Tag Archives: guaranteed investment certificates

Is It Safe to Use Oaken Financial for My GICs? Does It Work? How Can I Add a Joint-Owner to a GIC?

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Like many Canadians, I’m a bit nervous letting an “unknown” financial institution handle my money. Still, when I was looking for a place to put our emergency fund into a series of GICs so that one would mature each month for a year, Oaken Financial had the best on-going rates available with the most convenience for me. Still, I wondered if it would be safe to use it, whether it would work, and especially whether there would be any problems when the certificates matured.

What Maturity Instructions Could I Choose for a GIC with Oaken Financial?

When I bought the first guaranteed investment certificate last year, I asked to have the interest and principal paid out to my Oaken Savings Account at maturity. I was a bit nervous because I’d had bad experiences in the past with one of the Big Five Canadian banks not putting those instructions properly on file and my GICs rolling over to new terms and lower rates.

I checked the GIC certificate that Oaken had mailed me, and I checked my certificate details online and both said that the principal and interest would go into my savings account at maturity.

(I could also have asked them to mail me a cheque, or to re-invest the principal and/or interest at maturity.)

Will Oaken Warn Me That I Have a GIC About to Mature?

I was pleased to get a letter from Oaken more than a month ahead of time warning me that I had a GIC coming up for maturity. It offered me the option of changing my instructions for the cash. I left the instructions standing.

Did My Oaken GIC Mature Properly?

Still, it wasn’t till today, when the first certificate matured that I finally knew it would work. Yep, the cash is now in my Oaken Savings Account. Phew!

Will I Use Oaken Financial to Buy My Next GIC?

Yes. I actually am re-investing this 1/12 of our emergency fund today so that it will mature in another year’s time. Our expectation is that if we need this emergency fund, we will need it to pay monthly bills and property taxes etc so we won’t need it all in one chunk: we’ll use it in monthly chunks. I’m keeping a series of 12 GICs, one maturing each month, to keep the money earning some interest, hopefully enough to keep up with, almost, inflation.

What Rate is Oaken Financial Offering for a Non-Registered GIC Today, November 24, 2105?

The current rate for a non-cashable one-year GIC is 1.95%. A cashable is paying 1.75% which is more than most savings accounts. We don’t need to have cash handy here, since we have it elsewhere, so we’ll go with the non-redeemable GIC. The rate for 18 months and more is over 2%.

Adding a Joint Owner to a New GIC at Oaken Financial

This time, when buying a GIC, I wanted to add a Joint Owner, my husband.
I followed  my own instructions for buying a GIC, then clicked Yes when asked if I wanted to add a joint-owner.

The Joint Owner Details Section Opened

  1. I clicked to select Yes for Is the joint owner an existing customer?
  2. I typed in his Oaken Client Number.
  3. From the list of titles, I selected Mr.
  4. I typed in his first and last name in the appropriate text boxes.
  5. I clicked to select No for the question is he a US citizen or US resident for tax purposes?
  6. I typed in an optional email address for him.
  7. I clicked No to answer the question Has his personal information changed?
  8. I clicked No to answer whether I wished to add an additional joint-owner.
  9. I then continued with usual procedure by clicking on the Next button.

If you need to add a Joint-owner to an existing GIC, you could try talking directly to an Oaken Financial support person. I am not sure if it is possible or not.

Are My Oaken Financial GICs Insured by CDIC?

Today, November 24, 2015, they are listed as a member of CDIC and therefore the GICs are secured. It’s always a good idea to check the CDIC status of any institution again just before placing an order in case anything has changed.

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Do you keep your emergency fund in cash or GICs? Where do you stash it? Please share your strategy with a comment.

What’s the Best Rate I Can Get for My Money for 1 to 2 Years from a GIC?

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Previously, I looked at where I could park the money for our next car in a daily interest bank account and what interest rate I might be able to get. Next, I looked at what rates I could see for guaranteed investment certificates, GICs, both cashable and non-redeemable.

What Rate Are the Big 5 Canadian Banks Offering for GICs?

This is tricky to answer because most banks *post* a certain interest rate but you can sometimes get them to offer 0.25-0.5% more if

  • you ask
  • you have $10 000 or more to invest
  • you offer them other business like a mortgage or loan
  • you have been a “long time” client
  • you ask them to price match a competitor’s published or otherwise guaranteed rate

GIC Rates for a 1 Year Non-redeemable GIC

The banks often offer specials and short-term deals. There may be better rates available even an hour after I post this. The purpose is to show readers that the Big Banks generally are not offering as high a rate as the more competitve, more eager for your money, smaller banks.

The posted rates today (November 12, 2015) are

GIC Rates for a 2 Year Non-redeemable GIC

The posted rates today (November 12, 2015) are

  • BMO 1.05%
  • CIBC 0.85%
  • RBC 0.95%
  • ScotiaBank 1.1%
  • TD 0.95%

What Rates Are the Online and Smaller Banks Offering for GICs for 1 and 2 Year Terms

Here are some examples, though, of what other banks are offering. (Again, these were listed on November 12, 2015) These are CDIC insured GICs.

  • Tangerine
    1 Year: 1.2%;
    2 Year: 1.35%
  • PC Financial
    1 Year: 1.095%;
    2 Year: 1.194%
  • Oaken Financial
    1 Year: 1.95%;
    2 Year: 2.1%

You can see why I’m not recommending spending much time trying to get a great rate from a Big Five bank! It’s easier just to buy a GIC from one of the smaller players.

Make Sure Your GIC IS Safely Insured Against Financial Problems at the Issuing Company

Always check before buying though that the institution has CDIC insurance for its GICs.

Some trust companies and credit unions have other forms of insurance. You’d have to decide whether those other forms are reliable enough for you. I figure that if they have CDIC coverage just like the Big Five do, then it’s as good as I’m likely to get.

Why Buy a GIC When a Daily Interest Savings Account Offers More?

Given these very low rates for GICs, it actually makes more sense for me to keep this money in a daily interest savings account with a promotional interest rate! For example, I’m getting 3% right now for my money at Tangerine due to a special offer. I could be getting 2.6% from Zag bank.

There is no benefit to me for locking up my money where I can’t get at it for a fixed term of 1 or 2 years if the GIC interest rate is lower than what I can get on a daily interest savings account!

The only reasons I can think of to buy a 1 year or 2 year non-redeemable GIC right now are

  • if you think that the special promotional daily interest rates will drop below the current GIC rate during the next few months
    I doubt that given some places like Oaken Financial have been offering a steady daily interest account rate of at least 1.75% for over a year.
  • if you think you will spend the money if you can get at it so you want to lock it up where the bank won’t let you touch it until the term is up

For now, I’m going to keep our money in a daily interest savings account but I’ll keep watching the interest rate promotions both for bank accounts and GICs to see whether I should move the money elsewhere.

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Where do you keep cash you’ll need in 1-3 years? Do you shift it to maximize what meager returns you can receive? Please share your strategy with a comment.