The GIC market is now split by term, with the best rates moving in different directions.DevonYu/iStockPhoto / Getty Images
Canada’s deposit market is showing a more uneven pattern this week. The best one-year GIC rate eased, two- and three-year rates held firm, the top five-year GIC rate climbed, and promotional savings rates moved higher.
The GIC market is now split by term, as the best GIC rates move in different directions. The best one-year GIC rate – on offer by Achieva Financial – has fallen to 3.6 per cent from 3.65 per cent last week. The best two-year GIC rate, again from Achieva, is unchanged at 3.80 per cent. The top three-year GIC rate is also unchanged at 3.80 per cent, though EQ Bank is now at the top and HomeEquity Bank close behind at 3.79 per cent.
The exception is the five-year term. The best five-year GIC now pays 4.05 per cent from Wealth One, up from 4.00 per cent last week. That increase stands out because WealthONE substantially reduced its short- and medium-term GIC rates, dropping off the leaderboard for those terms while moving ahead in the five-year category.
The comparison with insured fixed mortgage rates is also becoming more interesting. The best three-year GIC rate of 3.80 per cent remains below the lowest fixed mortgage rate of 3.89 per cent for three years, a gap of nine basis points. (There are 100 basis points in a percentage point.)
But the relationship reverses at five years: the top five-year GIC rate of 4.05 per cent is six basis points higher than the lowest five-year fixed mortgage rate of 3.99 per cent.
Rates on savings accounts are also moving, mainly through promotions. The best promotional savings account rate is now 4.65 per cent from Bank of Montreal for four months, above last week’s 4.60-per-cent ceiling set by Royal Bank of Canada and Canadian Imperial Bank of Commerce for three months.
Royal Bank of Canada and Canadian Imperial Bank of Commerce have held their rates, which now sit just below those from Bank of Montreal, while Simplii Financial, raised its offer by 10 basis points. Simplii’s five-month promotional window arguably makes it the better value in that tier.
Standard savings rates, by contrast, remain unchanged: Saven Financial leads at 2.85 per cent, followed by Oaken Financial at 2.80 per cent.
For savers, the message is no longer simply that rates are stable. The market is becoming more selective. Banks appear less willing to boost rates across every term, but are still willing to compete for longer-term deposits.
Interest rates are provided by WOWA.ca, which gathers, aggregates and freely disseminates data on mortgage rates, savings accounts, and GIC rates from 50+ Canadian financial institutions.
Sanika Purohit is a writer and content developer at WOWA.ca, a Canadian personal finance platform.
