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Another round of cuts

In terms of savings account interest rate changes, it had been a relatively slow drop since the last Bank of Canada policy interest rate cut on March 27. However, since June 1st, 10 out of the 17 financial institutions on our comparison chart have decreased their interest rates, including Hubert Financial and Alterna Bank, who have both dropped their rates twice this month, to rest at 1.80% and 1.69% respectively. Oaken Financial’s savings account interest rate decreased from from 2.00% to 1.65%. Only 6 out of the 17 financial institutions we track now have a savings account interest rate of 2.00% or higher.

For the time being, Bridgewater Bank has the top savings account interest rate on our chart at 2.10%, while Motive Financial leads the TFSA rates at 2.05%.

GIC rates have continued to trend lower, with the current leaders being:

• 1-year GIC at 2.00% at AcceleRate Financial, Achieva Financial, Implicity Financial, MAXA Financial, and Outlook Financial
• 2-year GIC at 2.10% at Wealth One Bank of Canada
• 3-year GIC at 2.20% at Wealth One Bank of Canada
• 4-year GIC at 2.20% at Achieva Financial, Hubert Financial, Peoples Trust, and Wealth One Bank of Canada
• 5-year GIC at 2.30% at Hubert Financial, Oaken Financial, and Peoples Trust

There are some promotions left

Promotions have been drying up, but there are still some available, including:

• CIBC: 2.50% interest for 120 days when you open your first eAdvantage Savings Account
• Tangerine Bank: 2.50% interest for 5 months when you open your first Tangerine Savings Account

We have a page to track all current promotions, including savings accounts, chequing accounts, GICs, and our cash back offers.

Credit card reward program devaluations too!

Recently, some Rogers Mastercard devaluations took effect on June 2. If you use the Rogers Mastercard for purchases in foreign currencies, you might want to review our list of credit cards with no foreign currency exchange transaction fees.

Some changes are coming soon on August 1 to the Canadian Tire Triangle Mastercard: its earn rate on grocery store purchases is going up from 1.00% to 1.50%; but its earn rate on non-Canadian Tire, non-grocery store purchases is going down from 0.80% to 0.50%.

Interesting forum threads to catch up on

• Sorting out the details of RRSP withholding tax
• Pace Securities shut down, leaving many investors hanging dry
• Where to invest $7,000?

The slow but steady downward march for interest rates

Relative to previous months, it’s been quiet for savings account interest rate changes lately. Over the past month, we’ve seen savings account interest rate decreases at Alterna Savings, Ideal Savings, Motive Financial, motusbank, and Wealth One Bank of Canada. There was even an increase in rates at Canadian Tire Bank.

Our comparison chart still has 13 out of 17 financial institutions with rates of 2.00% or more.

Frequent GIC rate leader Oaken Financial decreased its GIC rates several times over the past few weeks. In general, the spreads between a given financial institution’s 1-year and 5-year GIC rates have been getting smaller. The current top rate on our GIC comparison chart for a 1-year term is 2.15% at Hubert Financial, and the 5-year term leaders are Peoples Trust and Oaken Financial, both at 2.40%.

Luminus Financial actually has better GIC rates across the board than any other bank on our chart, but be sure to review their fees, which are reportedly higher than others.

Promotions to get you through the next few months

If you don’t mind moving your money around, you might find these short-term promotions tempting:

• Manulife Bank: 2.60% for the first 5 months if you open an Advantage Account before May 22, 2020. Unlike other financial institution savings account promos, the 2.60% rate is not guaranteed, and will drop if their base rate drops.
• RBC Royal Bank: 2.25% for the first 3 months in a new RBC High Interest eSavings account
• Existing Tangerine Bank customers: Targeted 2.50% new deposit promo for 5 months starting May 1, 2020
• New Tangerine Bank customers: 2.80% savings account interest rate for the first 5 months
• Scotiabank: up to $300 cash for opening an Ultimate Package or Preferred Package chequing account

More news: your taxes are almost due; coming soon for Hubert Financial; a caution on Credit Verify

• The delayed personal income tax filing deadline of June 1, 2020 (with September 1, 2020 as the deadline to pay any amounts owing) is fast approaching. If you still haven’t done your taxes, you might be interested in our 2019 survey of Canadian personal income tax filing habits, and review of free Canadian income tax software options
• Hubert Financial has unveiled its customer roadmap: two-factor authentication and online user interface improvements (including setting GIC maturity instructions online) are coming; no plans for chequing accounts or Interac e-Transfers
• Beware of using Credit Verify to check your credit score

Savings account interest rates are still holding up

After decreasing the key interest rate by 1.00% in the first 2 weeks of March, the Bank of Canada lowered it one more time by 0.50% to rest at 0.25%, where it has stayed through the April 15 scheduled rate announcement. Although we have seen related decreases to high interest savings account rates across our comparison chart, financial institutions have not yet passed on the full rate decrease via the savings accounts, at least not yet. See this graph tracking the key interest rate against 2 of the more consistent financial institutions for savers over the past 9.5 years (Hubert Financial and Achieva Financial), and how the gap has widened:

Last month, we were musing that we would be lucky to make it out of March with a 2.00% savings account, but 15 of 17 financial institutions on our chart currently have regular savings account interest rates of at least 2.00%. LBC Digital leads the pack at 2.25%, while Motive Financial has the highest TFSA rate at 2.20%. Peoples Trust has even increased its regular savings account and TFSA interest rates from 1.80% to 2.00%, reversing an equivalent decrease from March 6.

Some GIC rates actually increased, if only temporarily

Although GIC rates have generally dropped, several financial institutions increased their rates last month.

Tangerine Bank provided some shocking GIC rate increases by as much as 1.70%, with their 5-year GIC peaking at 3.20%, only to drop back to the middle of the pack a week later.

Oaken Financial had increased most of its GIC rates for about 1 month before decreasing them a bit, settling for what are currently the highest rates on our GIC comparison chart, with a 1-year GIC at 2.50% and 2- through 5-year GICs all at 2.65%. Remember that you can see a financial institution’s GIC rate history by clicking on the links in the “Updated” column on our chart. [Oaken Financial announced GIC rate decreases, effective 5 days after this article was published.]

If you’re looking at the short term, there are at least 2 current 2.45% 90-day GIC offers, from EQ Bank and Oaken Financial. [EQ Bank’s 90-day GIC rate dropped to 2.15% one day after this article was published.]

BC-only credit union Vancity has a promo for a 1-year 3.00% GIC. [Vancity ended this promo one day after this article was published.]

New deposit promos

If you have a Tangerine Bank account, check the online interface to see whether you have the latest 2.80% new deposit promo, which started April 3. They are offering the same 2.80% savings account interest rate for the first 5 months to new clients.

DUCA Credit Union (Ontario only) has a promo offer of 2.50% on new deposits to an Earn More Savings Account between April 2, 2020 and March 31, 2021. They also have a 1-year 2.75% GIC available until June 30, 2020 for customers who currently have funds in an Earn More WINTER Promo Savings Account.

As always, we have a dedicated page to track all known promotions.

Good news amidst the pandemic

• In case you missed it, the personal income tax filing deadline has been extended to June 1.
• US dollar deposits will be included in CDIC coverage starting April 30.
• You can donate your unused Dream Miles Air Miles to Kids Help Phone and Food Banks Canada.

Sub-2.00% savings accounts are soon to be the norm?

Only a couple of months ago, we were debating how long LBC Digital’s 3.30% savings account interest rate would last, and now we’ll be lucky to make it out of March if any of the financial institutions on our chart have a 2.00% savings account. On March 4, 2020, the Bank of Canada lowered its key interest rate by 0.50%, and less than 12 days later in an unscheduled rate decision, it lowered the rate by another 0.50%.

Most financial institutions have lowered their savings account interest rates, with the biggest drops from LBC Digital (from 2.80% to 2.25%) and Motive Financial (from 2.80% to 2.20%). Ideal Savings currently leads our chart at 2.31% for both the regular savings and TFSA accounts, but look for more changes on our chart in the coming days and weeks, if not by the time today is over. The Bank of Canada might still lower its rate further — consider that the US government just lowered its target rate for a third time in March. Some Canadian financial institutions haven’t even adjusted their rates after the first cut, and most of them haven’t yet reacted to the second cut.

The last time interest rates were this low, 1.75% was the top savings account interest rate (until EQ Bank launched), and Zag Bank was still a going concern.

Rare remaining higher rates

Targeted, limited-time higher rate offers, especially for net new deposits, started to become a hot topic of discussion on our site in 2013. 7 years later, this trend has continued. Tangerine Bank’s latest targeted new deposit promo (up to 3.00% for 4 months) started on March 2nd. Simplii Financial’s 2.80% offer ends on April 30, 2020, although someone has reported receiving an offer for 3.15%. DUCA Credit Union (Ontario only) has a 3.00% new deposit promo that recently got extended to June 30, 2020. All of these are listed on our promotions page. They also all appear to keep the total rate the same even if the base, non-promo rate drops. Be careful of other offers where the total rate can drop when the base, non-promo rate drops.

GIC rates have been dropping across the board, although not as deeply as savings accounts. This might be a good time to review whether you want to lock in any GIC rates before we see further rate drops. Oaken Financial and Wealth One Bank of Canada are at or near the top on our GIC chart for 1- through 5-year rates. The most recent round of Oaken Financial GIC rates decreases took effect on March 13, although they gave people 1 week of advance notice. EQ Bank is currently offering a 2.45% 3-month GIC, 2.45% being its previous savings account interest rate until it was decreased to 2.00%.

Good news: you might have uncashed cheques from the Government of Canada

The CRA online My Account area now has a section allowing you to see whether you have any uncashed cheques from the government. Be sure to switch to direct deposit in order to minimize your chance of future uncashed government cheques.

Changes to credit cards and more

• The Rogers World Elite Mastercard and Rogers Platinum Mastercard are popular with those who make purchases in foreign currencies. The cash back earn rate for both cards is getting worse starting June 2, 2020.
• Discussion thread: what’s the best cash back credit card for any purchase?
• Have you started thinking about filing your income taxes yet? As per our survey last year, the average Canadian files in early April.
• We are currently offering $65 cash back if you open a Scotiabank Ultimate Package Chequing Account and $55 cash back if you open a Preferred Chequing Account