Category Archives: Money Tips

Investing in GICs at the Banks an Exercise in Anger Management to Optimize Earnings

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Before we opened a self-directed online brokerage account, we invested in GICs directly through various banks. Unfortunately, it was often an unpleasant experience. Here are some ways to improve your earnings on GICs if you must continue to invest directly at the bank.

Written: 2012
Reviewed: 2023
Revised: 2023

Why We Invest in GICs
I admit we have a large amount of our RRSP savings in GICs.

I’ve heard the arguments against GICs. I know that during low interest times GICs don’t earn enough to keep up with inflation. Tough. For us, we need the security of a chunk of change that is safe from theft, earning a small rate of return and guaranteed not to lose any value except that lost due to inflation.

Investing in GICs at the Bank an Exercise in Anger Management

The Annoyance of Automated Re-investment of GICs
One of my longest-time grievances with banks is the way they handle maturing GICs. Most banks I’ve dealt with rollover GICs into a new term at maturity unless you advise them otherwise.

One bank used to make it fantastically difficult for me to not have them rollover. They’d insist I had to visit my branch 2 weeks before maturity to change the instructions. Not three weeks before! Not one week after! Then they often lost the instructions. I had to get customer service reps to fight with the data processing centre to correct the errors. It was an unpleasant hassle.

Another bank also drove me nuts. A few years ago they had a program that increased the term when renewing a GIC at maturity, without my permission. To be fair it was selecting the GIC with the best average annual return over the life of the product. But I don’t want to lock in for longer terms without consultation and review.

This other bank would advise by mail two weeks ahead of renewal what they were going to do, but it was still annoying to have to call and advise them not to. And if I forgot, we could get locked in for a long time (up to 5 years!) to a product I didn’t want.

Luckily, some of the online banks are letting you choose and change your instructions for maturity between renew and cash out by just clicking on a drop-down list.

The Aggravation of Negotiating an Interest Rate for Individual Guaranteed Investment Certificates

Another major irritation was these major Canadian banks did not automatically give you the best rate on a renewing GIC. GICs automatically renewed at the posted rate. You had to call and beg or threaten to take your business elsewhere to get a 0.25% to 0.5% increase in the rate. Since every dollar earned in interest in an RRSP is one less dollar that needs to be earned by working, it’s worth fighting for the best rate. But it’s annoying to need to do so.

With BMO, CIBC, ScotiaBank, TD and the Royal Always Call to Negotiate the Best Rate

With the big 5 Canadian banks, the posted rate is less than the rate you can get by asking for an increase. These banks know that most people will not bother to pick up the phone to get 0.1-0.5% more interest on their GIC investment.

It’s too bad that they are right.

In 2012, it was very easy to get a 0.25% increase in the rate just by asking. That means another $25 on an investment of $10 000. Every year. That’s $250 in 10 years. Not counting any compounding on the previous years’ extra $25s.

So for a 5 minute phone call, you earned $25. Unless you have an amazing job, you likely don’t earn $300 an hour. ($25 per 5 minutes = $300 per 60 minutes) Making the call to get the higher rate pays well.

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Join In
Are you annoyed with the renewal policies for GICs? Do you hate having to phone the bank to argue about the offered interest rate? Please share your opinion with a comment.

It’s not the $2.26. It’s the Ripoff and the Garbage: How to Get a Refund by Politely Complaining

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It’s not that I can’t afford $2.26. I’m sure I’ve spent that much at the dollar store on treats that were consumed before we finished walking home. It was the frustration of false advertising that led me to try to get a refund by complaining politely.

Written: 2012
Reviewed: 2023

The other month at Dollarama, I pointed out to my husband that they had sturdy plastic trays meant to be snapped on the back of an iPad similar to the ones at the computer store. The only noticeable difference was they cost only $2 each. They also had padded neoprene sleeves for iPads.

So on another trip to the store, he bought one of each.

The neoprene sleeve fits fine. Thanks, Dollarama!

The plastic clip on protector, however, did not fit at all. It was packaged as being for an iPad 2, but it wouldn’t clip on. It also would not fit our older iPad.

Dollarama, at least the store we purchase from, has a no refunds and no exchange policy. So we had spent $2.26, including tax, on a heavy piece of plastic that would have to go in the garbage. I was very annoyed.

Past experience has taught me, though, that a polite complaint can often work wonders.

So I wrote a letter to Dollarama explaining what we had bought, why we couldn’t test it before buying it (packaging), and why we couldn’t simply take it back for a refund. I mentioned that basically it’s false advertising to sell a product that does not and can not do what it says it will. And I asked for my $2.26 back. I offered to take the item back to the store, if they wanted it for quality assurance purposes, or to prove that I was telling the truth about the defect.

Then I went on to the internet and found the Dollarama website. It gave an email address to Contact Us. I sent an email copy of my letter to that address.

In two days, they had agreed there was a problem. They sent me a gift card to compensate the $2.26. In fact, they actually sent a gift card for more than that amount. Since we only wanted our own money back, we used the balance to buy some items for the charity Mitten tree at school.

I’d like to thank Dollarama for resolving this issue promptly and properly. I’ll continue to shop there.

And I’d remind people that politely complaining by presenting the facts and stating what would fix the problem can resolve many problems.

How to Get Your Complaint Resolved Successfully

Provide a detailed complaint. Include the

  • date the problem occurred
  • location
  • what you expected to get
  • what you actually received
  • why it was unacceptable
  • what you did to try to resolve the problem, including who you talked to and when
  • receipt or other proof of the interaction

Explain what you would like done. Include

  • whether you wish to receive money back, and if so, how much; or
  • whether you wish to receive a replacement for a defective item; or
  • whether you wish to schedule another attempt at a service

Have reasonable and realistic expectations.
I wanted my $2.26 back. I didn’t expect to get $100 and an iPad.

If the food was poor at an all-included vacation destination, you might expect to get back part of their cost for the food portion of your holiday. You can’t expect to get back the cost of eating all of your meals, at full retail price plus tip, at another location. Well, you can expect it, but I doubt you would get it.

Provide Your Contact Information
If you want a refund or other compensation, you will need to provide your full name and address.