The Bank of Canada announced on June 1st an increase of 0.50% to the policy interest rate, which now stands at 1.50%.
Bank of Canada
Policy Interest Rate
In his weekly Economic News video presentation, our Chief Strategist and Senior Economist Sébastien Mc Mahon stated that this increase was anticipated by the markets. Check out this Friday's edition of Economic News to hear Sébastien's reflections following this rate increase.
- Click here to consult the press release issued by the Bank of Canada
- The next Bank of Canada announcement will be on July 13th, 2022.
Impact on savings and life insurance loans
On the savings side, 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 3.70%*.
In addition, since iA Financial Group also uses this rate to establish policy loans on certain individual life insurance policies, these loans could be affected.
These adjustments are automatic, no action is required on your part, nor on your client's part.
Increased rate for the High Interest Savings Account (HISA)
On a positive note, the High Interest Savings Account (HISA) rate increases to 1.35% on Friday, June 3, 2022!
* The annual interest rate changes automatically, without notice, whenever the prime rate changes.