Author: Peter Page 13 / 31

Savings account interest rate increases!

There has been some moderately good news for savers recently, with a couple of savings account interest rate increases. Hubert Financial increased its regular savings account interest rate from 1.00% to 1.25% (although its TFSA/RRSP/RRIF savings accounts remain at 1.00%). Implicity Financial increased its regular savings account and TFSA interest rate from 1.10% to 1.20%.

The leaders on our comparison chart have remained unchanged since last month, although remember to look beyond the rate if needed and consider other account features. There are pros and cons with all accounts. For example:

• Canadian Tire Bank has the highest rate on our chart at 1.55%, but there have been lots of reports about how long it takes to open an account
• Neo Financial is next at 1.30%, but does not currently have an online banking interface or a TFSA
• EQ Bank is tied for third at 1.25%, but does not offer cheques
• Tangerine Bank has one of the highest new client offers with a 2.10% promo rate for 5 months, but after that, its regular savings account interest rate is a paltry 0.10%

GIC leaders beyond our comparison chart

The rate leaders on our GIC comparison chart are unchanged from last month:

• Oaken Financial has the highest 5-year (2.20%), 4-year (2.00%), and 3-year (1.70%) rates
• Achieva Financial and Wealth One Bank of Canada have the highest 2-year rate at 1.55%
• Achieva Financial has the highest 1-year GIC rate at 1.50%

Although these are not technically promotions, you can find even higher rates elsewhere, such as through the broker GIC Wealth Management Inc. (up to a 2.30% 5-year GIC) and through Ontario-only Tandia Credit Union (up to a 2.50% 5-year GIC).

Another summer of promos

If you are looking for a low-risk place to park cash for a short term, such as in advance of a down payment, or if you’re looking to try a new bank account, there are plenty of promos available.

• motusbank: 2.25% for the first 90 days in a new savings account or RRSP; 2.35% for the first 90 days in a new TFSA. Expires July 31, 2021.
• Tangerine Bank new customers: 2.10% savings account interest rate for the first 5 months if you also open a chequing account, plus $150 bonus for setting up payroll direct deposit with the promo code “EARNMORE”
• Tangerine Bank targeted promo for existing customers: 1.50% on new deposits in a savings account between June 9, 2021 and October 31, 2021
• Simplii Financial new customer promo: 1.50% in a savings account until October 31, 2021
• Simplii Financial targeted promo for existing customers: 1.50% on new deposits in a savings account until October 31, 2021
• Every one of the big 5 banks has a minimum $300 sign-up bonus promo for opening a chequing account. For example, Scotiabank’s promo is up to $300 cash for opening an Ultimate Package or Preferred Package chequing account
• Coast Capital chequing account: up to $350 sign up bonus for customers in BC (expires July 31, 2021)

We have a dedicated page to track promotions.

Credit card promos too

If you’re planning to make a lot of purchases this summer, you might also want to check out one of many credit card sign-up promotions, including:

• Tangerine Money-Back Credit Card or World Mastercard: An extra 10% back on your first $1,000 of purchases in the first 2 months
• … which is not unlike Scotiabank’s Momentum Visa Infinite Card promo: 10% back on the first $2,000 in the first 3 months. This card has an annual fee, but the fee is waived for the first year.
• National Bank’s mycredit Mastercard has no annual fee (first year or otherwise), and currently has a promo where you can earn 8% cash back on your first $1,500 of restaurant purchases and recurring pre-authorized payments in the first 3 months
• The Scotiabank Gold American Express Card has a promo of up to 50,000 bonus Scotia Rewards points in your first year, and no annual fee for the first year

Credit card changes

There has been a significant change to the MBNA Rewards World Elite Mastercard: you previously earned 2 points per dollar on all purchases; now, you will earn 5 points per dollar on groceries, restaurants, and recurring bills; and 1 point per dollar on all other purchases.

The American Express Cobalt credit card monthly fee is going up by $2.99 per month (about $36 per year) in exchange for some new features: mobile device insurance, 3x points on streaming service purchases, and the ability to transfer directly to certain airline frequent flyer programs, such as 1:1 to Aeroplan.

EQ Bank’s new US dollar account

EQ Bank has launched a USD account with a 1.00% interest rate. By comparison, Tangerine Bank’s USD account interest rate is 0.10%, and Hubert Financial’s USD account interest rate is 0.25%. (USD balances are typically included in Tangerine Bank’s promos for new and existing customers, so you might be able to get a much higher rate from them.)

There’s no telling how long the 1.00% interest rate will last, although EQ Bank’s splashy 2.30% TFSA and RRSP account interest rates lasted a full 6 months.

The new USD account does not currently support joint accounts or GICs. But you can transfer funds to and from other USD accounts in Canada, as well as internationally through its partnership with Wise (formerly TransferWise). You can also convert currency at a competitive rate — EQ Bank’s spread against the mid-rate appears to be about 1.5%.

Savings account interest rates down; GIC rates up

Our savings account comparison chart has seen a few rate drops over the past month, at Bridgewater Bank (from 1.45% to 1.20%), LBC Digital (from 1.20% to 1.15%), and MAXA Financial (from 1.10% to 1.00%). 1.00% remains the floor for the financial institutions that we track. At the top of the list is Canadian Tire Bank, with a regular savings account and TFSA interest rate of 1.55%.

By contrast, our GIC rates comparison chart has seen a few increases lately. Several of Oaken Financial’s GIC rates have increased, including its 5-year GIC rate to 2.20%. Motive Financial and EQ Bank’s GIC rates have also ticked up. While Oaken Financial has the highest 5-year, 4-year (2.00%), and 3-year (1.70%) GIC rates on our chart, it’s Achieva Financial and Wealth One Bank of Canada with the highest 2-year GIC rate at 1.55%, and Achieva Financial with the highest 1-year GIC rate at 1.50%. See the next section for some promotional GIC rates, especially at Wealth One Bank of Canada.

Promos promos everywhere

Some of the newest listings on our promotions page include the following:

• Tangerine Bank targeted offer for existing clients: 1.5% on new deposits from June 9 to October 31, 2021
• Coast Capital has a chequing account promo: up to $350 sign up bonus for customers in BC (expires June 29, 2021)
• Wealth One Bank of Canada has a GIC promo expiring June 30 if you use the code “GIC35”: 1.80% for a 3-year GIC, 1.88% for a 4-year GIC, and 2.08% for a 5-year GIC
• Tandia Credit Union (Ontario only) has a 2.00% 90-day GIC

2.00% is a hot deal

You’re more likely to be earning closer to 1.00% than 2.00% on your savings right now. Such is the reality for Canadian savers, where 2% is a hot deal; here are a few examples:

• A new, non-registered Manulife Bank Advantage Account will get you 2.00% for 4 months
• motusbank is offering 2.40% in a new TFSA or RRSP savings account for 4 months if opened before June 30, 2021. Keep in mind that they have a $50 transfer-out fee for registered accounts.
• EQ Bank’s 2.30% TFSA and RRSP interest rate ends on May 26, but you can lock in a 2.30% 3-month TFSA or RRSP GIC before then
• Tangerine Bank has a promotional 2.10% savings account interest rate for the first 5 months if you also open a chequing account, plus a $150 bonus for setting up payroll direct deposit with the promo code “EARNMORE”
• Our GIC comparison chart features Oaken Financial and EQ Bank with 2.10% 5-year GICs, and LBC Digital with a 2.00% 5-year GIC
• Steinbach Credit Union has a special 2.00% 5-year GIC as well, as listed on our promotions page
• Toronto-based GIC broker GICWealth has a 2.15% 5-year GIC

It’s been another month full of interest rate drops on our savings account comparison chart at Oaken Financial (from 1.25% to 1.15%), Peoples Trust (from 1.20% to 1.15%), Wealth One Bank of Canada (from 1.50% to 1.25% on its regular savings account only), and Alterna Bank (from 1.10% to 1.00%). Neo Financial is about to decrease its regular savings account interest rate from 1.55% to 1.30% on Monday, May 17, leaving Canadian Tire Bank as the unmatched leader for both regular savings and TFSA accounts at 1.55%. Bridgewater Bank currently holds the second spot for a regular savings account at 1.45%, while Wealth One Bank of Canada holds the second spot for a TFSA at 1.50%.

Every account has its quirks: firsthand account reviews

Are you doing some spring cleaning on your bank accounts or potentially opening new ones? Our website community has been busy trying out new accounts and sharing experiences.

Top rate leader Wealth One Bank of Canada has a comprehensive set of account features on its chequing account, although its bill payments database could apparently use some work.

Neo Financial’s savings account interest rate is enticing (although less so with its impending decrease), but if you’re not quite sure about the new kid on the block, we’ve got the entire account opening process documented with screenshots, including how to link external accounts.

Several of the big banks have sign-up bonuses on their chequing accounts right now, but none of them support linking external accounts for “me to me” electronic funds transfers. Free Interac e-Transfers and cheques might still be good enough, and you can still link to the big bank accounts and initiate electronic funds transfers from many of the accounts listed on our website.

Spring reading

• An ode to GICs
• A discussion on how to ensure that your spouse can access your GICs if you die
• EQ Bank US dollar accounts are coming soon

Our top cash back offers

A few of the offers currently available on our cash back site include:

• $65 cash back or a $70 Amazon.ca gift card for opening a no-fee Tangerine Money-Back Credit Card
• $70 cash back or a $75 Amazon.ca gift card for opening a Scotiabank Ultimate Package Chequing Account
• $20 for signing up for a no-fee Mogo Visa Platinum Prepaid Card

Rate drops lead to a tie at the top of the savings account chart

Our savings account comparison chart has continued to see interest rate decreases as we head into the spring, most recently at Alterna Bank (from 1.20% to 1.10%), LBC Digital (from 1.40% to 1.20%), and Bridgewater Bank (from 1.55% to 1.45%).

Chart leader Canadian Tire Bank finally decreased its regular savings account and TFSA interest rate. It had been at 1.80% since April 2020, but its rates have fallen back to 1.55%. That leaves it tied with newcomer Neo Financial at the top of the regular savings account list, followed by EQ Bank and Wealth One Back of Canada at 1.50%.

EQ Bank still leads the TFSA list at 2.30%… but not for long! Starting on May 26, EQ Bank’s TFSA and RRSP savings account interest rate will decrease to 1.25%, and its regular savings account interest rate will decrease to 1.25% on April 16.

Neo Financial: a 1.55% savings account but not a financial institution

Last week, we added Neo Financial to our comparison chart. It comes with its fair share of caveats. There is no web-based online portal for its savings account — you must use its mobile app. Neo Financial is a financial technology company, not a financial institution; its savings account is technically held by Concentra Bank, so for CDIC deposit insurance coverage limits, your deposits are combined with any deposits held in a Concentra Bank account. It is this potentially confusing relationship with Concentra Bank that has led some forum users to suggest that Neo Financial shouldn’t even be posted on our chart.

Nevertheless, the savings account available through Neo Financial has a 1.55% interest rate, and with this account you can pay bills, send and receive Interac e-Transfers, and make electronic transfers to and from your other bank accounts.

5-year GICs above 2.00%

Yes, you read that right. Oaken Financial recently increased its 4-year (1.90%) and 5-year (2.10%) GIC rates, retroactive to March 23. That’s the first GIC rate at or above 2.00% that our GIC comparison chart has seen in 2021.

It was followed by a round of GIC rate increases at LBC Digital, with a 2.00% 5-year GIC available starting April 12.

For shorter terms, Peoples Trust and Peoples Bank are offering 1.55% for a 1-year or 15-month GIC. Starting on April 16, EQ Bank will be offering a 1.50% 3-month GIC, and you can still get a 2.30% 3-month TFSA or RRSP GIC from EQ Bank before May 26.

New promos and developments

• Simplii Financial has a targeted new deposit promo for existing clients: 1.25% between April 1 and July 31, 2021
• Tangerine Bank has a targeted new deposit promo for existing clients: 1.50% between April 8 and August 31, 2021
• motusbank has a new mobile app; is it better than it was before?
• Wealth One Bank of Canada now has a chequing account
• The no-fee Home Trust Preferred Visa is losing its roadside assistance and rental car insurance benefits starting May 31, 2021