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Old Yesterday, 07:44 PM
 
37 posts, read 9,388 times
Reputation: 20

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Today I went to my bank and invested in a 5 year GIC for a very high amount. I asked the bank advisor/teller(signing officer) which 1, 3 or 5 year GIC's offer the highest interest rate, she responded that their 5 year GIC term will give me the highest interest rate at 2.25% per year and I gave her a cheque. I later found out today online that the same bank offers a 5 year escalator GIC that averages 2.75% per year. She NEVER informed me of that escalator GIC she only informed me of the normal GICs. I phoned today to make an appointment to have that GIC changed to the escalator GIC and shes only available 3 days from now on friday in which I have to sign it in person. My worry is what if the interest rate for that 5 year escalator starts to drop by the time I sign for the change 3 days from now?(as this happened to me before that rates can change even 1 day later). Would they have to honor the 2.75% escalator since she made the mistake and failed to inform me of that higher interest rate GiC in the event it drops to lets say 2.5% or 2% by friday?

My reply would be yes they are responsible to issue me that 2.75% interest rate because the signing officer of that bank made a mistake that they need to correct. Maby I should go there tomorrow in person and sign for the change with another bank advisor but I think they may say that I must wait for the appointment on friday?? I want other opinions on this, thanks because if the interst rate drops by friday and they don't honor the higher rate I may have to file a complaint against this bank for the mistake their advisor/teller made and I would hate to do that.

Last edited by len ren; Yesterday at 09:07 PM..
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Old Today, 02:52 AM
 
73,318 posts, read 73,109,155 times
Reputation: 50926
you need to fully understand what your deal is on these escalator gic's .. they ramp up from very low to the final amount and it may actually be less then getting a fixed rate yearly .

back in august this one was structured like this : you can see year one starts at 1.80%. you don't see the 3.35% offered until the 5th year and you only get it for that one year

5-Year Escalator Term Deposit (Rates effective 2019-08-06)
Rates
5-Year Escalator: year 1 annual interest
1.80%
5-Year Escalator: year 2 annual interest
2.20%
5-Year Escalator: year 3 annual interest
2.40%
5-Year Escalator: year 4 annual interest
2.75%
5-Year Escalator: year 5 annual interest
3.35%
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Old Today, 05:50 AM
 
37 posts, read 9,388 times
Reputation: 20
Quote:
Originally Posted by mathjak107 View Post
you need to fully understand what your deal is on these escalator gic's .. they ramp up from very low to the final amount and it may actually be less then getting a fixed rate yearly .

back in august this one was structured like this : you can see year one starts at 1.80%. you don't see the 3.35% offered until the 5th year and you only get it for that one year

5-Year Escalator Term Deposit (Rates effective 2019-08-06)
Rates
5-Year Escalator: year 1 annual interest
1.80%
5-Year Escalator: year 2 annual interest
2.20%
5-Year Escalator: year 3 annual interest
2.40%
5-Year Escalator: year 4 annual interest
2.75%
5-Year Escalator: year 5 annual interest
3.35%
No, when comparing that escalator you specified while calculating those exact escalating interest rates(or any variation of rates that equals to an average of 2.5% per year as yours does for a 5 year term) to a fixed rate GIC of 2.5% per year for 5 years, the difference at maturity for lets says a $30,000 GIC would be almost the same with the escalator term only making a few dollars less at maturity, thats peanuts in difference you lose at maturity.

BUT the GIC I placed yesterday was at 2.25% per year whereas their escalator averages 2.75% per year, that means I would make around .5% more in interest every year compounded yearly for 5 years. Thats a more than $750 more at maturity. But I also renewed another 30 k term at the same time yesterday for that same 2.25 per year for 5 year term, so if both GIC's were to be changed to that escalator that averages 2.75%, I will make over $1500 more. I hope the interest doesnt drop by friday, and if it does I believe it would be required for this bank to meet that higher interest rate since their bank teller/signing officer made a mistake. I would not have invested in those 2.25% terms had she informed me of that escalator term that averages 2.75% in which she was suppose to because I asked her before signing and giving the cheque which GIC terms offer the highest interest rates for a 1, 3 or 5 year term.

Last edited by len ren; Today at 06:27 AM..
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Old Today, 03:05 PM
 
37 posts, read 9,388 times
Reputation: 20
GREAT, I phoned the bank and she was able to squeeze me in for an appointment today instead of friday after I explained I was worried if the interest starts to drop. The change was made to my GIC's to the 5 year escalators averaging 2.75% per year. Everything worked out. I was just worried if the interest started to drop would the bank be responsible to issue me the higher interest rate that was specified online for sept 10 for the escalator since she forgot to mention that to me when i asked her. It was an honest mistake that can happen. From my understanding I don't think they would be able if the interest rate fell to lets say 2% on friday, but on the other hand they would be responsible to issue me that higher interest term based on what happened and wanted to know what others thought in the event I had to file a complaint. That was the reason for me to post this thread on this forum. Although I got the higher GIC escalator term anyways for the GIC's, problem was solved. Thhhanks.

Last edited by len ren; Today at 03:19 PM..
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