Q&A With Gordon Pape: Settling A GIC Dispute
Gordon Pape plays mediator in a marital dispute over a change in GIC.
Q – I tried to convince my wife to switch from CIBC to Oaken Financial because CIBC is giving me 1.3 per cent on a GIC for one year non-redeemable and are insured by CDIC. Oaken Financial gives me 2.6 per cent for one year. The inflation rate is 1.60 per cent. Since you are an expert what is your opinion? – George V.
A – Of course 2.6 per cent is better than 1.6 per cent. You don’t need an expert to tell you that. And both CIBC and Oaken Financial are covered by deposit insurance up to $100,000.
But you may not be aware that Oaken is part of the Home Capital Group. If you’ve been paying any attention to the business news recently, you’ll be aware that Home Capital got into deep financial trouble and experienced a classic “run on the bank” with investors withdrawing millions of dollars. It appears the crisis has now passed and Warren Buffett has calmed fears by taking a major position in the company. But some people are still reluctant to put money into Home or any of its subsidiaries, despite CDIC coverage and Mr. Buffett’s optimism. It appears your wife is in that group. – G.P.
Do you have a money question you’d like to ask Gordon? Find out how to submit it here and then check out our Money section regularly to see if it was chosen for a response. Sorry, we cannot send personal answers.