# Future of ING Direct in Canada



## brad (May 22, 2009)

http://www.theglobeandmail.com/repo...e-of-canadian-uk-online-banks/article4457217/

ING considering sale of Canadian and UK online banks.


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## humble_pie (Jun 7, 2009)

i believe the issue of whether or not ING would or will sell its subsidiary in canada has been permanently alive ever since the parent bank got that huge bailout from the dutch government back in the fall of 2008. Bailout was something like 10 million euro.

i didn't see anything in the news this am indicating that this longstanding issue has taken on any new urgency. So either the reporters have rumours they're not writing about yet or else it's a real slow lazy hazy summer day for business news ...

EDIT: the bailout was 10 billion euro not million


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## PuckiTwo (Oct 26, 2011)

I found the same info on a German-languate Swiss website "finanzen.ch". Here is a rough translation: 
"Amsterdam (awp international) - The by government supported Dutch finance conglomerate ING is considering the sale of its online banking divisions in Canada and Great Britain. With the possible proceeds which analysts estimate about 2 billion Euro, the Dutch (company) wants to pay back further tranches of government support. ING conveyed on Thursday in Amsterdam "We are checking all options for both divisions". With this the corporate group was more precise than in January. At that time the Dutch announced that they would not put banking divisions which belong to their core business to the test. The German subsidiary ING-Diba, which is very successful, will not be affected."
Sorry for the clunky translation. P


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## Square Root (Jan 30, 2010)

I found interesting the points re the UK is also being reviewed for sale and that the ROE on this business was in the single digits. Clearly this is not a very profitable business. In comparison the TD's ROE on their Canadian retail bank is over 40%. Analysts think this would be a good fit for TD,CM, or National. Clearly a matter of time before ING gets absorbed. Would probably go for around book value which is around $1.7 billion CDN


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## brad (May 22, 2009)

The reaction to today's news among ING customers is pretty much along the lines of the reaction in the States when ING US was sold to Capital One. A lot of people are saying they will cancel their accounts immediately if ING is sold, because they assume that any new owner would do away with the "no fees" pledge. There are a hundred or so comments on ING's Facebook page to that effect. Worth noting that even the widely reviled Capital One hasn't imposed any fees on ING accounts in the US, at least not yet. I think it's clear that the only reason those of us who bank with ING do so is because there are no fees, so adding fees would amount to suicide.

I'd be happy if TD bought ING, but we'll see how it goes. They've been completely inundated with phone calls from journalists and customers today.


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## Square Root (Jan 30, 2010)

ING may decide to simply wind the business down if they can only get book for it and customers threaten to leave. Either way with ING gone the other Banks can only do better if that is possible.


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## brad (May 22, 2009)

Square Root said:


> Either way with ING gone the other Banks can only do better if that is possible.


But there won't be much motivation for them to do better -- we're a captive audience with no other choice but to pay their fees (I know there's PCF, but it's not available everywhere). What I like about ING is that it's a bank where I can put my money and watch it grow, instead of shrink. With every other bank you lose money by keeping it in there, or else you have to tie up a significant chunk of change in order to avoid monthly fees. I've saved $280 in bank fees since I switched to ING, and it's been by far my most satisfying banking experience anywhere (Canada or the US).


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## Square Root (Jan 30, 2010)

Brad: I meant better financially from the banks' perspective.


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## Eclectic12 (Oct 20, 2010)

brad said:


> ...(I know there's PCF, but it's not available everywhere)...


I'm not clear on what you mean by it's not available everywhere. 

Their web site lists ten provinces and three territories, where none of the choices results in a "not available" notice. 

The only reference I've found so far is that the wiki page indicates they don't offer business accounts. It also mentions there are no branches but ING Direct did not have branches either so I doubt that's what you mean.


Cheers


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## brad (May 22, 2009)

Eclectic12 said:


> I'm not clear on what you mean by it's not available everywhere.
> 
> Their web site lists ten provinces and three territories, where none of the choices results in a "not available" notice.


It's not available in Québec, which is where I (and 7.8 million other people) happen to live.

If you click on Québec in the map you see an offer for a PCF credit card, which is available, but PCF banking is not. There are workarounds (you have to drive to one of PCF's locations in Ontario and open up an account there), but it's not as simple as signing up online.


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## mrPPincer (Nov 21, 2011)

I think ING got the ball rolling with the high interest, no fee bank accounts, and they probably have a great deal of customer loyalty for that reason, but they have not been competitive for a while on rates.
Right now they offer 1.35% and the competition offers in the neighbourhood of 2%.
http://www.highinterestsavings.ca/chart/


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## andrewf (Mar 1, 2010)

I don't know. PC Financial started in 1996, ING Direct Canada opened in 1997.


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## Cal (Jun 17, 2009)

I am sure they will find a buyer. Most of their business is based on people stashing cash there and getting crappy return. This has to be of interest to an investment bank still looking to improve upon their cash deposits (in regaards to becoming even less leveraged).


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## Square Root (Jan 30, 2010)

Just read an analyst report on this. BNS or National may be the most likely buyers. ROE of about 15% plus cost synergies make it an attractive deal for a Canadian bank. $30billion of deposits represents about 300 bp's of market share which is huge.


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## brad (May 22, 2009)

National (Banque Nationale) would probably be a good fit, in part because ING already uses Banque Nationale's ATM network.


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## kcowan (Jul 1, 2010)

Now that Credit Unions can go national, I wonder if any of them would be interested?


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## Cal (Jun 17, 2009)

Such a simple business plan. Of coarse the big banks are interested.

http://www.theglobeandmail.com/repo...ave-high-interest-in-ing-sale/article4457217/


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## CanadianCapitalist (Mar 31, 2009)

I hope it is not BNS. When they purchased E*Trade, IIRC, the Cash Optimizer Account was among the first casualties.


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## mrPPincer (Nov 21, 2011)

I dunno if it makes much difference which one picks them up.
When Altamira was scooped up by National (Banque Nationale) they slowly went from one of the most competitive providers for a HISA to something in the lower range of all the big banks (1.25% now).
http://www.nbc.ca/bnc/cda/feeds5/0,2726,divId-2_langId-1_navCode-14854,00.html


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## mrPPincer (Nov 21, 2011)

andrewf said:


> I don't know. PC Financial started in 1996, ING Direct Canada opened in 1997.


I guess I was referring to their (ING's) highly influencial ad campaign.
I didn't realize that PC financial was earlier.


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## Eclectic12 (Oct 20, 2010)

brad said:


> It's not available in Québec, which is where I (and 7.8 million other people) happen to live...


Ahh ... so it's a Quebec thing. Canadian Tire bank is the same.

However, this link claims there's about seven other choices for Quebec that might work:
http://www.highinterestsavings.ca/chart/


Cheers


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## brad (May 22, 2009)

Eclectic12 said:


> However, this link claims there's about seven other choices for Quebec that might work:
> http://www.highinterestsavings.ca/chart/


Wow, I had no idea, thanks for that link! I've bookmarked it. However, are all those choices also fee-free, with unlimited transactions per month? If I'm making $20/month in interest on my high-interest savings account but my fees are $10/month, my high interest isn't so high anymore. That's why ING (and PCF) are good deals even if their interest rates aren't the best in town, because you actually get the advertised rate and you don't have to tie up thousands of dollars just to avoid paying fees.


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## mrPPincer (Nov 21, 2011)

brad said:


> thanks for that link!


You're welcome  (scroll up) :biggrin:



mrPPincer said:


> http://www.highinterestsavings.ca/chart/


Each one has different rules.

I use Hubert and AcceleRate.
Hubert has no fees whatsoever and can be linked to multiple other accounts and used as a hub but it has no bank card or chequebook.
AcceleRate allows one free monthly withdrawal, after which it charges $1 per, but you get a bank card which you can use to deposit (free) or withdraw ($1 charge) at any CU and you get a chequebook (no charge for writing a cheque, unlike when using the card to withdraw).

I also have an account with Canadian Tire which I stopped using when they dropped the rates. I think it only allows one free withdrawal per month too, but it can be used as a hub too like Hubert and some of the others.

I keep my day to day bill payments separate from my investment cash in another no-fee, lower interest account.with a fourth institution that also comes with a chequebook and a bank card.

I takes a little research to see which accounts work best for you but I think most people couldn't be bothered to spend the time looking into it.


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## brad (May 22, 2009)

I look at my finances as a whole, so if I'm paying for my chequing account but also have a high-interest savings account, I deduct the cost of the chequing account from the interest I earn in the savings account to arrive at my actual interest rate. That's why ING actually comes out ahead of most other solutions even if its rate isn't the highest, but that of course depends on how much you're keeping in your high-interest savings account. If you keep $100,000 or more in savings you should pursue the highest rate even if you have to pay fees for your chequing, ATM, and debit card use. But if you keep less (e.g. $10K to $20K) in your high-interest savings there's point at which bank fees cut significantlyinto your monthly interest earnings and it's worth pursuing an integrated no-fee solution.

Before ING offered chequing accounts, I used my savings account there to pay for the monthly fees at my regular bank. But that meant I was effectively earning a lower interest rate. Once ING offered no-fee chequing with unlimited transactions (cheques, ATM, debit) I switched banks because it allowed me to earn more.


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## GOB (Feb 15, 2011)

Whoever buys ING will need to keep the business model largely unchanged unless they want most of their customers to switch to PCF or other alternatives. ING customers are much more aware of fees and rates than the average big bank customer, and I doubt they would hesitate to switch. I'll switch if I have to but I'm hoping for the best.


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## 44545 (Feb 14, 2012)

ING Direct offers an interesting flavour of electronic money transfer that competes with Interac EFTs.

ING's email money transfer incurs no cost to sender or recipient but takes one or two business days to move the funds.
Interac's are instant but cost $1 or $1.50 (dependent on institution) for the sender (free to receive) which goes to Interac.

I wonder if the other Schedule I Canadian banks have entered into any kind of user agreement with Interac to not offer a service competing with Interac's EFT. 

It's a small point but one of many that could potentially make ING less attractive after being absorbed by another bank, should that feature be eliminated.


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## Eclectic12 (Oct 20, 2010)

brad said:


> Wow, I had no idea, thanks for that link! I've bookmarked it.
> 
> However, are all those choices also fee-free, with unlimited transactions per month? ....


I've left that for you to find out the full details ... :biggrin:

I was surprised at the list as well as I've known several companies who have avoided Quebec for their full menu of services.


Cheers


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## Eclectic12 (Oct 20, 2010)

mrPPincer said:


> You're welcome  (scroll up) :biggrin:


Yup ... and I missed the link you posted too ... :rolleyes2:

I must have used similar search parameters in the search engine ... or did you have it bookmarked already?


Cheers


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## ddkay (Nov 20, 2010)

Bought by Scotiabank for CAD$3.1B


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## ddkay (Nov 20, 2010)

* Total consideration of CAD 3.1 billion ( EUR 2.5 billion ) in cash
* Expected transaction gain of approximately EUR 1.1 billion after tax at
closing
* Transaction expected to result in capital release of EUR 1.4 billion at
closing
* Positive impact on ING Bank's core Tier 1 ratio of approximately 47 bps


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## Square Root (Jan 30, 2010)

Holy crap. Good for them. I think that was more than some people thought. Wow.


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## mrPPincer (Nov 21, 2011)

re http://www.highinterestsavings.ca/chart/


Eclectic12 said:


> I must have used similar search parameters in the search engine ... or did you have it bookmarked already?


Yes I had that it bookmarked already, and actually was using that site before I came here, & still check their charts regularly to keep an eye on the rates.
I started paying more attention to the CMF site after NorthernRaven had mentioned something about it on the Canadian High Interest Savings Accounts site.
I don't remember how I heard about it now, it could have been G&M or CBC radio, but I share the link to that chart whenever I think it might be relevant.
They've done a good job of keeping track of what and where the best current HISA rates are, as well as the historical rates and when they changed.


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## Jungle (Feb 17, 2010)

Was this a good or bad buy for BNS? After hours stock price is down 2.6% now...


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## MrMatt (Dec 21, 2011)

Jungle said:


> Was this a good or bad buy for BNS? After hours stock price is down 2.6% now...


BNS has various high interest accounts, which are among the best rates in the big banks. They likely have a good handle on how much the ING clients are worth, and could benefit from the ING branding. I think it's likely a positive, but I think they overpaid, of course I don't know the details as well as they do.


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## Toronto.gal (Jan 8, 2010)

Jungle said:


> Was this a good or bad buy for BNS? After hours stock price is down 2.6% now...


There is little BNS does wrong IMHO. The price slide was to be expected.


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## m3s (Apr 3, 2010)

Well so much for "Forward banking". Hopefully BNS doesn't change anything for the worse as they've done with previous takeovers.


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## Barwelle (Feb 23, 2011)

MrMatt said:


> BNS has various high interest accounts, which are among the best rates in the big banks. They likely have a good handle on how much the ING clients are worth, and could benefit from the ING branding. I think it's likely a positive, but I think they overpaid, of course I don't know the details as well as they do.


They'll lose some of that brand power now. They're already planning on a name change.

I've got some money with ING. As long as they keep it simple and no-BS to use (like everyone else is saying), and as long as they keep their rates competitive (which is an area they've lost ground in since I signed up) then I'll leave it there. Who knows, their rates might get more competitive. ING was probably lowering their interest rate to try to help with their debts back home. BNS is more stable so could afford to be more competitive... and would want to be, to stop droves of ING loyalists from fleeing.


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## Square Root (Jan 30, 2010)

it will be interesting how they build a wall around this business so their current customers don't migrate. I guess if they just reduce the rates they pay for old ING accounts that would do it. Then the old ING customets will leave though. I'm going to miss that funny little dutch guy saying" save your money"


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## brad (May 22, 2009)

ING has sent out a pamphlet describing the transition to Tangerine, which starts in April. A few notable things:

1. The pamphlet notes that Tangerine accounts will still "offer great rates without unfair fees. That will never change." If they had just said "without fees" I'd have no worries, but "unfair" leaves open the possibility that they will eventually charge fees that they consider fair. Looks like a loophole, anyway. As always, I think the prudent approach is to stick with them and see what happens; if they start charging fees there aren't many fee-free alternatives available, so as long as their fees are lower than anything else I see little reason to jump ship.

2. ATM access is changing. Starting in May, you'll be able to use Scotiabank ATMs with no fee, including international locations. But starting in September you'll no longer be able to use the Exchange network for free ATM transactions. The closest Scotiabank ATM to me is 3 km away, while the closest Exchange ATM is about a five minute walk. Ugh.

Nothing much else is changing...all accounts will simply change names and you'll receive a new debit card.


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## carverman (Nov 8, 2010)

Square Root said:


> it will be interesting how they build a wall around this business so their current customers don't migrate. I guess if they just reduce the rates they pay for old ING accounts that would do it. Then the old ING customets will leave though. *I'm going to miss that funny little dutch guy saying" save your money*"


What happened to him? He was so serious..."other banks charge you service fees, and you end up with practically nothing...save your money"
....Now it's "agent-orange money" -> tangerine...what's next? 

http://www.youtube.com/watch?v=CczeSlZTxTw


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## fraser (May 15, 2010)

We exited ING (and Ally) when they reduced their rates.

The RBC purchase of Ally makes sense...they bought the car loan portfolio. Not certain why Scotia purchased ING though.

We were not willing to take a 25 percent or so interest reduction in our daily accounts.


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## andrewf (Mar 1, 2010)

Maybe they take turns taking out the competition.


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## gibor365 (Apr 1, 2011)

I exited ING when they reduced rates on Children saving account from 2% to 1.5% , moving all cash from ING to PT (1.8% on HISA and the best GIC rates for 1
- years term) via CIBC (where until march 31 , 1.5%). 
Probably I will leave in ING only US$ acoount and US$ GIC, as PT doesn't offer US accounts


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## liquidfinance (Jan 28, 2011)

I think ING has a safe future. They may not always be as competitive with some of the rates but they will still be a strong alternative to a regular fee based account. 

Scotia = ING
BMO = Club Sobeys
CIBC = PC

As for the unfair fees, I don't see anything wrong with this. Yes they will charge for bounced cheques, drafts etc. They can't say it's a no fee account as you will have to pay for some things which are indeed fair charges.


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## OhGreatGuru (May 24, 2009)

You may have noticed ScotiaBank is rebranding ING Direct as "Tangerine". They're trying to put a positive market spin on it, but I would suspect their purchase agreement of ING (Canada) in 2012 required them to change the name from that of the (former) parent company within a specified period of time.


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## Eclectic12 (Oct 20, 2010)

liquidfinance said:


> ... Scotia = ING


Yes ... though shortly it will be Tangerine.



liquidfinance said:


> ... BMO = Club Sobeys


Does BMO own Club Sobeys? 

I'd have though it was more like:


liquidfinance said:


> ... Loblaws = PC, outsourced to CIBC to run the back end including the ATM network etc.


But I've never seen the details or researched it.


Cheers


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## brad (May 22, 2009)

OhGreatGuru said:


> You may have noticed ScotiaBank is rebranding ING Direct as "Tangerine". They're trying to put a positive market spin on it, but I would suspect their purchase agreement of ING (Canada) in 2012 required them to change the name from that of the (former) parent company within a specified period of time.


I don't think they put a spin on it, really. I remember watching the rollout of the new name and the CEO openly said they were required to change the name as part of the agreement. The parent company was required to sell off its North American businesses as part of the European bailout agreement, and the new companies were required to change their names (which ended up being Capital One 360 in the US and Tangerine in Canada). They've never tried to hide that. For Canada they needed a name that worked in both languages.


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## OhGreatGuru (May 24, 2009)

Perhaps "spin" was a poor choice of words. I meant their current TV ads only talk about how this is a positive image makeover, not that they had to do it for legal reasons. Your comments on the background confirm what I suspected. And I see there is a video clip on their web site that is very up front about where the name change came from.


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## Barwelle (Feb 23, 2011)

The big day has come and gone... Name changed, website redesigned but still basically the same as before, just mere aesthetics changes... savings account interest rates haven't gone up or down (Don't know about the GICs but probably no change there either) that's all I really care about.

or has it gone down even? Wasn't TFSA at 1.55% before? Can't remember, definitely didn't go up though.


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## off.by.10 (Mar 16, 2014)

Barwelle said:


> or has it gone down even? Wasn't TFSA at 1.55% before? Can't remember, definitely didn't go up though.


A little over a month ago, TFSA was 1,4% and regular account 1,35%. These had been the rates since the middle of 2012. Before that, TFSA was 1,6%. Going a little further back, it was 2% with regular account at 1,5%. I suppose the reduced difference might have something to do with the increase of contribution room over the years.

Given that the major banks have caught up with online only, high interest accounts, tangerine isn't as special as it used to be. I certainly wouldn't bother with opening an account if I didn't already have one.


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## gibor365 (Apr 1, 2011)

I know only 1 thing  Children saving account was 2% and last month gor reduced to 1.5%, so I moved all $$$except 10K (for diversification purpose only) to PT


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## Addy (Mar 12, 2010)

Received this email from Tangerine yesterday - great way to earn a few easy bucks switching over your pay or opening an account, plus 2.5% isn't bad at all in today market. It's for a limited time I'm sure, but still worth it if you have a larger sum of cash in a HISA.


******************************************

As you've probably heard, we've changed our name to Tangerine, but we'll never change what we stand for: simple and innovative everyday banking. You'll continue to enjoy all the great reasons you chose to bank with us in the first place – ease, convenience, award-winning customer service and no fees.

Continue getting great rates. And great cash bonuses* too:

2.50% on new savings deposits

+ $50 when you open your first Savings Account

+ $50 when you open your first Chequing Account

+ $50 when you switch your pay


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## Ostracized (Feb 7, 2014)

Thanks for the heads up. I just transferred some more money to my Tangerine account. But they are really not very clear about how this 2.5% interest works. 

"Enjoy a great interest rate of 2.50% on all new deposits made by June 30, 2014 to a new or existing Tangerine Savings Account, RSP Savings Account or Tax-Free Savings Account."

Does this mean that the 2.5% interest ends on June 30th? Or does it mean that the deposits must be made by June 30th and if so the rate will continue thereafter?


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## brad (May 22, 2009)

The fine print is there, you just have to scroll down their web page to find it:

The Tangerine Savings interest rate of 2.50% is available on all net new deposits made between April 8, 2014 and June 30, 2014 to a maximum of $250,000.00, (the “Offer”) to qualifying Tangerine Savings Accounts (Savings), Tangerine Retirement Savings Accounts (RSP Savings), Tangerine Retirement Income Fund Savings Accounts (RIF Savings) and Tangerine Tax Free Savings Accounts (TFSA Savings). The interest rate, current as of April 8, 2014, is an annualized rate, calculated daily and paid monthly. The Offer and interest rates are subject to change without notice. This rate does not apply to internal balance transfers made between existing Tangerine non-registered Savings and Tangerine registered savings accounts (RSP Savings, RIF Savings and TFSA Savings), including GICs and Tangerine Investment Portfolio. Full details are available at tangerine.ca/bonus150/termsandconditions.

The complete terms and conditions are laid out on that page linked above.


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## humble_pie (Jun 7, 2009)

notice that word *net* in *net new deposits* in the text that brad quotes above.

this means that, if you are an existing client with funds already on deposit, you can't easily withdraw during the promotion period. If you do withdraw, your *promotion deposit* is deemed to be reduced by the amount of the withdrawal.

i once questioned this approach with ING. Oh, i said, i was only withdrawing Old Money, ie funds that were already on deposit prior to the new promotion deposit. See, i said, my New Deposit is still intact, according to FIFO.

ING was nice but firm. Oh no, they said, it's LIFO. If you withdraw funds during the promotion period, they said, you will be withdrawing from the new deposit, so those funds won't be eligible for the promotion rate.

something similar is going on at BMO with their $100k broker promotion, except that it's far more draconian. To obtain the $250 bonus, a client must deposit, in cash or in kind, assets worth $100k into the account & must then hold these intact for at least 6 months. Any withdrawal below $100k will forfeit the entire bonus. This is far more severe than the ING plan.

what about investment income coming into the account from investments made with the 100k, i asked. No, said BMO, you can't withdraw any investment income.

not even investment income coming from old assets already in the account? certainly not, said BMO, if you so much as withdraw one centime then PHHHTT the entire promo bonus will be history.

one could only withdraw if one had overcontributed in the first place, said BMO. The system will net new deposits vs withdrawals during the 6-month period following inscription & the system will eliminate bonuses for all clients whose net new deposits drop below $100k, said BMO.

please don't even think of asking me what happens if client deposits stock worth $100k into BMO account but then the stock declines in value below the threshhold. Ask BMO instead.


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## andrewf (Mar 1, 2010)

When Questrade was running a similar promotion, they explicitly said that as long as net contribution was $100k, you would remain eligible for the promotion, even if the assets later fell in value.

I really don't blame these companies for using this approach. They are trying to drum up business inexpensively. Giving people a slightly higher rate for 60 days in the hope that they would forget/be too lazy to move it back after the rate dropped back to their regular, uncompetitive level. If they let people deposit 'new' funds and withdraw 'old' funds, people could just withdraw their entire account and redeposit it and get the promotional rate, while the FI gets no net new assets.


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## brad (May 22, 2009)

The timing of this offer is good, though, as lots of people (myself included) who are expecting tax refunds can put them in here and earn a bit more than usual for a while.


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## bgc_fan (Apr 5, 2009)

PC Financial has this type of promotion almost on a semi-annual basis. Basically they compare your daily balance to the daily balance of the day before the promotion starts. I.e. Starts on 1 April to 30 June, you get the bonus interest on your balance that is above the 31 March balance. If it falls below, you just get the normal interest rate for that day.


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