Your savings account should give you at least 1.50%
The Bank of Canada increased its key interest rate from 0.50% to 1.00% on April 13. This was the second of several expected increases this year, after being at 0.25% since 2020. Accordingly, there have been non-stop savings account interest rate increases over the past month, with even a couple of double increases. The largest increase was at Ideal Savings, whose TFSA interest rate went from 1.01% to 1.76%, although its regular savings account mysteriously remains at 1.01%.
Only 4 out of 19 savings accounts that we track have not increased their interest rates in 2022 (with Canadian Tire Bank even decreasing its rate back in February); those savings accounts now sit at the very bottom of our comparison chart.
Ontario-only Saven Financial has our first non-promo 2.00% savings account interest rate since 2020, although it doesn’t offer a TFSA. Future merger partners Hubert Financial and AcceleRate Financial both sit at 1.70% for their savings account and TFSA. If your financial institution is not giving you at least a 1.50% savings account interest rate, it’s behind the pack!
New deposit promos aren’t just for new customers
For the longest time, we used to complain that the highest savings account interest rates were only available in promotions for new clients. There are still plenty of new client promos out there, and we track many of them on our promotions page. New deposit promos for existing customers have been appearing like clockwork at Simplii Financial and Tangerine Bank for many years, but they are now available elsewhere, including:
- DUCA’s Earn More Savings Promotion account has been increased to 2.50% with an extended expiry date of December 31, 2022
- HSBC 2.35% (on less than $25,000) or 2.65% (on $25,000 or more) new deposit promo for new and existing customers in a High Rate Savings Account between April 4 and June 24, 2022
- RBC targeted new deposit promo for existing customers: 2.50% between May 5 and July 31, 2022
- Simplii Financial targeted 5-month new deposit promo for existing customers: 2.80% between May 1 and October 31, 2022
- Tangerine targeted 5-month new deposit promo for existing customers: 2.60% between May 6 and September 30, 2022
3.00% is becoming the GIC rate floor
On January 1 of this year, the top rates on our GIC comparison chart were 2.00% for a 1-year GIC and 3.00% for a 5-year GIC. We might soon consider 3.00% as the floor for 1-year GIC rates.
Last month, we saw the first 4.00% GIC in several years with Oaken Financial’s 5-year GIC. Now our top rates are a 3.35% 1-year GIC (or 3.68% through a GIC broker) and a 4.15% 5-year GIC.
PACE Credit Union conclusion
Follow its previous administration’s mismanagement, PACE Credit Union will soon be folded into another credit union, Alterna Savings. Under very different circumstances, these two credit unions had previously attempted and aborted a merger in 2014.