Advice?
I found out that my RRSP has been sitting in a non-interest-bearing savings account since I opened it (Dec 2004). I am annoyed: I went to a financial advisor for a reason, and this was not it.
I am supposed to speak to her again tomorrow, and I am going to say that had it been in something interest-bearing, it would have earned X amount, and I want to be credited that amount. Then they will say no, and eventually I will threaten to take them to small claims court, when they will probably give in because it’s terrible publicity. After that I will switch all my accounts over to some other bank (Canadians: suggestions?). But first I need to know what the amount of interest *is* that I would have had. I am sure I could figure this out myself; I am *also* sure that some of the mathy people who comment could figure it out much more quickly, since my memory of any of the appropriate equations is non-existent, as is my knowledge of the terminology.
So, if I invested 750/month every month starting December 2004 (assume this should run until Feb 2006, so 14 months), how can I calculate what I should have earned in interest since then? There are a few ways to figure it out, but I’d just base it on a 2.5% interest rate (for GICs), interest paid monthly. (There is another possibility, the “building-block GIC”, which is where you get the 2.5% at the end of the year: that is about 225$: my math is up for that.)
Thanks.
February 1st, 2006 at 11:11 am
Bank suggestions: they all suck. Seriously. All the major banks are, as far as I can tell, run by annoying people who don’t actually care about you.
I would suggest ING, actually. But you need to have a bank account somewhere else to get that… maybe Desjardins? I dunno. Good luck.
February 1st, 2006 at 3:20 pm
I don’t see where you get your $225 number.
I did your numbers for 14 months. At no interest, you wind up with $10,500.00. At 2.5% annual interest, compounded monthly, you get $10,643.38, only $143 more.
February 1st, 2006 at 3:37 pm
ACW: there is a “building block GIC”, where you put in X amount every month, and at the end of the year, you get 2.5% on 12*X. 12*750*0.025 = 225. (You get nothing, pretty much, earlier.) What are the relevant formulas, otherwise? I can try to figure out the maximum possible I could reasonably ask for.
February 1st, 2006 at 5:44 pm
Monthly payments of PMT into a savings account earning an annual interest rate of r after M months:
Balance = PMT ((1 + r/12)^M -1)/(r/12)