Where Can I Get a Good or at Least Decent Rate on a GIC for my RRSP?

With the stock market pundits forecasting that THIS time it really is the end of the world, many people don’t want to put their RRSP money into a stock, mutual fund or ETF at least not yet. Leaving aside the arguing about whether it’s actually a great time to buy since prices are low, I decided to look and see what rates are available for a RRSP guaranteed investment certificate, GIC, and whether they are good, decent or awful.

Big Banks Do Not Often Offer Great RRSP GIC Rates

Sometimes one of the big Canadian banks will surprise me by offering a good rate for a RRSP GIC. Not this year though.

BMO has 0.85% for a one-year term or 1.25-1.5% for a 5-year term.

CIBC has a bonus rate RRSP GIC at 0.9% for a one-year term or 1.3% for a 5-year term.

Scotiabank has a 1-year at 0.9% and a 5-year term at 1.5%.

TD has a 1-year term GIC at 0.85% and a 5-year term at 1.5%.

Royal has a 1-year term GIC at 0.9% and a 5-year term at 1.5%.

None of these are cashable before maturity. There may be other terms and conditions so be sure to read carefully before you lock up your money in any GIC.

Remember banks often have some discretion about setting their rate. Ask if you can get 0.5% more. They will probably say no, but they might offer 0.25% just for asking.

E-Banks Offer Better RRSP GIC Rates

There was a time when ING Direct operated in Canada and they used to offer some quite nice rates for GICs. Now the former company is called Tangerine and is owned by Scotiabank, and the good rates seem gone.

Tangerine is offering a 1-year term GIC at 1.2% and a 5-year term at 1.9%. Better than the “big banks” but still not great.

PC Financial, which is owned by CIBC, is offering a one-year term GIC at an APY of 1.2% and a 5-year at 1.9%. Yes, that’s the same as Tangerine.

There are some smaller, newer e-Banks though.

Oaken Financial, which is controlled by Home Trust, is offering a one-year term RRSP GIC paying 1.95% and a 5-year term paying 2.5%. That 2.5% is the same amount offered for a 2-year term by Zag bank but you’re earning it for more years. In case you’re interested a 2-year term is 2.1%.

Zag Bank, which is run by Desjardins, has a 2-year term RRSP GIC paying 2.5%. You have to invest before June 1 2016. For a 1-year term GIC, their rate is 1.05% and for a 5-year GIC their rate is 1.90%. So you can see the 2.5% 2-year rate is definitely a lure.

EQ Bank isn’t offering RRSP GICs at this time.

Where Should I Buy My RRSP GIC in 2016?

So none of these places is offering a great rate for a RRSP GIC.

Personally, I’d seriously consider Oaken Financial for a one-year term RRSP GIC.  I’ve been using their services for over a year for GICs for part of our emergency fund and I’ve been pleased with the service. (By the way, I get nothing from Oaken if you buy one. I’m a customer not someone with a business connection to them!)

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Comparing Canadian to US Dollar Cash Exchange Rate Options

A reader was checking recently about how to use Tangerine to buy USD and then transfer them to another bank to withdraw the US cash. It made me realize it’s been a while since I compared exchange rates offered by various banks. Now that Scotiabank owns Tangerine (formerly ING Direct) does it still offer a reasonable US dollar exchange rate or not? Here’s a comparison of some US dollar exchange rates. Continue reading