Oaken Update – May, 2017

High rates plus CDIC coverage: the Oaken advantage

As you’ve probably seen, we have increased our interest rates across all GIC terms over the past few weeks. Current rates can always be found on the rates page of our website, but at the time of this publication, they presently range between 2.60% for a 1 Year GIC and 3.10% for a 5 Year GIC. Our short-term GICs have increased as well, and sit between 2.00% and 2.20% at the moment. These rates are the highest in Canada, by a significant margin, and keep Oaken at the forefront of helping Canadians plant for their future.

It’s also important to keep in mind that all Oaken GICs and savings accounts are guaranteed by the Canada Deposit Insurance Corporation (CDIC). Through CDIC, the Government of Canada provides ironclad protection of savings at any member institution for up to $100,000 of principal and interest per named account, ensuring that your investments remain safe. For example, you may have GICs set up in your name, your spouse’s name and a joint name, making you eligible for up to $300,000 of coverage.

What’s more, our deposits are offered through two separate member institutions of CDIC—Home Bank and Home Trust Company. As such, you can utilize both issuers to further maximize your coverage, and still benefit from the same high rates for all your savings. So using the same example as before, that could mean being eligible for coverage of up to $600,000.

We’re aware that recent events in the market may have caused concern to some of our customers, but nothing has changed our fundamental offering: simple savings with a deposit insurance guarantee that’s backed by the Government of Canada. We have received many messages of support over the past month or so, and would like to thank all our customers for their continued loyalty. We remain committed to always providing you with some of the highest rates available in Canada, together with the peace of mind that comes from our dual membership of CDIC. And that’s the Oaken advantage!


Housing is hot… again

In the March Oaken Update, we highlighted two posts from our blog related to housing, and we thought that would be it for the next little while. However, it turns out we were wrong. That’s because the Government of Ontario unveiled sweeping new housing laws shortly after, which will also have a national impact.

The impetus came from the Toronto housing market. Detached home prices in the Greater Toronto Area in February rose an astonishing 32% over the previous year, and across the rest of southern Ontario by almost as much. Many experts fear that the market has become a bubble, which is bad news for everyone.

Another foreign buyers’ tax

Ontario brought in several new measures to cool the market, with the most prominent being a copy of British Columbia’s foreign buyers’ tax. That tax imposed a levy on foreign purchases of residential homes in Metro Vancouver in August last year, and it had a dramatic impact. Prices peaked in the same month, and then immediately dropped over the rest of 2016.

Ontario seems to be hoping for the same effect. Like B.C., it set the tax at 15% on residential properties. By restricting it to buyers who are not Canadian citizens or permanent residents, the province hopes to discourage speculators who are buying property only for investment purposes. And it cast its net much wider than B.C. did. The Ontario tax not only affects residential sales in the Greater Toronto and Hamilton Area, but also touches communities as far away as Niagara, Peterborough and Barrie.

The impact on interest rates

In a broader sense, it will affect other parts of the country as well. By taking some of the steam out of the Toronto market, this tax may ease worries of the bubble bursting, which is good for consumer confidence across the country. It will also provide some breathing room for the Bank of Canada, if it wants to raise interest rates without triggering market instability.

That aspect of the move is of the greatest significance to most of our customers. If you hold interest-bearing instruments, you likely know that interest rates have been at exceptionally low levels for years now. With growth in the economy and a possible cooling of real estate hotspots, the time may finally come for interest rates to start climbing back up. That would mean a higher return on your savings, which is certainly something to be welcomed.


Your health online

As every doctor will tell you, the internet is not a substitute for personalized medical advice. Nonetheless, all of us go online at some time or another to find answers to medical questions. And that’s not necessarily a bad thing. The internet is full of great sites with reliable, evidence-based information about a whole host of medical issues, many of which don’t require the intervention of a specialist. Good websites can provide reassurance about minor symptoms, or clear up doubts about standard treatments like vaccines or the flu shot.

For anything serious, however, you should always speak to a professional. For example, a common cold is something easy to self-diagnose, and a check on the internet will tell you that it can last for as long as two to three weeks. But once you’ve gone beyond that point, it’s time to see a doctor—not keep searching the internet for “colds that last a really long time.”

First check the source, not the headline

The biggest problem with searching for medical advice on the internet is that there’s an ocean of information that’s unreliable, misleading and downright false. The key to avoiding it when you’re conducting a search is to look at the website address before you look at the result’s headline. By filtering out unreliable sources first, you’ll cure yourself of “confirmation bias”—an ailment we all suffer from that involves selecting information that we already agree with (or want to).

And what are reliable sources when it comes to medical information? Well, there are quite a few…

Government departments:  The gold standard for health information comes from ministries of health. Sites like Health Canada, your provincial health department, and the National Health Service in the United Kingdom. Governments also run many agencies that have their own websites for specialized topics. For example, the B.C. Cancer Agency or the National Institutes of Health in the United States.

Not-for-profit health organizations:  There are many charitable organizations dedicated to fighting diseases or improving our overall health, and they run websites that provide information you can trust. Some examples are Diabetes Canada, the Heart and Stroke Foundation and the Multiple Sclerosis Society of Canada.

Clinics, medical journals and independent organizations:  There are many great sources of medical information on the internet that provide everything from basic information to breaking information. These include famous and respected institutions, like the Mayo Clinic and the New England Journal of Medicine (albeit a bit challenging for the lay reader). There are also purely web-based outlets like WebMd, which is run by the National Institutes of Health, and MedBroadcast, a Canadian site that provides general medical information.


Remember to drop by our stores, for a chance to win!

We always like to give our customers and friends a very warm welcome whenever they come to visit us. Particularly with our dedicated stores in both Calgary and Toronto, it’s great being able to chat about planting for the future—or anything else, for that matter—over an equally warm cup of tea or coffee.

And just a reminder that you could also end up with a great deal more than a tasty beverage and good conversation, just from dropping by! At the end of every quarter, we draw a name from among the many visitors who came along to our stores and entered their contact details. So congratulations to Javed Syed, who showed up at our Toronto store in early January, and went on to become our first in-store winner for 2017. Javed picks up an Oaken GIC for $500, which is a great way to begin the year!


Reading corner

From economic health to personal health, our reading list this month is about keeping your mind in top form…

 

This post is intended for informational purposes only. It is not an inducement to purchase securities and is not to be considered financial advice. Always do your research before making any investment decisions.

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