Looks like my highest were these ones, issued before rates were slashedThose who buy GIC, what was the maximum interest rates of 5 year GIC you have seen since 2008?
It depends on interest rates and that is the point of increased interest rates, i.e. to take money out of the system and to do it on a positive real rate of return basis. While corporations can increase prices most of the time due to inflation, their cost of debt climbs as well and their margins get squeezed. They become worse off on a net basis and profits stagnate, if not decline. That makes fund flows to bonds and GICs more attractive.I think we're getting near the point where guaranteed, risk-free returns start to make the risky returns of stocks look bad. In theory, stocks should actually outperform inflation, not just match it, but it's hard to imagine this happening in the short term.
Unfortunately there's also politics at play in this (or maybe that's a good thing?)My take is central bankers are going to have to raise rates considerably more at least temporarily from now through probably 2023 to whack-a-mole the inflation rate.
Depending on when the children will take withdrawals - if they are in the next five years - you could consider matching each annual withdrawal date with a maturing FI instrument and doing away with the ladder altogether. Eg each September a maturing FI security. You would then have a hedging portfolio and return seeking portfolio. The hedging portfolio, being 100% FI and held to maturity would have minimal interest rate risk (only on the reinvestment of the interest payments received). And the return seeking portfolio can be fully optimized for growth (subject to your risk tolerance).We have some RESP money sitting in account from a broken GIC ladder from December. The fund is approximately 50% VEQT 50% fixed. I was going to transfer transfer the funds over to my DIY account and buy VBAL going forward. Now that various quarterly rungs have expired rates have started to climb. I am considering rebuilding the ladder. Will likely put half available cash into a 5 year ladder now and the second half into another ladder in the fall.
Investments | Wyth
The 1 year is now sitting at 3% and the 5 year at 4%. I could likely eek outa .25% by moving institutions but for the difference it isn't worth the hassle.