BUSINESS

Laurentian Bank joins Black Friday trend with offer on GICs

11/22/2012 03:26 EST | Updated 01/22/2013 05:12 EST
One of Canada's smaller national banks has caught Black Friday fever.

Laurentian Bank (TSX:LB) is offering a two-day special that will double the interest rate paid on a certain type of savings product.

The promotional rate is 2.4 per cent for two-year guaranteed investment certificates purchased on Friday Nov. 23 or Monday Nov. 26.

There are several strings attached to the offer, including that at least $500 be invested in the GIC.

Another condition is that the funds can't come from an existing account at Laurentian Bank or any of its subsidiaries.

Laurentian joins a long list of Canadian retailers and consumers who have adopted Black Friday, a shopping phenomenon south of the border.

The day after the U.S. Thanksgiving — always on the last Thursday in November — has been one of the busiest shopping days of the year in the United States.

Canadian retailers have responded with their own Black Friday and Cyber Monday promotions to keep shoppers from crossing the border for bargains.

"The Black Friday phenomenon is huge and is extending beyond the American border today into previously unthought-of markets like the banking sector," Laurentian marketing executive Stephane Gagnon said in a statement.

Laurentian — the sixth largest bank in Canada — is possibly the first major financial institution in the country to offer a Black Friday promotion.

The bank's usual interest rate for two-year, non-redeemable GICs has been 1.2 per cent a year — comparable with posted rates from the bigger Canadian banks.

Guaranteed investment certificates are a relatively simple type of investment that allows savers to receive payments based on a percentage of the principle amount they've invested.

Assuming the interest is credited annually but reinvested until the GIC matures, $500 at 2.4 per cent for two years would generate about $24.29 in interest, whereas at 1.2 per cent it would generate $12.07.