[stephenheath]

My discount broker has added the ability to buy high interest GIC's from other institutions directly, and the rates are much better than what I've been getting at the big 5 while setting up my GIC ladder (which is the fixed income part of my savings, I personally don't like bonds).

I know when I buy the GIC directly from the big 5, it's CDIC insured (up to the $100k limit), but if I buy it through a discount broker (and the issuer is CDIC insured), is the actual GIC still insured through CDIC (assuming < $100k at that issuer total)? Secondly, if the discount broker happens to go under, is the GIC covered by CIPF?

I just want to be sure that in either circumstance, the GIC issuer going under or the discount broker going under, we'd get the principal back, otherwise I'm going to leave the GIC's at the big 5 and consider the rate differential guarantee insurance

 

[stephenheath]

I'd like to go with the ones with the highest rate, that's why I'm interested in using this new service... the broker-accessible GIC's are on average .25%-.55% higher than what the big banks are offering (and I'm assuming that spread will increase when we get back to thd old days of higher interest). I'm just not prepared to trade off the guarantees against default for that little extra return.

 

[stephenheath]

The CIPF isn't guaranteed by the government either but we buy stocks, and if I understand them, the credit union guarantee is basically the same thing... contributions from the members... that said, there are some CDIC insured members offering the same rates as the Manitoba credit unions, so personally I'd go with the stronger CDIC coverage all else being equal.

I talked to Qtrade, and they indicated that the CDIC coverage would still apply even if they bought it on my behalf, and it would count towards my $100,000 limit not theirs. They didn't quite answer exactly that the CIPF would cover my GIC's the same way they would cover my stocks if something happened to Qtrade, but I can't really imagine that it wouldn't.

 

[stephenheath]

I hadn't seen a Manitoba credit union at 4%... the ones I knew (Outlook, Acheiva) were offering 3.85% for 5 years. Yesterday was showing one matching it, today the best are two offering 3.8% for 5 years, NatCan Trust and National Bank. Upon researching it turns out National Bank owns NatCan Trust so really it's just the one institution, but either way both are listed as covered by CDIC.