The Rise and Fall of GIC Interest Rates
At the beginning of the year, GIC rates were on a downward trend, with the possibility of 5-per-cent returns becoming a thing of the past. However, the summer has seen interest rates on guaranteed investment certificates bounce back. While 5 per cent returns are now attainable, they are no longer considered exceptional for terms of one through three years. The best returns, surprisingly, can be found in GICs with shorter terms.
Competition Heats Up in the GIC Market
Competition in the GIC market is currently fierce, particularly for shorter-term certificates. Banks and online financial institutions are vying for customers’ investments by offering competitive rates. GICs with terms of one and two years can fetch returns as high as 5.6 and 5.65 per cent at banks such as Motive Financial, EQ Bank, and Oaken Financial. The rates offered by these alternative players are similar to what can be obtained from major banks, making it a good time for GIC buyers to consider their options.
Getting the Best Returns on Short-Term GICs
For those seeking short-term GICs, the current competitive climate is advantageous. Rates of 5.6 and 5.65 per cent can be found for terms of one and two years, respectively. It is important to shop around and compare rates from different banks and online brokers. Special offers from reputable institutions may also provide higher returns. Investors should always strive to find the best returns available, but it is worth noting that rates may vary and be subject to change.
Unlocking High Returns: The Benefits of Online GIC Brokers
Online brokers offer an additional avenue for GIC investors to access higher returns. TD Direct Investing, one such broker, recently provided a selection of third-party GICs with rates as high as 5.5 per cent for one year. These brokers work with various banks and can offer rates that may not be available to the general public. Investors who are comfortable conducting their financial transactions online can benefit from this additional option.
Special Offers and Negotiations: Maximizing GIC Returns at Big Banks
Even when dealing directly with major banks, GIC buyers can still find rates exceeding 5 per cent. It is important to look for special offers or negotiate with bankers to secure the best rates. For example, Royal Bank of Canada recently offered a special rate of 5.2 per cent on a two-year term. This rate was compared to a posted rate of 4.25 per cent, highlighting the importance of seeking out special offers or negotiating for a higher rate. GIC buyers should not be afraid to ask for better rates or explore alternatives to secure the best returns.
As interest rates have stubbornly stayed high for GICs, investors have been treated to a summer of opportunities. While 5-per-cent returns have become more attainable, they are no longer exceptional for terms of one through three years. However, the current competitive market has resulted in attractive rates for shorter-term GICs. Online brokers offer a convenient way to access higher returns, while big banks may have special offers or room for negotiation. GIC investors should continue to monitor rates and explore different options to maximize their returns in the current market climate.
Analyst comment
Positive news: The rise and fall of GIC interest rates has resulted in more opportunities for investors. Although 5% returns are no longer exceptional for terms of one through three years, the current competitive market offers attractive rates for shorter-term GICs. Online brokers and big banks may have special offers or room for negotiation, providing additional avenues for investors to maximize their returns. Overall, GIC investors should continue to monitor rates and explore different options to make the most of the current market climate.
