6 ways On How To Beat The Bank on GIC Rates

6 ways On How To Beat The Bank on GIC Rates

Buying investment products such as the Guaranteed Investment Certificate is not an ordinary shopping trip and it is therefore important to see and fill some paperwork in order to ascertain that it is the right investment portfolio. Financial institutions may not always offer the best GIC rates and therefore customers always have some bargaining power. Here are some important tips that will always keep you ahead:

  1. 1. Get intervention by a deposit broker

Deposit brokers offer clients with the advantage that they can obtain a variety of interest rates provided by many firms as opposed to dealing with a single firm selling its products. In a study conducted, it was established that clients who use brokers are able to obtain a 1.29% higher rate than when they work without. In addition, the deposit brokers are paid by GICs issuers such that clients pay no fees. Furthermore, they are able to handle all the paperwork for clients.

  1. 2. Go online for research and comparisons

It is convenient yet unnecessary to walk into banks and buy GICs without prior knowledge as the best rates are not guaranteed. Comparisons of many financial institutions GIC rates can easily be done online on various websites and financial media sites. One such a website is Cannex Financial Exchanges that provides rates for more than 50 financial institutions.

  1. 3. Seek smaller banks

Smaller banks and generally other financial institutions will offer better and higher GIC rates than bigger ones. Examples of such banks include Equitable bank and Oaken financial. Such banks need more deposits from customers as opposed to the large banks because of scarcity and therefore entice clients to open accounts with them. Such banks also have the advantage that they don’t have to pay the commissions.

  1. 4. Seek negotiations by oneself

This is usually well applicable in case an individual is well aware of whatever they are doing. Usually, for experienced individuals with knowledge on the prevailing interest rates and banking conditions. Such individuals can buy GICs through online discount brokerages. Such provisions ensure that the individuals are not manipulated whenever they walk into banks.

  1. 5. Research and seek assistance and advice

This is an important step in ensuring that you obtain the best interest rates without manipulation. Research can be conducted on financial websites and other financial journals. Advice can be sought from competent and trustworthy financial advisers that should elaborately outline the benefit-risk ratio of any financial institution.

  1. 6. Laddering investments

Laddering investments mean staggering maturity dates of investments. A client will buy fixed income investments with different maturity dates. While they may not necessarily help with the rates the client is guaranteed cash each year without incurring penalties for distribution.

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It is therefore important that clients have such information before proceeding to banks in pursuit of GICs. Such considerations prevent manipulation by some financial institutions seeking for more returns at the expense of their customers. The key point is information, and while it may be almost difficult to beat banks on rates, it is important that clients obtain the value for their money.