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Rising Rates and Your Savings

What's the impact of the recent rate hikes on deposit accounts?

August 2022 2 min read

The recent Bank of Canada rate hikes are all over the news. The increases are to help lower inflation, which has been rising due to increased demand for goods and services amid significant supply chain issues. The central bank has raised its overnight rate at the fastest speed in almost twenty-five years, and there may be more hikes to come.

You may be wondering what the impact will be on accounts like savings, chequing and term deposit accounts. Here’s an overview of what you can expect at Coastal Community.

Competitive Rates

Coastal Community reviews our account and deposit rates several times each week with the goal of ensuring our rates are competitive. It’s important to note that while rate hikes by the Bank of Canada influence deposit rates, there isn’t a one-to-one correlation — with the exception of our prime-linked term deposits. When the Bank of Canada adjusts the overnight rate, Coastal Community’s Prime rate will change, which in turn affects the prime-linked term deposit rate. 

More About Term Deposit Rates

Coastal has many short and long-term term deposit options. For example, our 1-year cashable after 30 days or 1-year redeemable term deposits offer great rates plus flexibility. Our Rate Climber terms provide a higher guaranteed rate each year and are redeemable on each anniversary. If rates are higher on the anniversary date, the term can be redeemed. If rates are lower, the funds can be left for another year. Given the uncertainty of longer-term rates, this is a very popular product.

If you would like to know more about term deposits, click on a link below to chat to us or make an appointment with one of our experts.