Tag Archives: BMO

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

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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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Have you found some place offering a better RRSP GIC rate? Please share your victory with a comment.

How to Buy a GIC at BMO InvestorLine with the New (2015) Fixed Income Investment Screens

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When one of the GICs in my children’s RESP matured recently, I decided to re-invest the money in a new 1-year-term GIC. Since the last time I bought a GIC, BMO InvestorLine has re-designed their fixed income investment screens so the procedure has changed: here’s how I bought the guaranteed investment certificate.

Buying a Guaranteed Investment Certificate at BMO InvestorLine

  1. Sign in to your InvestorLine account.
  2. From the drop-down list at the right side of the screen, make sure you are looking at the information for the account within which you want to buy the GIC. For example, I made sure it was our RESP account, not my RRSP account.
  3. Hover the cursor on the Trading tab and from the list, click on Fixed Income.
  4. Click on the blue View GIC Offerings button.

GIC Offerings Page

The GIC Offerings screen has become much more complicated. Down the left side of the screen are the choices:

  • Quick Picks
  • Cashable
  • 1 year
  • 2 years
  • 3 years
  • 4 years
  • 5 years

And across the top of the data are tabs for:

  • Annual Pay
  • Compound
  • Semi-annual Pay
  • Monthly Pay

I wanted to buy a 1-year annual pay GIC, so from the list on the left side of the screen, I clicked on the 1 year box, then clicked on the Annual Pay tab.

Although I had not requested to see Cashable GICs, I notice three BMO cashable GIC products lead the list. All the other listed GICs are N/A for Cashable. In other words, they cannot be cashed before maturity.

Fortunately, BMO InvestorLine still lists the GICs in order from highest paying to lowest (if I ignore the BMO cashable products.)

Click on the name of the company offering the rate you want. For example, I clicked on Home Trust Co.

GIC Order Entry Page

The familiar GIC Order Entry screen opens.

  1. In the Amount box, type how much you want to invest in this GIC with a minimum purchase of $5000 in a RESP.
  2. Ensure the interest rate and payment terms you want are the ones beside the selected radio button.
  3. In the Daytime Phone Number box, type where you can be reached.
  4. Click on the button: Review Order
  5. Read the disclosure statement that warns you that BMO InvestorLine gets a commission from the sale. (You do not pay this separately. It is built into the lower interest rate you are getting for the GIC. So you will get the interest rate advertised and they will get some $$$ from the vendor.)
  6. Click on the Continue button if that’s ok.

The GIC Order Review Page

  1. Review the details of your request.
  2. If it all looks good,
    Type your trading password in the field: Please enter your trading password to submit this order:
  3. Click on the button: Submit Order

GIC Order Confirmation Page

Make a note in a secure location of the Order Reference Number in case of any problems.

As usual, your Cash Balance does NOT immediately reflect your purchase.

You’re done!

Does the New BMO InvestorLine Fixed Income Process Work Better for GICs Than the Old One?

Personally, I didn’t find it any easier. In fact, it took a few more clicks to get started with the purchase. It does look prettier, though. I’m glad they still show the GIC interest rates in the useful format of highest to lowest with no required clicks.

Overall, I’d rate the change as neutral, neither better nor worse, for GICs.

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Do you buy GICs in your RESP to keep the cash safe during the last few years before the educational institute gets it all? Please share your strategy with a comment.