The role of the middleman is to save you money.

This is the case when it comes to purchasing a GIC. You receive a higher interest rate when you purchase through a deposit broker instead of going directly to the bank.

Deposit brokers offer a similar type of service as mortgage brokers – they survey a wide range of financial firms for the best rates available and they handle the paperwork for you. Deposit brokers are paid directly by GIC institutions and their compensation is pegged to the amount invested and the term. Customers of deposit brokers pay nothing out of pocket.

We offer a better rate than your bank

Here’s an example of why consulting a broker is worthwhile. This week, here at Ottawa Asset Management, we are offering one-year GICs at 2.27%. For the same institution, buying a two-year GIC directly receives 2.10%, compared to 2.42% through Ottawa Asset Management.

Walking into your bank of choice to buy your GICs is a sure way to lose potential interest. In general, the bigger brand name banks offer considerably lower rates than credit unions. Most major banks are discouraging one-year GIC purchases by offering rock bottom rates in the range of 0.85%.

A deposit broker will show you the best rates being offered (rates change daily or weekly), and help to ensure that your deposits are properly insured. Another advantage of using a deposit broker is reducing transfer fees on registered funds. Many banks will charge hefty transfer fees ($50,$75 and more) which eat into that hard-earned interest when you transfer RRSPS, TFSAs, RRIFS or other registered GICs to another institution. At OAM, we deal with over 40 institutions (banks, trust companies and credit unions) and all transfer fees are waived.

In today’s low interest environment, it makes sense to get the highest possible return on your GICs. Once you use BEST RATE GIC’s you’ll never go back to the low GIC rates offered by your own bank.