Fact, Facts and More Facts: Premium Savings Accounts Expand But at a Slower Pace

Premium savings account (PSA) balances increased by 3.2% during the six-month period ended June 2012, reaching a new high of $237.3 billion. While still positive, the pace of growth has slowed down compared to the 11.7% expansion seen in the second half of 2011 when equity markets tumbled. The online (including ebanking) channel accounted for the bulk of the new balances with an increase of 4.7%, followed by advice-based (accounts distributed through intermediaries) and deposit-taker branch-based conduits with 3.6% and 1.6% growth, respectively. Competition in the advice channel continued to heat up with Home Trust introducing its own PSA for the advisor network in July. The cited metrics are derived from Investor Economics database which tracks the holdings of Canadian premium savings accounts. For more information on news and developments concerning Canadian deposit industry, please see the latest issue of Deposits and Fixed Income Advisory Service http://investoreconomics.com/issue/deposit-and-fixed-income-advisory-service-2. Posted by Bonnie Ho Bonnie@iei.ca.