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Rewind to January 2023: the headline inflation number in Canada was 6.3% (from December 2022). The highest savings account interest rates on our comparison chart were Ontario-only Saven Financial at 3.75%, Oaken Financial at 3.40%, and Outlook Financial at 3.35%.

Today, Ontario-only Saven Financial leads the pack at 4.15%, followed by Motive Financial at 4.10%, and a trio of options at 4.00%: Neo Financial, Wealth One Bank of Canada, and Wealthsimple. You can even get 4.00% at EQ Bank if you set up direct deposit, or up to 4.75% in a brokerage investment savings account. Savings account interest rates increased modestly in 2023, but the year-over-year inflation number from December 2023 was 3.40%; thus your humble savings account can currently beat inflation! How’s that for some good news to start off 2024?

The beginning of the year signals TFSA and RRSP season, including another $7,000 of TFSA contribution room. If you’re looking for a short-term strategy, check our promotions page, with new promos this month for as high as 5.75%.

GIC rates have peaked; how will 2024 go?

GIC rates appear to have peaked in November and December. More than half of the financial institutions we track decreased their GIC rates in the first two weeks of January. Furthermore, the Bank of Canada governor says that the key interest rate will decrease at some point in 2024.

Shorter-term GICs are still offering better rates than longer-term GICs. 8 financial institutions on our GIC comparison chart will give you at least 5.40% on a 1-year term right now, whereas last year, the 1-year leader was a single financial institution at 5.30%. The 4-year and 5-year GIC rates are lagging behind, but you can still get 5.00% at Wealth One Bank of Canada, and slightly higher if you use a GIC broker.

Neo Financial ups the competition

For the second time in less than a month, Neo Financial has raised its savings account interest rate, which now sits at 4.00% and is also newly available in Quebec. In Quebec, this ties it with the Wealthsimple Cash account for the highest interest rate on our savings account comparison chart. In the rest of Canada, that puts it in a 3-way tie behind Motive Financial’s 4.10% interest rate.

One of the accounts tied with Neo Financial at 4.00% is Wealth One Bank of Canada, which increased its regular savings account and TFSA interest rate from 3.65% to 4.00% last week.

KOHO Financial: Paying $4 per month earns you 5.00% interest

KOHO Financial’s account plans have changed again. Its Easy plan is free and offers a 3.00% interest rate on the balance in your account. However, you can get a 5.00% interest rate if you pay $4 per month for its Essential plan. This brings up the question of whether you would pay to get a higher interest rate, and reminds us of the forever debate of whether you would pay an annual fee for a credit card to get better rewards.

If you consider only the raw numbers, paying $4 per month could make financial sense. If your alternative is a 4.00% savings account elsewhere, you would need to keep an average of more than $4,800 in the account for the month to come out ahead with KOHO Financial’s Essential plan. (The difference is 1.00% of $4,800, divided by 12 months.) If you’re comparing against the KOHO Financial Easy plan’s interest rate of 3.00%, then you’ll need to keep more than $2,400 in the account to make the monthly fee worthwhile.

Holiday headlines

• Not all cash ETFs are created equal
• Saven Financial (Ontario only) now has an FHSA offering 6.00% until April 1, 2024
• The EQ Bank Card is now available in Quebec
• Oaken Financial is launching TFSA and RRSP accounts in January 2024
• Only one non-broker 6.00% GIC remains on our GIC comparison chart

Neo Financial’s Neo Money account has been languishing near the bottom of our savings account comparison chart, having kept its rates the same — despite a rising interest rate environment — for over a year. However, Neo Financial just released its High-Interest Savings account, and that account just got an interest rate increase to 3.75%.

Elsewhere, Canadian Tire Bank has increased its regular savings account and TFSA interest rate from 3.50% to 3.70%, while Ideal Savings increased its regular savings account interest rate from 1.01% (yes, 1.01%) to 3.60%, presumably to match merger partner Hubert Financial.

Motive Financial continues to top our chart with a 4.10% rate for both its regular savings and TFSA accounts. Wealthsimple is garnering more attention on our discussion forum thanks to its 4.00% Cash account interest rate and growing feature set.

GICs for 6.00%+

Both Motive Financial and Oaken Financial have hit new highs with 6.00% 1-year and 2-year GICs to lead our GIC comparison chart, and you can even get over 6.00% for a 3-year GIC via a GIC broker.

Ontario-only Omnia Direct is offering 6.00% for a 6-month GIC, 5.90% for 1-year GIC, and 6.05% for an 18-month GIC.

Latest promos for new deposits

Some recently added promotions to our promos page include:

• HSBC new deposit promo until January 12, 2024: 5.85% on balances up to $24,999; 6.35% on balances of $25,000 or higher
• Manulife Bank new customers: 5.25% savings account interest rate for the first 4 months if you open an account by December 15, 2023
• DUCA Credit Union (Ontario only): 5.75% (previously 6.25%) on new deposits to an Earn More Savings Account
• WFCU (Ontario only): 5.69% for 4 months on new deposits in an ALTO Savings Account opened by November 30, 2023

Odds and spends

• Oddly, LBC Digital is removing the ability to send Interac e-Transfers
• FHSA is coming to Hubert Financial. Who else offers an FHSA?
• Scotiabank credit cards are back on our cash back website, with up to $250 on successful sign-up

Wealthsimple and Manulife Bank are new to our chart

We’ve made two additions (Wealthsimple and Manulife Bank) and one removal (AcceleRate Financial) on our savings account comparison chart. AcceleRate Financial merged with Hubert Financial, and the merger has been the hottest topic on our forum over the past month.

Wealthsimple’s Cash account offers a minimum of 4.00% (with higher rates if you meet minimum thresholds for combined deposits across Wealthsimple’s offerings), which is just below rate leader Motive Financial at 4.10%.

Manulife Bank’s 2.85% savings account interest rate is a bit middling, but is nationally available and thus on the consideration list for Quebec residents.

How widespread are the Tangerine Bank and Simplii Financial promos for existing customers?

Net new deposit promos for existing customers at Tangerine Bank and Simplii Financial have become a staple on our promotions page. But just how prevalent are these promos? We ran a quick poll and discovered that 78% of respondents have received a Tangerine Bank promo at least once per year, versus 34% for Simplii Financial customers. 19% of Tangerine Bank customer respondents have received promos but less than once per year, versus 45% for Simplii Financial customers. And 3% of Tangerine Bank customer respondents have never received a new deposit promo, versus 21% at Simplii Financial.

Some GIC terms don’t need to be in full-year increments

Motive Financial is a financial institution that allows you to open GIC terms in partial year increments. Its 1-year rate is for terms of 12 months to less than 24 months; its 2-year rate is for terms of 24 months to less than 36 months; its 3-year rate is for terms of 36 months to less than 48 months; and so on.

For example, Motive Financial is currently offering a 2-year GIC for 5.70% and a 3-year GIC for 5.40%. If your desired term is closer to 3 years than 2 years, you could open a 35-month GIC (1 month shy of 3 years) for the 5.70% rate and end up with more money after 3 years than you would have in the 3-year / 36-month term.

More news for savers

• Neo Financial appears to have a new high interest savings account
• DUCA Credit Union’s new deposit promo is now up to 6.25% until January 31, 2024
• On October 1, the minimum balance to waive the monthly fee on the Scotiabank Ultimate Package chequing account increased from $5,000 to $6,000

The new Hubert Financial has almost arrived

Following the 2022 merger of Access Credit Union (the parent of AcceleRate Financial), Noventis Credit Union, and Sunova Credit Union (the parent of Hubert Financial), the merger of the beloved online divisions are upon us. Starting on September 22, the AcceleRate Financial brand will be retired and merged into Hubert Financial.

The new Hubert Financial will see a whole raft of changes. Some of the changes are good, such as free Interac e-Transfers and the addition of mobile cheque deposits. Also, the popular 1-year quarterly redeemable GIC is staying. However, at least for the time being, there will be no more ability to transfer funds to/from external accounts (from within the Hubert online interface) and no more self-serve option for GICs within online banking.

All prepaid roads lead to KOHO… or EQ Bank or Wealthsimple

First Mogo and now STACK. After becoming significantly worse, the STACK Prepaid Mastercard has fully shut down (as of September 11), and is directing all users to KOHO. When it comes to prepaid cards, KOHO isn’t the only game in town, as EQ Bank and Wealthsimple have somewhat similar offerings. These prepaid cards combine some features of a credit card (including cash back rewards) and some features of a standard bank account (including a decent interest rate on your savings), thus sitting in an interesting category of their own.

If you’re willing to pay a monthly fee, the $9 and $19 KOHO plans offer no foreign currency exchange transaction fees, and the $19 plan also offers a 4.5% interest rate on your entire balance. 4.5% would be the highest non-promo rate on our savings account comparison chart but of course you’ve got to get out your calculators to factor in the monthly fee.

More 6.00% rates

In our last Savers Roundup, we highlighted Simplii Financial’s 6.00% rate (for 5 months) for new customers. Since then Tangerine Bank has come out with several 6.00% rates:

• New customers get 6.00% for the first 5 months
• Some existing customers are now getting 6.00% on new deposits in the latest targeted promo
• New and existing customers can get 6.00% on an 18-month GIC

Elsewhere, you can get nearly 6.00% at a few other financial institutions, including but not limited to:

• Wealth One Bank of Canada has 5.98% 1-year and 18-month GICs until October 31
• Meridian Credit Union is offering 5.75% for the first 5 months in a new savings account
• Motive Financial has a 5.75% 120-day GIC on new money

In related news, three founding investors of Wealth One Bank of Canada have been ordered to sell their shares.