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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”.

The PC Money account is still the top rate on our savings account comparison chart at 3.50%. Wealth One Bank of Canada recently increased its regular savings account (and TFSA) interest rate from 2.50% to 3.00%, joining a 5-way tie in second place. If we count EQ Bank’s 4.00% rate when you have direct deposit, that makes it the top non-promo rate.

The latest round of targeted new deposit promos reported by our forum users at Simplii Financial and Tangerine are somewhere between 2.25% and 4.00%, which is not just a wide range but also significantly down from the high of 6.00% in early 2024. The highest promotional rate we are currently aware of is 5.00%, which you can get as a new client at both CIBC and Coast Capital.

Rate leaders on our GIC comparison chart are little changed from this time last month, although we’ll see if the next Bank of Canada policy interest rate announcement on Wednesday, March 12 shakes things up.

More options for $0 trade commissions

There are now 4 Canadian online brokerages that offer fee-free self-directed trading. Questrade made a splash in February when it dropped its trading fees to $0, along with a short-lived (and now over) transfer bonus of 3% on the first $10,000. It has now joined Wealthsimple, National Bank Direct Brokerage, and TD Easy Trade in the world of commission free trading. While they might not all have a transfer promotion at any given time, they all currently reimburse any transfer fees. Thus, competition is heating up for your investment accounts.

Our readers care about “no-forex transaction fee” credit cards

Last month’s poll received several hundred responses, and 75% of you said that “no foreign currency transaction fees” is an important credit card feature. We keep a listing of such credit cards, although recent political tensions and an increasing desire to “buy Canadian” are reducing Canadians’ international spending, at least temporarily, and at least for US purchases.

Interest rate cuts appear to be slowing down. Near the end of January, the Bank of Canada had a key interest rate drop of 0.25%, marking the 6th decrease for a total of 2.00% since the recent peak in July 2023. For those financial institutions (on our chart) who decreased their savings account interest rates since the January 29 Bank of Canada drop, the decreases averaged 0.18%.

EQ Bank decreased its regular savings account interest rate from 1.75% to 1.50%, but upped the rate if you set up direct deposit to the account from 3.50% to 4.00%. The next highest non-promo rate is with the PC Money account, which offers 3.50%.

For a TFSA, Saven Financial actually increased its interest rate to 3.40% (from 3.15%, although it originally went up to 3.50%), putting it into a tie with Oaken Financial for the top TFSA rate.

Currently, all of the GIC rates we track are under 4.00%, although you can still get 4.00% or slightly more through a GIC broker.

Promo rates are drying up, in relative terms

Only a few months ago, you could get up to 6.00% in a new savings account, and 5.00% or more in some “new deposits for existing clients” promos. Nowadays, the new client offers at promo mainstays Tangerine Bank and Simplii Financial are for 4.50% and 3.90% respectively. The highest reported new “Tangerine lottery” promo for existing clients is 3.85%.

However, as listed on our promos page, you can still get:

• 5.00% at CIBC for the first 4 months
• 5.00% at Coast Capital until April 30
• 4.75% at Motive Financial for the first 120 days (if you open an account before February 14)
• 4.70% at Manulife Bank until April 30

Poll result: how much is in your TFSA?

Last month, we asked our newsletter readers how much is in their TFSA. We got almost 500 responses, resulting in the following:

• Less than $20K: 6%
• $20K to less than $50K: 4%
• $50K to less than $100K: 15%
• $100K to less than $200K: 63%
• More than $200K: 11%

(Total is 99% due to rounding.)

Kudos to anybody who has contributed to their TFSA in any way so far!