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