Comments on: Look Out Rate Shoppers! http://www.thefinancialblogger.com/look-out-rate-shoppers/ This is where your finance takes place Thu, 09 Feb 2012 04:02:52 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: The Financial Blogger http://www.thefinancialblogger.com/look-out-rate-shoppers/comment-page-1/#comment-6882 The Financial Blogger Thu, 10 Sep 2009 00:28:27 +0000 http://www.thefinancialblogger.com/?p=1897#comment-6882 You have a good point. But still, the spread is pretty small considering all their expenses (branches, network, computers and my salary! hahaha!) You have a good point. But still, the spread is pretty small considering all their expenses (branches, network, computers and my salary! hahaha!)

]]> By: Customers Revenge http://www.thefinancialblogger.com/look-out-rate-shoppers/comment-page-1/#comment-6880 Customers Revenge Wed, 09 Sep 2009 20:49:49 +0000 http://www.thefinancialblogger.com/?p=1897#comment-6880 Except that banks don't need to keep 100% reserves, so they can make those 3.59% mortgages maybe 10 times = 35.9% from the 3.85% CD. Not a bad deal being able to fabricate money like that. Except that banks don’t need to keep 100% reserves, so they can make those 3.59% mortgages maybe 10 times = 35.9% from the 3.85% CD. Not a bad deal being able to fabricate money like that.

]]> By: The Financial Blogger http://www.thefinancialblogger.com/look-out-rate-shoppers/comment-page-1/#comment-6791 The Financial Blogger Wed, 02 Sep 2009 13:33:38 +0000 http://www.thefinancialblogger.com/?p=1897#comment-6791 CR, We are compensated for CD as well. However, they don't offer much profitability anymore. If you look at the latest quarter, most banks made a killing with their trading division while regular banking (spread between CD and loans) is not making as much money as it did. About 6 months ago, I have seen banks giving away 3.85% on a CD for 5 years while offering 3.59% for a 5 years mortgage... negative spread... interesting isn't? CR,
We are compensated for CD as well. However, they don’t offer much profitability anymore.

If you look at the latest quarter, most banks made a killing with their trading division while regular banking (spread between CD and loans) is not making as much money as it did.

About 6 months ago, I have seen banks giving away 3.85% on a CD for 5 years while offering 3.59% for a 5 years mortgage… negative spread… interesting isn’t?

]]> By: Customers Revenge http://www.thefinancialblogger.com/look-out-rate-shoppers/comment-page-1/#comment-6787 Customers Revenge Tue, 01 Sep 2009 14:14:05 +0000 http://www.thefinancialblogger.com/?p=1897#comment-6787 You would think that the bank should love CD investors. They deposit their money in the bank for 5 years, accept a pitiful interest rates, and allow the bank to use their deposit to make some real money by lending it back (perhaps to the same customer) at a much higher rate. In fact, I'm a little surprised that you wouldn't be compensated for selling a CD and therefore consider it "easy money". I'm not even sure if there is easier money for the bank. As long as you offer the advice, if the customer won't take it then at least you've made contact and you can make a commission. I checked a couple of banks and personal deposits+personal loans make about half the total profit for a bank. Banks probably love CD shoppers. You would think that the bank should love CD investors. They deposit their money in the bank for 5 years, accept a pitiful interest rates, and allow the bank to use their deposit to make some real money by lending it back (perhaps to the same customer) at a much higher rate. In fact, I’m a little surprised that you wouldn’t be compensated for selling a CD and therefore consider it “easy money”. I’m not even sure if there is easier money for the bank. As long as you offer the advice, if the customer won’t take it then at least you’ve made contact and you can make a commission.

I checked a couple of banks and personal deposits+personal loans make about half the total profit for a bank. Banks probably love CD shoppers.

]]> By: The Financial Blogger » Blog Archive » Credit card perks ups and downs - why business relationships have to be fair http://www.thefinancialblogger.com/look-out-rate-shoppers/comment-page-1/#comment-6637 The Financial Blogger » Blog Archive » Credit card perks ups and downs - why business relationships have to be fair Tue, 18 Aug 2009 10:02:26 +0000 http://www.thefinancialblogger.com/?p=1897#comment-6637 [...] last week, Mike had this post about watch out rate shoppers. He mentioned how he hated it when rate shoppers called him “just for a rate”. What [...] [...] last week, Mike had this post about watch out rate shoppers. He mentioned how he hated it when rate shoppers called him “just for a rate”. What [...]

]]> By: The Financial Blogger http://www.thefinancialblogger.com/look-out-rate-shoppers/comment-page-1/#comment-6548 The Financial Blogger Thu, 06 Aug 2009 10:30:23 +0000 http://www.thefinancialblogger.com/?p=1897#comment-6548 Finance Matters, I agree with you, I also work with a broker when it is the time to build a CD ladder. however, I never call him when a client is only "looking for a rate". We like doing investment strategies, not taking orders ;-) Finance Matters,

I agree with you, I also work with a broker when it is the time to build a CD ladder. however, I never call him when a client is only “looking for a rate”.

We like doing investment strategies, not taking orders ;-)

]]> By: The Financial Blogger http://www.thefinancialblogger.com/look-out-rate-shoppers/comment-page-1/#comment-6546 The Financial Blogger Thu, 06 Aug 2009 10:21:48 +0000 http://www.thefinancialblogger.com/?p=1897#comment-6546 IS, this is why I wrote: "Don’t get me wrong; I think you should shop around once in a while to make sure your advisor is on the ball and offers not only a good service but competitive rates." looking at the market to make sure you get a competitive offer is a great idea. But in the end, you get what you pay for... even in banks. So if you are looking for the ultimate rate, this is all you going to get. No wonder mortgage brokers will ship you loan anywhere in your states even if it's at 300 km from your house.... it was the best rate offer ;-) IS,

this is why I wrote:
“Don’t get me wrong; I think you should shop around once in a while to make sure your advisor is on the ball and offers not only a good service but competitive rates.”

looking at the market to make sure you get a competitive offer is a great idea. But in the end, you get what you pay for… even in banks. So if you are looking for the ultimate rate, this is all you going to get. No wonder mortgage brokers will ship you loan anywhere in your states even if it’s at 300 km from your house…. it was the best rate offer ;-)

]]> By: IS http://www.thefinancialblogger.com/look-out-rate-shoppers/comment-page-1/#comment-6545 IS Thu, 06 Aug 2009 09:17:50 +0000 http://www.thefinancialblogger.com/?p=1897#comment-6545 TFB, don't you think thatt investors that do not shop around will usually end up with lower rates?? TFB, don’t you think thatt investors that do not shop around will usually end up with lower rates??

]]> By: Finance Matters http://www.thefinancialblogger.com/look-out-rate-shoppers/comment-page-1/#comment-6540 Finance Matters Wed, 05 Aug 2009 17:17:16 +0000 http://www.thefinancialblogger.com/?p=1897#comment-6540 I spoke too soon. Manuife just dropped the % year ladder rates to 2.75%. I spoke too soon. Manuife just dropped the % year ladder rates to 2.75%.

]]> By: Finance Matters http://www.thefinancialblogger.com/look-out-rate-shoppers/comment-page-1/#comment-6535 Finance Matters Wed, 05 Aug 2009 14:07:38 +0000 http://www.thefinancialblogger.com/?p=1897#comment-6535 If they were smart they could come to GIC Financial where I work. One of our major advantages is our ability to act as brokers for GIC 's, we have access to the "best" rates from all the CDIC insured financial institutions, therefore we can do the legwork for the client. Like you, I usually suggest a laddered approach. For instance Manulife offers a 5 year GIC ladder that has an annual 3% yield, each year 1/5th comes due and hopefully this can be renewed at a higher rate when rates start to move up. If they were smart they could come to GIC Financial where I work. One of our major advantages is our ability to act as brokers for GIC ‘s, we have access to the “best” rates from all the CDIC insured financial institutions, therefore we can do the legwork for the client. Like you, I usually suggest a laddered approach. For instance Manulife offers a 5 year GIC ladder that has an annual 3% yield, each year 1/5th comes due and hopefully this can be renewed at a higher rate when rates start to move up.

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