The Bank of Canada announced on March 2 an increase of 0.25% to the policy interest rate, which now stands at 0.50%.
This increase is not surprising, according to our Interim Chief Economist Sébastien Mc Mahon, since the Bank of Canada had previously announced its intentions.
As stipulated in the loan agreement, this increase will automatically impact the payments to be made by your clients with previously issued loans (RRSPs, RESPs and investment loans) as these loans are established according to the Royal Bank of Canada's prime rate which now stands at 2.70%. This adjustment on loans is automatic, no action is required on your part, nor on your client's part*.
For more information, you can watch Sébastien Mc Mahon's video on the subject.
Increased rate for the High Interest Savings Account (HISA)
On a positive note, the High Interest Savings Account (HISA) rate increases from 0.40% to 0.65% on Friday, March 4, 2022!
The next Bank of Canada announcement will be on April 13, 2022.
Link to the press release issued by the Bank of Canada: https://www.bankofcanada.ca/2022/03/fad-press-release-2022-03-02/
* The annual interest rate changes automatically, without notice, whenever the prime rate changes.
