 ... which is good for your situation, next year.

In the meantime, if you received an inheritance where it's going to be taxed anyway - are you going to look for 0.10% on a chequing account, 1.3 percent in a savings account or a temporary 2.5% that takes five minutes work (plus little or no work on the taxes)?




carverman said:


> ...No, it's your choice what you want to do with your money..but 2.5% on $10k, compounded interest for 12 months is $252.88, of which you may have to pay some of it back on your tax filing.


Hmmm ... so the idea is to minimise taxes ... so let's transfer that $10K to a taxable chequing account that pays 0.05% so that those pesky taxes are reduced, right? :biggrin:


I get that it good to consider one's options to make full use of tax free/deferred accounts but I don't get why paying taxes on a higher earning seems to be a bad thing.


Cheers

*PS*

If those taxes are a bad thing ... why didn't you put the $10K in a mattress and avoid the whole taxes/restriction thing that holding a GIC adds?


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## Beaver101 (Nov 14, 2011)

Eclectic12 said:


> I think you mean "unused" contribution room still available as "used" means it is no longer available. ...
> 
> I get that it good to consider one's options to make full use of tax free/deferred accounts but I *don't get why paying taxes on a higher earning seems to be a bad thing.*
> Cheers
> ...


 ... maybe because the extra interest might put him in a higher tax bracket? or maybe it might cause clawback of this retiree's OAS/CPP, etc.? He has reasons so without knowing the full details, can't jump to that kind of sarcastic conclusion.


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## cainvest (May 1, 2013)

Beaver101 said:


> ... maybe because the extra interest might put him in a higher tax bracket?


How is this a bad thing, you still walk away with more money right?


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## Beaver101 (Nov 14, 2011)

Not saying it's a bad thing to walk away with more money but might not be worth his time and efforts for a mere extra $25/$50 at the end of the day(year).


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## carverman (Nov 8, 2010)

Addy said:


> I fail to see your point Carverman, is it that it's not worth the small amount you would be ahead by putting your money with PC for 2.5%?


They have enough of my savings locked up as it is. I'm not saying that 2.5% is not worth while, but they screwed me in January by locking up my $10k for 1 year for 1.5%.
They should have been offering this rate right from the beginning of the year. I'm a bit put off with PC Financial (aka CIBC) but OTOH, they don't charge me for banking (checking acct)
or printing checks like some banks do..so if I look at it that way..

However, as a PCF customer for many years now (1996), they should have offered me the 2.5% without all this registering and stuff I would need to do now to get it..that's all
I'm saying. They make fat profits off my money and probably don't pay any tax on their earnings either..so it seems that the little people out there get shafted one way or another.


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## carverman (Nov 8, 2010)

Eclectic12 said:


> I think you mean "unused" contribution room still available as "used" means it is no longer available.


Yes, that is what I meant. I consult my CRA account on line to see what my "headroom" is for 2014.
I keep a very tight monthly budget on my income/expenses so that in January, I know what my unused contribution room is + the $5500 max per year. 
I keep this running balance on my monthly budget, so as I contribute, I deduct what I contribute from the allowable contributions for the year and not
run the risk of over contributing in a given year.



> When it's used up ... it is used up so at that point, the individual does not have this option and it becomes moot.


True, but I use the TFSA as my working expense fund..for dental and any additional medical not covered by OHIP as well as any repairs or renovations for my house..so each year I pull out more than the allowable $5500. Makes more sense to me than putting it in some additional interest acct and then having to pay income tax on the interest earned.





> Which is great to keep in mind for next year but since it is not known if PCF & Tangerine will be bumping rates in 2015, I'm not sure the relevance for today's choices.


If they do then I may do something different like the HIS, but for now, it's really not going to make enough difference for me and I pay enough taxes as it is.




> .In the meantime, if you received an inheritance where it's going to be taxed anyway - are you going to look for 0.10% on a chequing account, 1.3 percent in a savings account or a temporary 2.5% that takes five minutes work (plus little or no work on the taxes)?


I already received it last fall and there was $50k sitting in a low interest bearing savings account..1.35%..so I decided to break it into 5 $10k segments and into a PCF laddered
GIC..,which returns on average about 2% . Still have to pay income tax on the interest earned, but at least for now, while I have enough in my TFSA to take care of
this years expenses, the first $10k GIC (maturing next January) is parked for now. As each $10k GIC matures over the next 5 years, I will replace the money in my TFSA
that I withdraw each year. 





> If those taxes are a bad thing ... why didn't you put the $10K in a mattress and avoid the whole taxes/restriction thing that holding a GIC adds?


You probably meant shoebox? Three reasons: Theft, fire and I need to pay any major expenses by check/credit card, so it's inconvenient to have to re-deposit
those 100 hundred dollar bills each time, I want to add money to my checking acct.


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## cainvest (May 1, 2013)

Beaver101 said:


> Not saying it's a bad thing to walk away with more money but might not be worth his time and efforts for a mere extra $25/$50 at the end of the day(year).


I agree with that, not worth my time either.
My previous comment was related to your "higher tax bracket" which didn't make sense to me. You still end up with more money in a higher tax bracket due to the extra income.


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## rikk (May 28, 2012)

carverman said:


> They have enough of my savings locked up as it is. I'm not saying that 2.5% is not worth while, but they screwed me in January by locking up my $10k for 1 year for 1.5%.
> They should have been offering this rate right from the beginning of the year.


These offers tend to appear when people have extra money ... like when they get their tax refunds, rrsp contributions refunds ... my opinion. I'd look into it but as most have said, that extra few percent for a few months isn't worth while ... as a "loss leader" for new customers seems worth the banks while though I'm guessing.


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## carverman (Nov 8, 2010)

rikk said:


> These offers tend to appear when people have extra money ... like when they get their tax refunds, rrsp contributions refunds ... my opinion. I'd look into it but as most have said, that extra few percent for a few months isn't worth while ... as a "loss leader" for new customers seems worth the banks while though I'm guessing.


Agree..what CIBC/PCF is doing is attracting new customers by waving this carrot for a few months. The standard interest they are paying right now is 1.25% or even less.
They are just trying to compete with Tangerine to attract new customers...its all just smoke and mirrors, because if they decide to rescind the interest by the end of this year, they
still have got use of your money for 6 months or more.
I have considerable amount in GICs with them as of this year..I didn't get any special deal being a long standing good customer..so basically, I'm not going for the bait.


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## carverman (Nov 8, 2010)

cainvest said:


> I agree with that, not worth my time either.
> My previous comment was related to your "higher tax bracket" which didn't make sense to me. You still end up with more money in a higher tax bracket due to the extra income.


??.not from the interest (2.5%) they are paying..you will be paying more on that interest depending on which of the higher tax brackets you are in..and if you are earning$150k or more after the Fiberals
get their way, you will be paying a LOT more in income taxes..so it all factors in the end..unless you have a lot of personal deductions.


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## cainvest (May 1, 2013)

carverman said:


> ??.not from the interest (2.5%) they are paying..you will be paying more on that interest depending on which of the higher tax brackets you are in..and if you are earning$150k or more after the Fiberals
> get their way, you will be paying a LOT more in income taxes..so it all factors in the end..unless you have a lot of personal deductions.


If you cross the highest fed bracket (~$136k) you only pay 3% more on the interest over that amount. Depending on the province and amount, you may or may not get into a higher rate. Regardless, you still end up with more money.


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> ... maybe because the extra interest might put him in a higher tax bracket?
> or maybe it might cause clawback of this retiree's OAS/CPP, etc.?


Possibly ... < insert incredulous, innocent surprised look here > ... you think it would be significant?

It was stated to "earn $250" so even if it does push one into a higher tax bracket or into claw back territory - for me, this doesn't seem enough to sweat about.

One of the reasons I'm thinking this is not the case is that usually people in this situation are vocal about it but technically, this is a possibility.




Beaver101 said:


> ... He has reasons so without knowing the full details, can't jump to that kind of sarcastic conclusion.


The OP is worded to imply it applies to everyone regardless of his specific situation/reasons. 
Despite pointing out that situations/available choice vary, the follow on response while acknowledging there is choice, repeats the tax implications.
To me, rightly or wrongly sends the message that increased taxes are to avoided and trump all situations.

Where as others point out ....



cainvest said:


> How is this a bad thing, you still walk away with more money right?


and you acknowledge that:



Beaver101 said:


> Not saying it's a bad thing to walk away with more money ...



... which was what the sarcasm was intended to underline as the opportunity to confirm the comments were for a specific situation took a back seat to the tax implications.


Cheers


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## Eclectic12 (Oct 20, 2010)

carverman said:


> They have enough of my savings locked up as it is.
> 
> I'm not saying that 2.5% is not worth while, but they screwed me in January by locking up my $10k for 1 year for 1.5% ...


Okay ... then a bit more "this is my situation" and a bit less of "you" or underlining tax implications would make this more clear.




carverman said:


> However, as a PCF customer for many years now (1996), they should have offered me the 2.5% without all this registering and stuff I would need to do now to get it..that's all I'm saying ...


Which is understandable ... but quite a bit different.




carverman said:


> They make fat profits off my money and probably don't pay any tax on their earnings either..so it seems that the little people out there get shafted one way or another.


I'm not sure I'd focus so much on that when TD pays 0% in their HISA for under $5K and for anything over bump it to 1.05% whereas PCF pays 1.30% on $1 and up.

Assuming the reps knew about the promotion, it would have been good to know of the options.

The flip side is that for me personally, I"m not sure I'd have bothered with the effort to setup GICs when as I recall, the HISA was paying 1.3% without any lockin required ... but that's me.


Cheers


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## Addy (Mar 12, 2010)

I think "pushes you into the next tax bracket" is used inappropriately. If you make say 30K a year (just a sample number, not accurate), you don't pay the second or third tier tax on all of your income, it's only on the income above the first (and second) tiers. SO even if some small income pushes you into the next tax bracket, it's not like all of your income is taxed at that higher tax rate.

I'm not arguing for some $250 or $50 may not be worthy enough to transfer their cash over, I'm just trying to point out the bit of sensationalism that is commonly used around income tax levels that may be just misunderstood.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> Agree..what CIBC/PCF is doing is attracting new customers by waving this carrot for a few months. The standard interest they are paying right now is 1.25% or even less.


I'm not sure how many are new and how many are simply transferring in from other accounts that already exist.

I am one example (I believe there are many more) where ING/Tangerine as well as PCF account have existed for years, likely decades at this point. Transfers are already a known quantity and take little time.

So the bigger impact may be having more cash to put into whatever investment the financial institution has it's eye on.




carverman said:


> ... They are just trying to compete with Tangerine to attract new customers...its all just smoke and mirrors, because if they decide to rescind the interest by the end of this year, they still have got use of your money for 6 months or more.
> I have considerable amount in GICs with them as of this year...


Aren't you confusing GICs or possibly RRSP bump up rates with TFSA savings or taxable chequing/savings accounts?
As I read the 2.5% offer, there's no mention of a lockin for the chequing account or savings account.

Without something special - there's no lockin for my current accounts.


Then too, the Tangerine offer covers TFSA savings accounts so depending on the effort involved, one could also avoid paying any taxes. 




carverman said:


> ... you will be paying more on that interest depending on which of the higher tax brackets you are in ... you will be paying a LOT more in income taxes..so it all factors in the end..unless you have a lot of personal deductions.


Even if one does not have a lot of personal deductions on the $10K figure you mentioned and using simple interest for simplicity, for an entire year is $250 in interest versus $130. 

So paying a higher tax rate on an additional $120 is going to be a back breaker?


In any case - the only place I see the extra interest having a tax rate implication is when crossing the tax lines. 
When I check the Ontario 2013 tax rates for income, the big hit is the 7% increase for the "over $43,561 up to $69,963" income range. So if anyone is taking the tax hit, it's the lower to middle as the high income level a 4% or less rate.

http://www.taxtips.ca/taxrates/on.htm


At the end of the day, the highest rate is 49.53% so is it really worth forgoing the 50%+ after tax return so that one will save the additional 1.83% through 7% in taxes? 

On the full $250, paying an extra $4.50 through $17.50 in taxes where one would have been at the highest level of the lower tax range without the bump to 2.5% ... but how likely is it that such a small amount is going to be over the line and fully taxed at the higher rate?. I suspect for the few it would impact, it's more like $60 of the interest would be at the higher rate.



Cheers


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## andrewf (Mar 1, 2010)

> I think "pushes you into the next tax bracket" is used inappropriately.


I think whenever I see that, I know I'm dealing with someone who has a shaky at best understanding of how taxes work.


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## carverman (Nov 8, 2010)

Addy said:


> I'm not arguing for some $250 or $50 may not be worthy enough to transfer their cash over, I'm just trying to point out the bit of sensationalism that is commonly used around income tax levels that may be just misunderstood.


Yes, I probably overreacted with this tax thing on the interest earned. Oh well, learned a lot this year about NOT locking in my money in GICs..but it's a done deal now and I will not be doing that again.

I suppose with the 10 pts for every dollar I spend on my PCF MC, I am getting some subsidized groceries, so that at least compensates me for the long wait of 5 years having my money tied up.


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