Tag Archives: ScotiaBank

Is My Money In Savings Accounts and GICs At Simplii Financial Protected by CDIC Insurance?

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Simplii Financial is the new name for what used to be called President’s Choice Financial. It’s also a somewhat new business and is owned and run by CIBC. Recently I read a question about what kind of CDIC insurance Simplii Financial offered on cash deposits and guaranteed investment certificates so I decided to check.

Be Careful Of the Insurance Maximums If You Have Money at CIBC and Money at Simplii Financial

First, deposits at Simplii Financial are insured by the Canada Deposit Insurance Corporation, CDIC.

HOWEVER, the limit of $100 000 we’re all so used to reading applies to any money you have in that type of account at both CIBC and Simplii Financial, because they are both insured under one policy.

For example,

we have

  • a joint CIBC chequing account
  • a joint Simplii Financial chequing account
  • a joint Simplii Financial savings account

We are only insured up to $100 000 deposited in total in those accounts. If we bought any regular GICs at CIBC or Simplii Financial, those would also be insured only if the total of the 3 bank accounts and all of the GICs was $100 000 or less.

Because CDIC treats your money the same if it’s at CIBC or at Simplii Financial, which is part of CIBC, you may want to make sure you understand the maximums and don’t exceed them if you bank with both institutions.

Are Tangerine and ScotiaBank Accounts Insured Together To One CDIC Maximum Also?

No.

I checked whether this was also the case with Tangerine. After all the Bank of Nova Scotia bought out Tangerine.

But no, they have separate CDIC insurance. So you can reach the $100 000 limit on, say a savings account at ScotiaBank and also reach the $100 000 limit on another savings account at Tangerine and you will be insured separately to the full amount on each of them.

We don’t bank with BNS so we never checked this before. I’m glad I learned about the limits on CIBC/Simplii Financial though. It’s unlikely I’d ever have more than $100 000 in the two banks but better to know now that find out the hard way later that we’re not fully insured!

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Do you keep money at both CIBC and Simplii Financial? Did you know you had to keep the totals across the 2 banks in the different categories under $100 000 each? Please share your experiences with a comment.

 

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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