GIC rates have continued creeping higher, with the top 5-year GIC rate now at 4.10% (from Wealth One Bank of Canada). The top rates for other terms on our chart:
- 1-year GIC: 3.65% (MCAN Financial)
- 2-year GIC: 3.90% (MCAN Financial and Wealth One Bank of Canada)
- 3-year GIC: 3.90% (MCAN Financial and Wealth One Bank of Canada)
- 4-year GIC: 3.95% (MCAN Financial and Wealth One Bank of Canada)
For all but the 2-year term, you should be able to get an even higher rate from a GIC broker.
The current savings account interest rate leader is still Saven Financial, which offers 2.85% on both its regular savings account and TFSA.
Brokerage investment savings accounts continue to be an attractive option for any cash you have sitting in your investment account, but they have lost their former lustre. A couple of years ago, they used to be similar to, and even topped, the highest savings account interest rates.
Tangerine tiered rates vs traditional promo rates
Tangerine has offered targeted promotional savings rates to some existing customers for years (since at least as early as 2015) with a market-leading interest rate that lasts for a few months. This has consistently been one of the most frequently discussed topics in our forum. Over the past 2 years, some customers have reported receiving a new type of offer called a tiered savings rate, where the interest rate depends on how much money you have with Tangerine.
These tiered rates are often lower than the “traditional promo” rates, but they usually last longer (6 months instead of 3 months), and they apply to the entire savings account balance rather than only to new deposits. You also don’t have to “accept” the tiered rates when they’re offered, unlike the traditional existing account promos that you have to accept. As per usual, different promo rates are being offered to different clients.
Early reports of tiered rates were underwhelming:
Balance (total across Tangerine accounts) | Rate
$0 to $49,999 | 0.35%
$50,000 to $99,999 | 0.75%
$100,000 to $499,999 | 1.75%
$500,000 and above | 2.25%
… but more recently reported tiered rates have gotten better:
Balance (total across Tangerine accounts) | Rate
$0 to $49,999 | 2.00%
$50,000 to $99,999 | 2.50%
$100,000 to $499,999 | 3.00%
$500,000 and above | 3.50%
Even the highest tier still gives you a lower interest rate than the most recent new deposit promos (4.10%-4.25% for 3 months). This had led to concerns about people getting “stuck” on the tiered rates. However, we’ve had at least one report of someone being offered the traditional promo rates while on a tiered rate.
Outlook Financial discontinues Me2Me transfers
“Me2Me transfers” is what Outlook Financial calls the ability to link external bank accounts in order to push or pull funds. It has been 11 years since Outlook Financial first started offering this, but that ends on June 11. It’s odd that they’re completely discontinuing it (rather than simply changing it to use something like Flinks or Plaid), because most online banks support this to make it easier to move your money. (None of the big banks support linking external accounts; you have to make the link from the other financial institution.)
Outlook Financial’s own announcement says that alternatives include e-Transfers, but that you can write yourself a cheque or initiate the transfer from the other financial institution.
Wealthsimple: more and more features
Wealthsimple’s latest product announcement was predictably less grandiose than its “We Take Over Your Life” headline. It nonetheless included some notable highlights:
- Kids and Teens Accounts (coming this fall): designed to give young users access to basic banking tools while allowing parents to maintain oversight/control of the account. Parents can view transactions in real time, receive customizable purchase alerts, set spending limits for individual transactions or weekly and monthly totals, block certain spending categories, and freeze or unfreeze the card when needed. It also allows parents to provide allowances, transfer additional funds, and to pay additional interest as an incentive for saving. This complements Wealthsimple’s existing “Household” feature that enables you to view linked accounts from a single dashboard.
- Portfolio line of credit (available now): access to immediate credit when borrowing against your portfolio
- USD chequing accounts (coming this fall): Wealthsimple already offers a USD savings account, but a USD chequing account is coming soon for both personal and business accounts, providing “access to US payment systems” — will that include ACH banking details?
- Additional business account features: business portfolio line of credit is coming this spring, and a prepaid card is coming this summer
- A bunch of giveways, including “Monthly Millionaire” — this might be inherently cheesy, but is still a cash giveaway, and unique compared to other financial institutions!
A primer on gold: new article
Is gold part of your investment portfolio? Or have you been intrigued by the meteoric rise in gold prices over the past 2 years, and want a primer on gold as an investment?
Rico M’s latest article is on “The wonderful world of gold and its investment opportunities: part 1“.
He covers the history of gold, the types of gold (paper versus physical gold), ways to invest in gold, the karat unit purity measurement, and the risks of investing in gold!
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