Author: Peter Page 2 / 31

20 years ago (in 2005), the CDIC coverage limit per deposit category was increased from $60K to $100K. Now, the federal government is considering raising that limit from $100K to $150K. That would follow quite closely to inflation, as the Bank of Canada’s own inflation calculator returns a roughly 54% inflation increase between 2005 and 2025.

Current savings account and GIC rate leaders

Nowadays, at least your savings account interest rate is likely to exceed the current inflation rate (of less than 2.0%) at most of the financial institutions on our savings account comparison chart. 3.10% is still the top savings account interest rate, which you can currently get from PC Financial and Wealth One Bank of Canada; and you can still get 3.50% from EQ Bank if you have an eligible direct deposit. Some of the recent rate changes include increases from Hubert Financial (from 2.00% to 2.30%), as well as MAXA Financial and Outlook Financial (both from 1.85% to 1.95%).

Meanwhile, the top GIC rates on our chart are currently as follows:

• 1-year: 3.65% (or 4.10% via a broker)
• 2-year: 3.75% (or 4.05% via a broker)
• 3-year: 3.70% (or 3.92% via a broker)
• 4-year: 4.00% (or 3.88% via a broker)
• 5-year: 3.95% (or 4.01% via a broker)

Mutual fund sales culture concerns

Recently, the Ontario Securities Commission and Canadian Investment Regulatory Organization reviewed the sales practices at 5 bank-affiliated mutual fund dealers. Among the study’s findings:

We observe that 25% of representatives across banks reported that clients have been recommended products or services that are not in their interests at least ‘sometimes’, which suggests that product recommendations may not always be in the interests of clients.

Quick personal finance hits

• Poll results: Last month, we asked readers whether they’ve ever been a victim of financial or online fraud. 32% responded “yes”, while 68% responded “no”.
• Discussion on how to determine what percentage to withdraw from your RRIF each year
• Forum users do not recommend a market-linked GIC
• Remember that if you have excess cash sitting in an investment account, you can take advantage of brokerage investment savings accounts, which forum user Norman1 regularly tracks

Can you spot a scam banking website?

Two weeks ago, one of our forum users spotted a website claiming to be from UBS Bank and offering a 5.25% 1-year GIC and a 4.35% savings account. Was it too good to be true? Yes, it was a complete scam! And the fraudulent website is still up as of today. It has several hallmarks of a scam website:

• Rate(s) too good to be true
• Broken links
• Design inconsistencies
• Typos
• Embedded third-party contact form
• New domain name
• Cannot be verified by other reputable websites

If you are a victim of online fraud, you should contact your local police and also report it to the Canadian Anti-Fraud Centre.

Savings account and GIC rates holding steady

There has been no change in rate leaders on our savings account comparison chart or GIC comparison chart over the past month, with the exception of Oaken Financial’s 4.00% 2-year GIC rate special until July 16. PC Financial and Wealth One Bank of Canada are tied for the top savings account interest rate at 3.10%, and EQ Bank is still offering 3.50% if you have an eligible direct deposit.

Is Wealthsimple becoming more mainstream?

The Wealthsimple chequing account just got some new features, including:

• Send domestic wire transfers and bank drafts, free until August 31
• Interac e-Transfer: send up to $25K per day
• Interac e-Transfer: use your own email address to receive e-Transfers
• Mobile cheque deposits

Wealthsimple also officially announced its credit card, which had previously been in beta, and offers 2% cash back, no foreign currency transaction fees, and no annual fee if you have over $100,000 with Wealthsimple.

Poll results: Have you ever had a Hubert Financial account?

Last month, we asked readers whether they have a Hubert Financial account. It has been a quietly solid option for savers for many years, although it has lost some of its lustre (amongst our forum users at least) since joining Access Credit Union. 61% of respondents have never had a Hubert Financial account! 13% answered “Yes, and I use it as much or more than before”, while 26% answered “Yes, but not anymore, or I don’t use it as much as before”.

More personal finance news

• Wealth One Bank of Canada has been purchased by an all-Canadian consortium
• Effective July 1, 2025, the Government of Canada has lowered the lowest marginal federal personal income tax rate from 15% to 14%. That puts the annual rate in the lowest tax bracket at 14.5% for 2025 as a whole (since the 14% rate only applies to the second half of the year). If you have income tax deducted from your pay, you should see the effect on your next pay cheque.

Even after its most recent savings account interest rate decrease, PC Financial remains tied for the lead (with Wealth One Bank of Canada) on our comparison chart at 3.10%. If you have an eligible direct deposit (which over half of our recent poll respondents don’t!), you can get 3.50% at EQ Bank.

Hubert Financial recently increased its regular savings account and TFSA interest rate to 2.00%, although that puts it very much middle of the pack.

Looking back at historical rates, the Bank of Canada’s key interest rate sat at 1.75% in pre-COVID times (in early 2020), and the top savings account interest rate at the time was 2.80%. Now, the Bank of Canada’s key interest rate is 2.75%, but the gap between that and our leaders at 3.10% (or 3.50% if you count EQ Bank) is smaller. Should financial institutions be offering savers better rates?

Chasing promos is the norm

Last month, we asked readers “Have you opened a bank account solely for a short-term promo?”. The results suggest that yes, readers are willing to chase promos:

• Yes, and I ended up using it regularly: 19%
• Yes, and I didn’t use it after the promo: 50%
• No: 31%

The comments reflected a theme:

“When you averaged out the interest for 1 year, you are not ahead of the game!”
“Took advantage of the promo and moved on when rates dropped after promo.”
“I’ve done this several times; I use it after the promo only if the bank offers me a new promo.”

Speaking of promos, Coast Capital is still offering the highest promotional interest rate that we track: 5.00% on new deposits to a savings account if you become a new member by June 30, although then you only get the rate until July 31. Some newly discovered promos include:

• RBC new customers: 4.70% for 3 months in your first RBC High Interest eSavings account if opened before 3pm ET on July 30, 2025
• Omnia Direct (Ontario only): 4.50% for 4 months in a new savings account opened by August 31, 2025
• Vancity: 4.85% in a savings account until July 31, 2025
• Tangerine targeted 3-month new deposit promo for existing customers: 3.50%-3.65% between June 6 and August 31, 2025

GIC rates are a mixed bag

MCAN Financial recently increased its GIC rates, putting it in the outright lead or tied for the lead for all terms:

• 1 year: 3.65%
• 2 years: 3.75%
• 3 years: 3.70%
• 4 years: 3.70%
• 5 years: 3.95%

Hubert Financial has a 3.5 year GIC special at 3.75%, which is better than any 3- or 4-year rate we track outside of a broker. That said, forum users were quick to point out that it cannot be opened online. Wealth One Bank of Canada has the same 3.75% rate for an 18-month GIC.

3.00% in a savings account is becoming more rare

There have only been a couple of savings account interest rate changes on our comparison chart over the past month. Neo Financial decreased its regular savings account interest rate from 3.00% to 2.50%, while Wealth One Bank of Canada actually increased its regular savings account and TFSA interest rate from 3.00% to 3.10%.

That still leaves PC Financial at the top of our chart for a regular savings account at 3.50%, while Wealth One Bank of Canada is the TFSA leader at 3.10%. All other non-promo rates are below 3.00%.

This has led to an increased number of discussions in our forum about what promotions are available.

Promos and longer-term GICs are looking more enticing

One of the promotions we track is at EQ Bank, where setting up an eligible direct deposit gets you 3.50%. This is down from 4.00% only a couple of weeks ago. Last month, we polled our readers about whether they have a direct deposit of at least $2,000, and 56% said no! Among the reasons given are that they are retired, self-employed, or unemployed.

Coast Capital is offering the highest promotional interest rate that we track, offering 5.00% on new deposits to a savings account if you become a new member by June 30.

Some GIC rates have been going up. 5-year rates are the highest (with Wealth One Bank of Canada at 4.00%), as was historically the case (prior to the past few years). The top 1-year (3.94%) and 2-year (3.97%) rates can currently be found at GIC brokers.

The Motive Financial brand is officially retiring

Last year’s announcement of National Bank’s takeover of Canadian Western Bank (which was Motive Financial’s parent company) affected a lot of savers, as Motive Financial has consistently been a savings account interest rate leader for over a decade.

National Bank emailed Motive Financial customers at the end of April to announce that the Motive Financial brand will be retired, and affected customers will be moved to accounts with National Bank. National Bank has promised “a similar interest rate”, although our forum users are skeptical about how long that will last, and assessing what to do next.

We’re now at Round 7 of interest rate cuts, following the Bank of Canada’s most recent 0.25% decrease. Our savings account leaders also happen to be those who haven’t cut their rates (yet) this round: PC Financial (at 3.50%), Neo Financial (at 3.00%), and Wealth One Bank of Canada (at 3.00%).

EQ Bank was among the rate decreases this round, dropping its regular savings account interest rate from 1.50% to 1.25%, and its TFSA down from 2.00% to 1.75%. However, it kept its standout 4.00% rate if you set up a direct deposit (of at least $2,000 per month) with them.

You can no longer get 4.00% in any GIC term, even through a broker. Among non-broker rates, Wealth One Bank of Canada is currently the outright leader for a 1-year GIC (at 3.70%), and is tied with MCAN Financial for the lead in other GIC terms:

• 2-year: 3.65%
• 3-year: 3.65%
• 4-year: 3.65%
• 5-year: 3.70%

A beginner’s guide to GICs

Our newest article is A beginner’s guide to Guaranteed Investment Certificates (GICs). It provides a detailed overview of the different types of GICs, the accounts in which you can hold GICs, payout options, insurance, and strategies such as GIC laddering.

Some quick math on promotional rates

A couple of the new customer promotions that we’re tracking are at Simplii Financial and CIBC. But what would be the effective interest rate if you leave your money in for an entire year, after the promotion expires?

Simplii Financial’s new customer promo is 3.70% for the first 7 months. After that, their regular savings account interest rate is 0.30% on the first $50,000 of deposits. That means if you leave $50,000 in the account for the first year (barring any additional promos for existing customers), your average interest rate for the year is about 2.28%¹. If you were to earn 3.00% after the promotional period, your average for the year is about 3.41%².

CIBC’s new customer promo is 5.00% for the first 4 months. After that, their regular savings account interest rate is tiered, but is effectively 0.415% on the first $50,000 of deposits. That means if you leave $50,000 in the account for the first year (barring any additional promos for existing customers), your average interest rate for the year is about 1.94%³. If you were to earn 3.00% after the promotional period, your average for the year is about 3.67%⁴.

This math is one of the reasons why almost 3/4 of our readers have at least 3 savings accounts, in order to take advantage of the best promotional and non-promotional rates at any given time.

¹ Without compounding: (3.70 x 7 + 0.30 x 5) / 12)
² Without compounding: (3.70 x 7 + 3.00 x 5) / 12)
³ Without compounding: (5.00 x 4 + 0.415 x 8) / 12)
⁴ Without compounding: (5.00 x 4 + 3.00 x 8) / 12)

motusbank is closing

Following years of speculation by our forum members about the future of motusbank, the online bank has officially announced that they are closing. For customers with mortgages, lines of credit, and home equity lines of credit in Ontario, the transition will happen as early as next month (May 1, 2025), as their accounts will be moved to Meridian Credit Union (the parent company of motusbank). For deposit accounts and everybody else, their accounts will be moved to Coast Capital, although there is no firm timeline for this yet.

On a related note, Coast Capital is proposing to merge with two other BC-based credit unions.

76% of poll respondents are increasingly buying Canadian

Last month, we asked our readers: Have you changed your spending due to the recently strained Canada-US relationship? There were some strong comments on both the “Yes” and “No” side, but an overwhelming majority at 76% responded “Yes”.