Savers Roundup December 2018: 2.30%+ rates are the norm; multi-year GIC strategies; 2019 TFSA contribution limit

Bridgewater, Motive, Oaken, Wealth One play catch-up; Hubert Financial rate decrease

On December 5th, Hubert Financial somewhat surprisingly decreased its regular savings account interest rate from 2.50% to 2.30%, which is even lower than its 2.35% rate from August. Its TFSA (and RRSP and RRIF) interest rate remains at 2.50%.

The rest of the rate changes have been positive, mostly from financial institutions playing rate catch up after the flurry of increases over the past few months. Bridgewater Bank increased its regular savings account interest rate to 2.50%; it had been at 1.75% since January 2016. Oaken Financial made a similarly large jump to its regular savings account interest rate, from 1.50% to 2.30%. Also seeing an increase was Wealth One Bank of Canada’s TFSA to 2.30%, matching its regular savings account rate; and Motive Financial’s TFSA to 2.40%, which had been at 1.80% since October 2015.

Motive Financial remains the regular savings leader at 2.80%, and Ideal Savings remains the TFSA leader at 2.76% on our comparison chart.

For a bit more insight into Motive Financial, see this detailed review of the account opening process by forum member Alexandre, who chronicled the 15-day process from application submission to account creation.

Promotions and multi-year GIC strategies

• Ideal Savings currently has a 150-day GIC promo at 3.25%, which is higher than any regular 1-year GIC rate on our chart
• Ontario-only Ganaraska credit union has a 4-year GIC at 4.00%, with a 1.25% cashable rate. As pointed out by forum user “thisusernameforlease”, if you’re concerned that you might need some money from a GIC before it matures, simply open multiple GICs for the same term. For example, open 5 x $1,000 4-year GICs rather than 1 x $5,000 4-year GIC. Combine this with a GIC ladder (multiple GICs of different terms that mature in staggered increments such as every year) for maximum GIC liquidity!
• Canadian Tire Financial has dropped near the bottom of our comparison charts over the past few years, but if you’re a current customer, look for a targeted promotion for 3.20% on new deposits to a High Interest Savings account between December 10, 2018 and June 30, 2019

2019 TFSA contribution limit

As 2018 comes to an end, you might be starting to calculate taxes and rounding out charitable donations, as well as looking ahead to 2019’s TFSA contribution limit. The 2019 limit will officially increase another $500 to $6,000, making a cumulative total of $63,500 for those who were at least 18 years old when the TFSA was introduced in 2009.

Remember that any amount withdrawn from your TFSA is re-added to your outstanding contribution room the next calendar year. If you’re considering transferring existing TFSA funds between financial institutions, this makes the end of 2018 a good time to withdraw money to be re-deposited in January, so that you don’t have to go through the administrative process of a direct transfer, which might include transfer out fees.