# Peoples Trust Rate Drop



## canucked_up (Feb 23, 2014)

News to me yesterday and a search here didn't bring it up.
TFSA account rate dropped to 2.5 percent. I wonder/hope? Will they bring up GIC rates to compensate?


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## NorthernRaven (Aug 4, 2010)

If there isn't a thread here, there certainly are at other forums. Basically, PT saves about $1 million this year in interest, and probably won't lose much in the way of existing customers, and 2.5% annual certainly competes with higher short-term promotion rates. 

3% was a promotional rate, and isn't feasible as both PT and TFSA limits have grown. I looked up the numbers from OSFI and TFSA is up to 40% of their combined HISA deposits by now.


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## christinad (Apr 30, 2013)

Notice how they waited until the new year to introduce new rate so people can't easily withdraw the money at the end of the year and deposit elsewhere. I know i can still move my money but it isn't as easy. There also should be some sort of notice before the drop.


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## NorthernRaven (Aug 4, 2010)

christinad said:


> Notice how they waited until the new year to introduce new rate so people can't easily withdraw the money at the end of the year and deposit elsewhere. I know i can still move my money but it isn't as easy. There also should be some sort of notice before the drop.


Unlike most, they don't currently charge a transfer fee, so you can do an official transfer (not withdrawal) to another registered TFSA elsewhere if you wish. Also, apparently they were informally telling at least some people on the phone in December that the rate was going to be changing. 

Out of curiosity, if you had known in December the rate was changing, you would have withdrawn and transferred to where?


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## AltaRed (Jun 8, 2009)

christinad said:


> There also should be some sort of notice before the drop.


Why? HISA rates are subject to change at a moment's notice, as they would be for any kind of savings account. IF you want to have certainty over a fixed period, buy a term deposit or GIC. Read the T's and C's. The PT rate still is competitive with current promotions by selected others, and more than competitive with non-registered HISA rates.


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## canucked_up (Feb 23, 2014)

It would have been nice to know before I scheduled my Jan 1st deposit, I'd bet the timing is no coincidence. I likely would have sent this years contribution to my IE account into equities. Still can transfer if I decide that way. 2.5 % still ain't bad as a deposit account I suppose. Another option is GIC for a long five years at possibly 3.3 % - need to confirm the rate this week to see if it is an option.


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## christinad (Apr 30, 2013)

Bonds did well last year and i am temped to invest in them. Still with interest rates always rumoured to rise i don't know if that is a good idea. I don't like paperwork and i agree it is no coincidence the timing of the decrease. Since i want my money easily accessible there aren't a lot of options. I will probably divert new money somewhere else.


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## NorthernRaven (Aug 4, 2010)

PT is running a business, after all, and so they are going to want inertia on their side, avoid some of the knee-jerk withdrawals that might occur with an earlier announcement of the rate, etc. Now if they had introduced a transfer fee after waiting past year-end, that _would_ have been egregious!


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## canucked_up (Feb 23, 2014)

Lol. Of course I had to get over there and check terms and faqs to gauge their degree of egregiousness... They remain low on my scale.


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## christinad (Apr 30, 2013)

Thanks canucked for posting as i wouldn't have known about it otherwise. I'm definitely going to check the rate once a year. If it drops to 2% then something like cbo may be an option for some of my money.


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## canucked_up (Feb 23, 2014)

christinad said:


> Bonds did well last year and i am temped to invest in them. Still with interest rates always rumoured to rise i don't know if that is a good idea. I don't like paperwork and i agree it is no coincidence the timing of the decrease. Since i want my money easily accessible there aren't a lot of options. I will probably divert new money somewhere else.


I don't know that 'safe' bonds have done much better than PT. I did buy a riskier bond fund last year, but generally treat PT tfsa as a good chunk of my fixed income. 2.5 at PT is very liquid and still respectable for what it is. Weighing my options as well. For sure some(maybe all) $ will remain with PT @ 2.5 for now.


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## Video_Frank (Aug 2, 2013)

canucked_up said:


> I don't know that 'safe' bonds have done much better than PT.


XBB returned 8.7% in the last 12 months. Source here.


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## AltaRed (Jun 8, 2009)

I used to check every savings website (3 institutions not including my discount brokerages) where I have HISA cash every month or so to see current rates, knowing that no notice is required. Now I mostly just click on https://www.highinterestsavings.ca/ now and then to get the latest, i.e. the keeners there spot changes regularly. 

That said, I do not move money around just for a few decimal points difference and I avoid proliferation of accounts like the plague. I would not want my executors or surviving spouse to have to clean up such a mess.


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## AltaRed (Jun 8, 2009)

Video_Frank said:


> XBB returned 8.7% in the last 12 months. Source here.


That is partially because longer term bond yields continued to drop substantially in 2014 especially for 5, 7, 10 yr bonds (per BoC site) resulting in a capital appreciation component as part of that 8.7% return. Longer term bond yields cannot drop much further, so one would expect the capital appreciation component of XBB's return to decrease in 2015, perhaps disappearing completely, or going negative. Regardless, the death of bond ETF performance has been espoused for a few years now and has yet to manifest itself in actuality.


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## canucked_up (Feb 23, 2014)

Video_Frank said:


> XBB returned 8.7% in the last 12 months. Source here.


Too generalized and not enough disclaimers in my statement I guess. "safe", as far as bond funds go, rating/quality of held bonds etc. Go back one more year on XBB?


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## canucked_up (Feb 23, 2014)

Not trying to bash bonds or anything, just not where I am most comfortable at the moment.


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## christinad (Apr 30, 2013)

It looks like hubert has a 2.95 5 year tfsa gic. There's is cashable with penalty. It looks like over 5 years the drop to 2.5% would result in a $800 drop for 30000 so i may start a ladder with some of the money.


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## Video_Frank (Aug 2, 2013)

canucked_up said:


> Too generalized and not enough disclaimers in my statement I guess. "safe", as far as bond funds go, rating/quality of held bonds etc. Go back one more year on XBB?


Sure, 2013 was a "bad" year for bond ETFs. Here's a periodic table for bonds, etc, in Canada. There's only one negative year from 2004 to 2014 for "all bonds", which I realize is a ridiculously short sample period. For me, bonds are an integral part of my portfolio and have served me well, along with my PT HISA. More than one road leads to Rome, though.


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## canucked_up (Feb 23, 2014)

For anyone interested, thought I'd follow up. I have not made any move with my PT money yet. I did confirm that the 3.3% five year GIC rate is for real and found that they have 3% three year also. Just for ... & giggles called PT to ask if they would/could match it. No and didn't expect they would. Now I am torn between these GIC's or moving to Cibc IE to buy some bond fund. Or a combination of the two. Wish me luck making this decision.  
Thanks to the same? AltaRed who posted somewhere, the name of the bank of aforementioned GIC's

It seems the older I get the harder I find it to make some decisions. If I live long enough I may get to the point I starve to death from the inability to decide what to eat. Uh Oh! I just remembered that I take notice of large menus at restaurants with a slight feeling of dread. It's starting already!


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## gibor365 (Apr 1, 2011)

canucked_up said:


> It would have been nice to know before I scheduled my Jan 1st deposit, I'd bet the timing is no coincidence. I likely would have sent this years contribution to my IE account into equities. Still can transfer if I decide that way. 2.5 % still ain't bad as a deposit account I suppose. Another option is GIC for a long five years at possibly 3.3 % - need to confirm the rate this week to see if it is an option.


Exactly! I wouldn't transfer FROM PT TFSA, but would put LESS $ fro new contribution and would put more into EI. Yes, you can do free transfer, but there is too much time involved...as you need to go to CIBC branch to do so....

Yes, they doing promotional 1 year GIC TFSA at 2.6% , but vs 2.5% HISA = 0.1% it's a joke! $10 annually on $10,000


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## gibor365 (Apr 1, 2011)

> I did confirm that the 3.3% five year GIC rate is for real and found that they have 3% three year also


 Who give those rates?!

ICICI give 3% on 5 year TFSA GIC


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## canucked_up (Feb 23, 2014)

cffbank.ca


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## gibor365 (Apr 1, 2011)

Hmmm ... interesting... I like their 3-5 years GIC.... did anyone opened account with them? I couldn't understand on the first glance how to open account.... if all transfers are free and money can be easily transferred in and out to my major bank... also their statement "GICs, RRSPs coming soon" is confusing, as they published rates


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## canucked_up (Feb 23, 2014)

I was thinking I might have to physically go somewhere to open account/GIC(oh the horror). In getting info on GIC's, I called my nearest local 'Canadian First Financial Centre', spoke to their rep and got the process started. He promptly emailed me a client referral form, which I signed and sent back(seems they are affiliated yet not directly involved in the banking operation???). Somebody from the bank called me a little later, took some info and they are sending paperwork. Seems like a painless yet possibly lengthy process so far. Any TFSA transfer would take some time I expect. I don't know and didn't ask about linking to an external bank, as I am only interested in their GIC's. Will they need to set me up with a TFSA account as well as TFSA GIC? Don't know or care either way, I guess we'll see when we get further in the process.
I imagine you can call the bank customer service directly and skip the 'Canadian First Financial Centre' step?


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## gibor365 (Apr 1, 2011)

canucked, thanks for info and please update us with your progress....I generally interested also only in GIC (3years at 3% and 5 y - 3.3%), mostly within RRSP and non-reg... 
Actually what I don't like about PT RSSP -> you cannot have CASH RRSP, so when maturity comes , you need to call just before maturity with new instructions or mail transfer out form (that somehow should arrive just before maturity) or otherwise they will just renew existing GIC... 
wondering if CFF offers cash within RRSP


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## gibor365 (Apr 1, 2011)

Another drop in interest from PT. 
HISA Cash to 1.6%, HISA TFSA to 2.25%.
(As per red flag forum, other online banks also dropped their rates.... )
but still PT gives the best rates for HISA TFSA and best GIC rate 2.45% 1 year for TFSA (started buying those GICs) and 2.45% 2 year for Cash...

All my liquid cash now in PCF 2.6% until June 30, after this date looks like it will be difficult to find any decent rate for HISA


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## scientist (Feb 14, 2015)

gibor said:


> Another drop in interest from PT.
> HISA Cash to 1.6%, HISA TFSA to 2.25%.
> (As per red flag forum, other online banks also dropped their rates.... )
> but still PT gives the best rates for HISA TFSA and best GIC rate 2.45% 1 year for TFSA (started buying those GICs) and 2.45% 2 year for Cash...
> ...


ughhhh i just opened an account with them last week


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## jamesbe (May 8, 2010)

Me too. But it's still better than the competition.


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## Moneytoo (Mar 26, 2014)

Thank you, gibor! And I just checked their rates last week - and was glad they didn't change... sigh

Oh well, will be easier now to convince my husband to put $4,500 in Quetrade Couch Porato-ish TFSA, not in People's Trust one (and maybe start a GIC ladder - but we'd need to open yet another account... sigh)


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## gibor365 (Apr 1, 2011)

jamesbe said:


> Me too. But it's still better than the competition.


True! Even though they in 4 months reduced rates from 3 to 2.25 .... and still nowhere to go 



> in People's Trust one (and maybe start a GIC ladder


 don't want to start ladder, just bought 1 year GIC at 2.45%, in any case no intention to use TFSA money


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## mrPPincer (Nov 21, 2011)

*People's Trust HISA rate cut*

Well, I guess it was inevitable after another BoC rate cut.

Peoples Trust has dropped its regular savings interest rate from 1.60% to 1.45%, and its TFSA interest rate from 2.25% to 2.00% yesterday.
https://www.highinterestsavings.ca/chart/



So today I'm moving all the cash in my PT TFSA HISA (only 22K) over to a non-registered HISA with Tangerine, where I'm currently getting a promotional rate of 3% scheduled to last until the last week of december.

Hopefully equity goes on sale early in 2016 and I'll load up the TFSA with some in-kind transfers or direct purchases or both, maybe grab another UK ADR or two.


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## BrentPv2 (Feb 9, 2015)

BMO had already axed Savings rates to 0.85% before the cut... It's now 0.75%


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## rikk (May 28, 2012)

mrPPincer said:


> So today I'm moving all the cash in my PT TFSA HISA (only 22K) over to a non-registered HISA with Tangerine, where I'm currently getting a promotional rate of 3% scheduled to last until the last week of december.


I'm still better off at 2% interest tax free than 3% interest taxed at my marginal rate and then there's in my case the OAS loss of $0.15/dollar on top of that ... I'm guessing you've already done the math but in case you haven't ...


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## mrPPincer (Nov 21, 2011)

^ yeah rikk most people are probably better off keeping it sheltered at least until year's end, but I'm in a very low tax bracket (I'm talking earned income of maybe 15K or so, plus some capital gains etc which vary from year to year), and I'm still a long way from OAS.


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## gibor365 (Apr 1, 2011)

> Peoples Trust has dropped its regular savings interest rate from 1.60% to 1.45%, and its TFSA interest rate from 2.25% to 2.00% yesterday.


 probably gonna do the same .... 3% taxable is netter than 2% untaxable.... or maybe gonna buy 1 year GIC in PT...still they give 2.45%?


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## james4beach (Nov 15, 2012)

AltaRed said:


> HISA rates are subject to change at a moment's notice, as they would be for any kind of savings account. IF you want to have certainty over a fixed period, buy a term deposit or GIC.


I still remember when people on this board thought I was crazy to buy 5 year GICs at 3.0% interest. They asked -- why on earth would you lock up your money for such a long period of time when interest rates are guaranteed to rise? Or why lock in when the HISA pays nearly the same?

Hopefully now people see why you buy GICs. You can lock in a rate.


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## mrPPincer (Nov 21, 2011)

gibor said:


> probably gonna do the same .... 3% taxable is netter than 2% untaxable.... or maybe gonna buy 1 year GIC in PT...still they give 2.45%?


^1 year GIC down to 2.25% 

(I should have looked before I moved but it probably wouldn't have changed anything, with Tangerine HISA promo currently paying more than a PT 5-yr GIC)


> Tax-Free Savings GIC
> 
> 1 year- 2.250
> 2 year- 2.450
> ...


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## 0xCC (Jan 5, 2012)

Looks like Tangerine has cut now too (from https://www.tangerine.ca/en/rates/index.html):


> Tangerine Savings Accounts
> Tangerine Savings Account	0.80%
> Tangerine Tax-Free Savings Account	0.80%
> Tangerine RSP Savings Account	0.80%
> ...


Edit: PC Financial still seems to be showing a 1.05% rate. I wonder if that will stay that way for more than a week...

Edit2: For Tangerine if you signed up for the pre-July 1 extra secret special 180 day 3% interest rate offer it looks like they have bumped the "additional interest' in the offer to 2.20% to make up for the 0.25% cut in the regular interest rate. So you still get the full 3%. However, if you are only signed up for the extra interest until November 30 on new deposits from July 2 to September 30 the additional interest is still only 1.95% so you only get 2.75% total interest.


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## gibor365 (Apr 1, 2011)

james4beach said:


> I still remember when people on this board thought I was crazy to buy 5 year GICs at 3.0% interest. They asked -- why on earth would you lock up your money for such a long period of time when interest rates are guaranteed to rise? Or why lock in when the HISA pays nearly the same?
> 
> Hopefully now people see why you buy GICs. You can lock in a rate.


You never know what is better.... Until end of December I'm getting 3% in Tangerine .... have already a lot of money there and gonna tranfer there bunch of 1 y GICs that will mature in August.


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## Moneytoo (Mar 26, 2014)

Anybody signed up for this promo from 1Q Bank: 1Q Dream Free Installment Savings Deposit ?

*Product Details*


Term: monthly, 6~36 months
Minimum contribution amount is CAD 10
Maximum monthly deposit amount is CAD 1,000
Target Amount: Choose your own (Max CAD 36,000)
Interest payable at maturity
Premature closure: available

______________________

*36 months is 3.10% if you deposit 90% of your goal*, otherwise it's 3.00%. Never heard of them, it was recommended on RFD Investing forum


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## gibor365 (Apr 1, 2011)

> Maximum monthly deposit amount is CAD 1,000


 What do I need those funny amounts when I have around 150K in Tangerine with 3 %, in August after some GIC mature , it will be more than 200K


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## Moneytoo (Mar 26, 2014)

I'm thinking it might be a good place to save for our daughter's med school loan: she'll need 40K+ after graduation to repay it, so if we save for 3 years and then give it to her to deposit somewhere else for a year - in 2019 she'll be a debt-free doctor


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## gibor365 (Apr 1, 2011)

I don't understand how much interest at maturity you gonna get if you deposit $1000 every months for 3 years (maximum target)?

DId some calcs and got that:
if you deposit max 1K/mo and getting 3.1%, after 3 years you get interest 1696.93 
If you just buy PT 3 years GIC for 36K, you gonna get 2711.35, so if you have cash , I don;t see sense to enroll for Q1


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## Moneytoo (Mar 26, 2014)

3.1% per annum (whatever it is lol)

(We already have 45K+ in People's Trust esavings as "emergency fund", and invest 100K+ in our TFSAs and RRSPs - not yet maxed out, so don't have 36K cash to just buy GICs, but would be able to save in a separate targeted account )


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