1.00% Bank of Canada increase leads to average 0.61% increase in savings accounts
It’s now been 1 month since the Bank of Canada raised its key interest rate by a whopping (by recent standards) 100 basis points to 2.50%. What has happened to savings account interest rates since then?
The largest absolute increase was at Canadian Tire Bank from 1.45% to 2.40%, but 1.45% had drifted to almost the bottom of our savings account comparison chart. Motive Financial increased its savings account and TFSA interest rate from 2.20% to 3.00%, which makes it the clear leader at the moment.
14 of 19 savings accounts on our chart have seen their interest rates increase since July 13, and by an average of 0.61% or 61 basis points. That’s a large average increase, although far from the full 1.00% increase by the Bank of Canada.
Some promo rates are going up too
With savings account interest rates continuing to increase, what happens if you were locked into a promo rate? In at least a few cases, those rates have continued to increase:
- Simplii Financial’s targeted new deposit promo from July started out as 3.00%, and has since increased to 3.85%, with the same end date of October 31, 2022
- Meridian Credit Union’s new account promo started out at 2.75% (for the first 8 months) in May, but has since gone up to 3.50% or 3.65%, depending on when you created the account
- DUCA Credit Union’s (Ontario-only) Earn More Park Account promo, which started out 1 year ago at 1.50%, has increased and been extended multiple times all the way to 3.25%. Given that its end date has been completely removed, it’s more of a regular rate than a promo at this point!
By contrast, Tangerine Bank’s recent promos for both new and existing customers have fixed promo rates that don’t change if the base interest rate changes (at least so far).
There is a 4.70% savings account promo
Is a 4.70% savings account for real? Mostly. It is linked to the prime rate, but only in Alberta and only until October 10.
So many choices, too little time
As “high interest savings accounts” start to live up to their name again, how do you choose from amongst all the options? Chime in on a recent forum thread that asked which 3 or 4 online banks you would get.
Are GIC rates peaking?
GIC rates were the star in the first half of 2022, increasing by up to 3.00% for 1-year through 5-year rates for the leaders on our GIC comparison chart. While on average we have seen some modest increases (0.05% to 0.30%) over the past month, the pace of increases has definitely slowed down. EQ Bank’s GIC rates have actually started to decrease. For now, EQ Bank appears to be an outlier in that respect, which may be related to a decreased need for funds (and/or a reduced dependency on deposits) on its mortgage side.
Speaking of outliers, Tangerine Bank is currently tied (with Peoples Trust) for the top 1-year GIC rate on our chart at 4.50%. Tangerine’s 1-year rate is weirdly above its 5-year rate of 4.45%. So shop around depending on the term you’re looking for; as an example, MAXA Financial is currently offering the highest 5-year GIC rate on our GIC chart at 5.10%.
Cash back credit card sign-up offers
Looking for a new credit card? Check out our cash back website where you can currently get up to an additional $200 Interac e-Transfer or a $275 Amazon.ca gift card for successfully signing up for a credit card through our site.