As expected, the Bank of Canada increased its policy interest rate by 75 basis points, which now stands at 3.25%.
|
Bank of Canada |
Royal Bank of Canada Prime Rate |
| 3.25% 75 bps |
5.45% 75 bps |
As the effects of tighter monetary policy work through the economy, the Bank of Canada will be assessing how much higher interest rates need to go to return inflation to its 2% target.
- Click here to consult the press release issued by the Bank of Canada
- The next Bank of Canada announcement will be on October 26, 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 5.45%*.
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)
In addition to providing security against volatility, the High Interest Savings Account (HISA) offers a better return in a rising interest rate environment! The HISA rate increases to 2.85% on Friday, September 9, 2022.
A simple, accessible and risk-free alternative!
* The annual interest rate changes automatically, without notice, whenever the prime rate changes.
