Savers Roundup November 2018: Motive Financial wakes up (2.80%); Zag Bank shuts down; Simplii Financial’s new cash back credit card

Motive Financial introduces 2.80% savings account

This month, Motive Financial quietly introduced new savings and chequing accounts. The Motive Savvy Savings Account currently has a market-leading 2.80% interest rate, topping the Ideal Savings 2.76% rate. The Motive Savvy Savings Account has only 2 free external transactions per month, then charges $5 per transaction. However, transfers between internal accounts are free, so you can pair it with a Motive chequing account and not have to worry about the transaction limit.

The new Motive Cha-Ching Chequing Account looks to be the same as the existing no-fee chequing account that Motive offers, except that it now has unlimited Interac e-Transfers.

It is a bit odd that Motive introduced these new account types rather than modifying its existing accounts. The Motive Savings Account has been stuck at 1.50% since July 17, 2015, and its TFSA is still sitting at 1.80%, even though the Bank of Canada’s key interest rate has gone up 5 times starting in 2017. But the bottom line is that these new accounts are attractive in rate and features!

Savings account interest rate increases and competition

On October 24, 2018, the Bank of Canada raised its key interest rate by 0.25% to 1.75%, and signaled that more hikes are expected. In response, many financial institutions increased their regular savings and TFSA interest rates, including MAXA Financial (to 2.45%), Outlook Financial (to 2.40%), Achieva Financial (to 2.40%), Implicity Financial (to 2.40%), Hubert Financial (to 2.50%), AcceleRate Financial (to 2.40%), and Peoples Trust (regular savings account to 1.65%).

In the case of Achieva Financial, it had initially increased its rates from 2.15% to 2.30%, then to 2.40% a few hours later that same day. Implicity Financial did something similar, initially increasing its rates from 2.15% to 2.35%, then to 2.40% the next day. Looks like healthy competition worked in favour of Canadian savers!

The savers account leader is currently Motive Financial at 2.80%, followed by Ideal Savings at 2.76%, Hubert Financial at 2.50%, MAXA Financial at 2.45%, and a 4-way tie at 2.40%. The leaders are the same on the TFSA side except for Motive Financial, which is not amongst the top rates.

Get 3.00%+ savings account interest rates with promotions

There are quite a few current savings account promos that will get you 3.00% or higher. Here are some of the newest ones:

GIC options: Tangerine Bank and Simplii Financial become competitive

Tangerine Bank and Simplii Financial have kept most of their rate changes in lock-step over the years, including their currently uncompetitive standard 1.25% savings account interest rate and their penchant for promotional rates for new accounts and new deposits.

At the beginning of November, Tangerine Bank increased its GIC rates to be close to the top of our GIC comparison chart, including the highest nationally-available, non-promotional 1-year GIC rate at 3.10%. A couple of days later, Simplii Financial increased its GIC rates across the board by up to 0.40%, matching Tangerine’s rates.

Some of the newest GIC promos include the following:

Goodbye Zag Bank

Zag Bank, a virtual bank owned by Desjardins, had not offered competitive rates for quite a while. It recently announced that it is shutting down, mostly before the end of 2018. A silver lining is that it paid out a $25 goodwill bonus to existing customers.

Hello federal credit union Coast Capital Savings

Coast Capital Savings, formerly a BC credit union, became a federal credit union (although not available in Quebec yet) on November 1, 2018. Its launch promos include 2.70% for a convertible 16-month GIC, and a 2.00%/3.00%/4.00% 3-year escalator GIC.

Simplii Financial’s new no-fee cash back credit card

Simplii Financial has come out with a no-fee cash back credit card that is only available to current Simplii Financial clients for now. In short, it is a Visa without an annual fee and offers 4% back at restaurants; 1.5% at gas, grocery stores, and recurring payments; and 0.5% on everything else. You can get 10% cash back (up to $50 back) on your first 4 months of spending at restaurants. Forum member “User230” has done a comparison of the new Simplii credit card against several other cards.

One comparable current credit card offer is for the Scotiabank Momentum Visa Infinite, which has a $99 annual fee waived for the first year, gives 4% back at gas and grocery purchases, 2% back at drug stores and recurring bill payments, and 1% back on everything else. You can get 10% back on all purchases (up to $200 back) for the first 3 months.