# Oaken GIC Offer - 1-Year @ 2.40%



## fatcat (Nov 11, 2009)

just got an email from oaken (a cdic insured institution) and they have a nice promo back again
they are adding 25 basis points to all gic's for the life of term
and they have raised their 1-year gic to 2.15
that means a 1-year gic is currently paying 2.4%

i wonder if they are have trouble raising cash or have some special need ?
are the savers dipping their toes in the markets instead of buying gic's ?


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## NorthernRaven (Aug 4, 2010)

Peoples has had a 2.4% 1-year rate for awhile, and currently has a 2.45% 15-month special offer. Tangerine and PCF have their 3% HISA specials, you can get a blended 2.35% 1-year from Hubert, and I'm sure there are others. I'd assume that especially small/new institutions, or ones looking at expanding or supporting their short-term mortgage book, or defending/adding a little market share, are willing to spend a little more on cost of deposits.


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## fatcat (Nov 11, 2009)

NorthernRaven said:


> Peoples has had a 2.4% 1-year rate for awhile, and currently has a 2.45% 15-month special offer. Tangerine and PCF have their 3% HISA specials, you can get a blended 2.35% 1-year from Hubert, and I'm sure there are others. I'd assume that especially small/new institutions, or ones looking at expanding or supporting their short-term mortgage book, or defending/adding a little market share, are willing to spend a little more on cost of deposits.


well, as i have stated may times, cdf has the worst web interface i have ever used and caused me a real hassle because they are so far behind in modern financial web services ... peoples trust has such lousy security that i ended up getting all of my personal data stolen form their everything from my sin to email to the works so those are institutions i just don't trust ... tangerine, i have never dealt with

i recommend oaken so highly because i have several gic's with them and they have been stellar ... oaken's regular 18 month is now 2.5% with the bonus


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## gardner (Feb 13, 2014)

I've been wanting to set up a new GIC ladder for a few months. I dearly wish I could just use my TDW account to do it, but the menu of options is terrible.
https://fibondoneselfserve.tdwaterhouse.ca/FIP_GICLinkWeb/GICLink
I recently signed up with Tangerine to get a decent US$ GIC rate, but even their $CAN rates seem to be below the mark.

Therefore I am thinking of signing up with Oaken/Home Trust. There's a form for signing up and setting up a GIC ladder in one go.
If instead I just sign up for a savings account initially, can I then set up and manipulate a GIC ladder online?


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## fatcat (Nov 11, 2009)

gardner said:


> I've been wanting to set up a new GIC ladder for a few months. I dearly wish I could just use my TDW account to do it, but the menu of options is terrible.
> https://fibondoneselfserve.tdwaterhouse.ca/FIP_GICLinkWeb/GICLink
> I recently signed up with Tangerine to get a decent US$ GIC rate, but even their $CAN rates seem to be below the mark.
> 
> ...


don't think you can do the gic ladder online

but they are helpful and friendly and i'm sure will do it all over the phone

they still need you to sign papers

yes, td just does not have rates that are competitive ... too bad because it would be nice to have it all under one umbrella


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## gardner (Feb 13, 2014)

fatcat said:


> they still need you to sign papers


Sure, but once I have an account with them, that would be all the papers needed. I'll talk to them when I have a chance.


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## Just a Guy (Mar 27, 2012)

You know, I don't mean to sound flippant...but how can anyone get excited over these returns?

Sure they are "guaranteed", but really...after taxes for interest income, you'd almost be better off spending the money.

If you have enough to make investing at these rates make any money, then you should have enough to invest in something that generates better returns and not have to worry about losing it. Heck, some dividends on banks are double that and are pretty safe.


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## fatcat (Nov 11, 2009)

Just a Guy said:


> You know, I don't mean to sound flippant...but how can anyone get excited over these returns?
> 
> Sure they are "guaranteed", but really...after taxes for interest income, you'd almost be better off spending the money.
> 
> If you have enough to make investing at these rates make any money, then you should have enough to invest in something that generates better returns and not have to worry about losing it. Heck, some dividends on banks are double that and are *pretty* safe.


let me paraphrase bill clinton and say "it all depends on what the meaning of the word *pretty* is"

if you have an allocation to fixed income products you usually do so to mitigate the equity portfolio risk and thus gic's (at whatever prevailing rates) can be a key part of that strategy

no way are canadian bank shares to be considered part of your fixed income portfolio, they come after bonds and then after preffereds in case of liquidation

and as james will tell you, said impending liquidation of canadian banks is just around the corner so you want to have all the hatches battened down ... right james ? each:


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## gardner (Feb 13, 2014)

In my case, I have a % of my portfolio in cash and cash equivalents. Even at 12% or whatever it is, it's still a fair wodge of cash. I will take what I can get for interest, but doubling down on my existing equity or preferred or bond positions does not leave me with the target cash holdings. Yes, the yield is crap, but it's worse on $US and I have a bunch of those too.


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## lonewolf (Jun 12, 2012)

I think investors investing in GICs will make out like bandits deflation is coming.

After taxes it is hard to make money when interest rates & inflation is high if your income is coming from interest. A lot of the money will be taxed @ a higher tax rate.


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## james4beach (Nov 15, 2012)

5 year GIC rates are creeping up. I bought a 2.56% scotia 5 year GIC today (through TDDI).

That rate is far better than anything you'll find in the corporate bond market, or in bond ETFs, plus CDIC insured.


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## fatcat (Nov 11, 2009)

james4beach said:


> 5 year GIC rates are creeping up. I bought a 2.56% scotia 5 year GIC today (through TDDI).
> 
> That rate is far better than anything you'll find in the corporate bond market, or in bond ETFs, plus CDIC insured.


if rates are starting to creep up and the boc is talking about rate raises next year

http://business.financialpost.com/2...n-may-and-rise-steadily-after-that-oecd-says/

why would you want to lock at 2.56 for 5 when you can buy a high grade corporate etf that pays 2.70 and is fully liquid (ZCM) ?

don't agree that 2.56 5 year is a bargain ... maybe a 2 year but not a 5-year lock


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## gardner (Feb 13, 2014)

fatcat said:


> why would you want to lock at 2.56 for 5


Oaken/Home Trust STILL is paying 3.05% for 5Y. No sign that they're edging up at all.

WRT ZCM, is this a premium bond fund that pays taxable interest that you never actually receive? That is one of the frustrations of most bond funds for non-registered savings.


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## james4beach (Nov 15, 2012)

fatcat said:


> why would you want to lock at 2.56 for 5 when you can buy a high grade corporate etf that pays 2.70 and is fully liquid (ZCM) ?


These are not equivalent things (CDIC-insured GIC versus ZCM). ZCM is riskier, for only 14 basis points more yield -- not worth it, in my assessment.

Yes ZCM is 2.70% ytm after MER, but its portfolio has average 7 year term and its ratings breakdown is 16% AA, 36% A, 48% BBB which is border-line junk. So it's further out on the yield curve, and is also not a high grade bond fund. The USA demonstrated that bonds of this level of quality can lose 10%-20% of their value during credit turmoil independent of interest rates.

So the choice I see is, 2.56% in a CDIC-insured GIC that can't possibly lose money unless Canada goes bankrupt, vs 2.70% in higher risk corporates (ZCM) that could lose 10%-20% value.


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## fatcat (Nov 11, 2009)

james4beach said:


> These are not equivalent things (CDIC-insured GIC versus ZCM). ZCM is riskier, for only 14 basis points more yield -- not worth it, in my assessment.
> 
> Yes ZCM is 2.70% ytm after MER, but its portfolio has average 7 year term and its ratings breakdown is 16% AA, 36% A, 48% BBB which is border-line junk. So it's further out on the yield curve, and is also not a high grade bond fund. The USA demonstrated that bonds of this level of quality can lose 10%-20% of their value during credit turmoil independent of interest rates.
> 
> So the choice I see is, 2.56% in a CDIC-insured GIC that can't possibly lose money unless Canada goes bankrupt, vs 2.70% in higher risk corporates (ZCM) that could lose 10%-20% value.


well, nothing compares to gic's for guaranteed return (though i can see a day coming when people will trust mega corporations more than governments)

but i think you pay a price for that guarantee that offsets the risk in ZCM

1) gic's are completely illiquid, your money is locked and i really value liquidity, money management is to me one of the bedrock keys of investing, not getting trapped in a liquidity crisis
2) bbb rated bonds still have extremely low default rates (2%) though default is a risk as is interest rate sensitivity
3) but you are taking on interest rate risk yourself by locking @2.56 for 5 years

i have a mix of gic's and bond funds though next year i am switching entirely to a individual bond ladder


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## coptzr (Jan 18, 2013)

I have been combining some leftover(really old) bonds and gics that have finally expired which I was going to transfer over into a GIC until some others expire over next couple years. I have been holding back as the bank is really calling me on making a decision and usually this means they want your money or an increase in interest rate is about to happen. I didn't want to wait past this month, should really make a choice by end of today. A 30second phone call would get me locked in 2.3% for 5yr. I think its worth the call to Oaken first thing at 9am. Would really like 2.5% on 2yr.

Is anyone invested in Home Capital Group Inc(HCG)?


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## gibor365 (Apr 1, 2011)

I;m buying Peoples Trust 15 months GIC 2.45%


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