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Savers Roundup April 2021: 5-year GICs above 2.00%; and what exactly is Neo Financial?

Digital wallet

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

Savers Roundup March 2021: Which bank has the easiest online opening account process?

Open sign

Motive Financial headlines savings account rate drops

The first savings account rate changes on our comparison chart in 2021 are decreases: First, Outlook Financial decreased its regular savings account and TFSA interest rate from 1.20% to 1.10%. This was most recently followed by equivalent decreases at MAXA Financial (from 1.20% to 1.10%). Peoples Trust has decreased its savings account and TFSA rates from 1.30% to 1.20%. Most notably, Motive Financial decreased its Savvy Savings account and TFSA interest rate from 1.55% to 1.25%.

Canadian Tire Bank is still our savings account rate leader at 1.80%, followed by Bridgewater Bank at 1.55% and EQ Bank and Wealth One Bank of Canada at 1.50%. EQ Bank still has the top TFSA (and RRSP) rate at 2.30%, although time will tell how long those rates will last.

Does EQ Bank have the easiest online account opening process?

Last summer, our forum members highlighted a few financial institutions with fully online account opening processes. This month, there’s been a new discussion about which financial institutions have the easiest online account opening process. EQ Bank takes the crown according to our forum members, with Tangerine Bank and Hubert Financial garnering some mentions as well.

GIC rates are mostly unchanged

Generally, GIC rate changes have been few and far between to start 2021.

Motive Financial has decreased its chart-leading GIC rates, leaving Wealth One Bank of Canada as the 5-year rate leader at 1.90%. Wealth One is tied for the top 3-year and 4-year GIC rates at 1.65% and 1.70%. Peoples Trust and LBC Digital have the highest 2-year GIC rate at 1.60%, and Peoples Trust has the highest 1-year GIC rate at 1.55%.

Promotions and credit card cash back offers

The latest addition to our promotions page is Tangerine Bank’s targeted 1.50% new deposit promo between March 9 and July 31. If you are a current customer, check your Insights tab to see if you have received the offer.

On our cash back website, we have a few elevated cash back offers for the rest of March: $60 cash back for signing up for a Tangerine Money-Back Credit Card or World Mastercard, and $100 cash back for signing up for one of a trio of Scotiabank credit cards: the Momentum Visa Infinite Card, Passport Visa Infinite Card, and Gold American Express Card.

Savers Roundup February 2021: New savings account options; RRSP-eligible promotions; a CDIC contest with $10,000 in prizes

Tree growing with a heart

New year, new banks

Looking for a new bank? Not only are there plenty of existing options from long-established financial institutions, but there are also brand new accounts to choose from.

New Ontario-only online bank Saven Financial (a division of FirstOntario Credit Union) has a 1.55% savings account and a set of GICs that include a 2.05% 5-year GIC.

Neo Financial, which launched last year, no longer forces you to apply for its credit card before you can open a savings account, although you must still use its mobile app to open the savings account for now. Neo Financial’s savings account, which is technically held behind the scenes by Concentra Bank, has an interest rate of 1.55%.

Lastly, Concentra Bank has its own savings account with a 1.55% interest rate, but for now this savings account is only available if you have a GIC with them.

1.55% is the second highest savings account interest rate on our comparison chart, whereas 2.05% for a 5-year GIC is better than any other rate on our GIC comparison chart.

Promos before RRSP season ends

Are you looking for a place to make your RRSP contributions before the March 1, 2021 deadline for the 2020 tax year? There are quite a few RRSP-eligible promotions on our promotions page, including the following:

More reading: Retirement savings rules, a CDIC contest, and tax credits

Savers Roundup January 2021: TFSA and RRSP season in a low-rate environment

New year budgeting

What a difference a year makes for rates

Last January, we were talking about a 3.30% savings account at LBC Digital, and every financial institution on our savings account comparison chart had an interest rate of at least 2.00%, with the exception of Canadian Tire Bank. Today, Canadian Tire Bank leads our chart with a savings account interest rate of 1.80%, and most other rates are closer to 1.00%. Just last month, there were more rate decreases at LBC Digital and MAXA Financial, and Hubert Financial even decreased its rate twice in 7 days.

12 months ago, 5-year GIC rates were nearing 3.00%, and there was even a 1-year GIC promo at 3.00%. Today, we don’t even have a 5-year GIC at 2.00%. Although, you might not feel the impact of fluctuating rates as much if you’ve set up a GIC ladder.

But there is hope around rates, and not just for those who are in the market for a mortgage!

EQ Bank’s recently launched TFSA (and RRSP) offers the best rate around at 2.30%. They are also offering that rate for a TFSA or RRSP 3-month GIC. Even if you’re skeptical of how long the rate will last at 2.30%, EQ Bank doesn’t yet have any transfer-out fees.

Tangerine Bank continues to play the promo game, with January’s targeted new deposit promo offering 1.75% until May 31, 2021. Our promotions page features some other usual suspects such as Simplii Financial and CIBC, as well as a 1% transfer-in bonus from Meridian Credit Union for TFSA and RRSP funds.

Lots more personal finance news

Savers Roundup December 2020: Registered accounts at EQ Bank; tax planning; a box of chocolates!

Chocolate money

Canadian Tire Bank is still on top

We might end the year with Canadian Tire Bank still atop our savings account comparison chart with an interest rate of 1.80% — a rate that it has maintained since April 2020. It has led our chart since August 21, 2020 amidst consistent interest rate drops at all other financial institutions. Over just the past month, there have been decreases at Peoples Trust (from 1.35% to 1.30%), Outlook Financial (from 1.30% to 1.20%), AcceleRate Financial (from 1.30% to 1.20%), Implicity Financial (from 1.35% to 1.20%), and Ideal Savings (from 1.21% to 1.01%).

Canadian Tire Bank has, however, given up its lead for a TFSA to EQ Bank…

Registered accounts have arrived at EQ Bank

Just in time for the end of the year, EQ Bank has launched TFSA and RRSP savings accounts with a 2.30% interest rate. Both the TFSA and RRSP flavours currently have a 3-month GIC offer at 2.50%, which is higher than EQ Bank’s own 10-year GIC rate and all of the GIC rates on our comparison chart.

EQ’s splashy TFSA and RRSP rates are likely teaser / promo rates. In case you are planning your next move after a potential rate drop, for now their registered accounts don’t appear to have any transfer fees.

The TFSA December manoeuvre

The upcoming new year also comes with new TFSA contribution room for Canadian adults, and the 2021 limit will once again be $6,000. As always, if you’re looking to transfer existing funds, consider what we like to call the TFSA December manoeuvre, which involves withdrawing TFSA funds at the end of a calendar year to open up contribution room on January 1. That way you avoid the administrative hassle and potential fees of a direct TFSA transfer between financial institutions.

Personal finance is like a box of chocolates