I’ve recently been trying to help an elderly GIC investor get the best possible returns on her money. While investigating different options, I discovered that the institutions offering the best rates aren’t accessible from BMO Investorline.
BMO Investorline allows investors to hold GICs from banks other than BMO in an Investorline account. They offer 15 different choices with 3-year GIC rates up to 2.3% and 5-year GIC rates up to 2.95%. As long as they are all covered by CDIC, it’s not clear why anyone wouldn’t just choose the highest rate available.
However, a Google search on “GIC rates” turned up 3-year GIC rates up to 3% and 5-year GIC rates up to 3.45%. This is a gap of 0.7% and 0.5% from the best rates available through Investorline.
In every case, the rates in the Investorline list were as good as or better than the rates shown in the search. It’s just that Investorline didn’t offer GICs from the institutions with the best rates.
Here is a list of the institutions that offered 3-year GIC rates better than the best available through Investorline:
3.00% ACCELERATE FINANCIAL
2.90% ACHIEVA FINANCIAL
2.90% OUTLOOK FINANCIAL
2.60% STEINBACH CREDIT UNION
2.58% BANK WEST
2.55% ICICI BANK CANADA
2.50% PARAMA CREDIT UNION
2.50% STATE BANK OF INDIA (CAN)
2.35% EFFORT TRUST
This raises the question of why Investorline doesn’t offer GICs from these institutions. Are they covered by CDIC? Maybe they don’t offer Investorline a commission for bringing in business. Maybe some of these institutions consider GICs to be loss-leaders to bring in other business and they’re not interested if the customer is essentially retained by Investorline.
My search continues for some way to get good GIC rates from different banks without having to open separate accounts with each bank.