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Discussion Starter #1
This is a question that I've been wondering for the longest time.

Why is the 1 year GIC rate, the same rate as the investment savings account?

Isn't the overall return the same?

If they are the same, there is no reason to lock in my money into a GIC when I expect the interest rate to stay the same or rise within 1 year.
 

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The last bit is important. ING could cut their savings account interest rate tomorrow, while the GIC is guaranteed to pay 2%. I'd also stick with the savings account though--the liquidity offsets the risk that they may cut rates.

Also note that the BoC has raised rates by 75 bps but savings accounts rates haven't budged.
 

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Isn't the overall return the same?

If they are the same, there is no reason to lock in my money into a GIC when I expect the interest rate to stay the same or rise within 1 year.
What about compounding?
Isn't the savings account compounded monthly and the GIC yearly?
If so, the return on the savings account should be more - assuming no further additions and ignoring tax.
 

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Discussion Starter #5
What about compounding?
Isn't the savings account compounded monthly and the GIC yearly?
If so, the return on the savings account should be more - assuming no further additions and ignoring tax.
That's a good point too. We should be better off with the savings account with the compounding factor.

Ally is really attractive but I don't believe in chasing different interest rates for a small difference especially after you consider taxes. If I didn't have an ING account already, I'd definitely try Ally.
 

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ally has a hisa at 2% which is nice

i have some money at maxa financial which offers 2.20% for a 1 year gic (non-cashable)

one of the best deals out there is something called "roll with the rate" and you can get prime minus .25% so that gives you currently 2.75% for an 18 month non-cashable gic, it is at revelstoke credit union in bc
 

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Revelstoke CU seems attractive, but when I checked it outline the @2/month maintenance fee was a turn off. Not that $2 is a big deal, it's just a personal issue I have with maintenance fees for savings accounts.
 

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since i am over 60 i get free checking but i bought gic's w/o any checking account, you don't really need one

you do need to open a share account for $25 which is fully refundable when you leave

i don't know why you would need to pay $2 a month ?

they are nice people
 

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nice people make lots of money. that is why i own shares in their companies...

davext, you may want to consider tax consequences as well. savings are taxed at your marginal rate. the savings account would be the current year, i think the GIC would be in the year they pay you...
 

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The best is the short term GIC's! You actually get a worse interest rate! I emailed them one time to verify I was reading it correctly and they said, I was.
 

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Discussion Starter #11
nice people make lots of money. that is why i own shares in their companies...

davext, you may want to consider tax consequences as well. savings are taxed at your marginal rate. the savings account would be the current year, i think the GIC would be in the year they pay you...
Good point! Thanks.
 
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