10 articles General

Savers Roundup November 2017: Meet Simplii Financial, Motive Financial’s GIC rates, and new promos and rate increases

Simplii Financial, formerly known as PC Financial

On November 1, 2017, PC Financial officially re-launched as Simplii Financial. The Simplii Financial rebrand was a result of CIBC and PC Financial officially ending their banking partnership, with CIBC taking over PC Financial’s banking customers.

Customers were assured that day-to-day banking would be largely the same, at least to start. There were 2 main positives in terms of new “features” as well: free Interac e-transfers and a 3.00% net new deposits promo.

There were still some reported glitches and complaints that nothing material had changed. Simplii Financial’s regular savings account and TFSA interest rate remains at a paltry 1.00%, in lock step with Tangerine. We don’t expect that to change, but it’s encouraging to see them trying to differentiate in other ways, such as with free e-transfers.

Motive Financial branding change follow-up from Canadian Direct Financial

It has been 7 months since Canadian Direct Financial re-branded to be Motive Financial. This was related to its parent company’s (Canadian Western Bank) sale of Canadian Direct Insurance 2 years prior. Motive Financial has so far appeared to be no different than Canadian Direct Financial, except for its name, appearance, and some additional marketing lingo. There have been no new account offerings, and its online interface is the same.

Motive Financial’s regular savings and TFSA rates have not changed since 2015; while it was once a leader on our comparison chart, it is now closer to the middle or bottom. However, in spite of the loss of the 0.25% GIC rate bonus for Canadian Direct Insurance customers, its GIC rates have rocketed to be close to the best or the best in the industry. Its current 5-year GIC rate of 3.02% (for non-registered, RRSP, and TFSA accounts) is unmatched against any publicly listed rate — in fact, its 2, 3, and 4-year GIC rates also beat any other publicly listed rate.

Is there more brewing at Motive Financial? We’ll see whether it can start to differentiate itself again in 2018.

Wealth One Bank of Canada: added to our comparison chart

We covered Wealth One in last month’s roundup. This month, after many requests from forum members, we’ve added it to our comparison chart! Its regular savings interest rate of 2.50% is the top non-promo rate in the country, whereas its TFSA interest rate of 0.85% is the lowest on our chart.

More new deposit promos

In addition to Tangerine’s quarterly, targeted net new deposits promo and Simplii Financial’s launch promo (mentioned above), there are a few other current new deposit promos:

These are all listed on our Promos page.

More savings account interest rate increases

We’ve also seen a few more savings account interest rate increases in November:

Savers Roundup October 2017: Rate increases and surprise decreases, Wealth One, and cross-border friendly credit cards

Rate movements: Some increases, some surprising drops

It has been interesting to see the impact of the Bank of Canada’s key interest rate hikes (amounting to a total of 0.50%) from July and September. Outlook Financial, Implicity Financial, AcceleRate Financial, Hubert Financial, MAXA Financial, and Achieva Financial have all increased their regular savings and TFSA interest rates by 0.15%. Ideal Savings increased its regular savings and TFSA interest rates by 0.25%.

Oddly, Oaken Financial decreased its regular savings interest rate by 0.25%; Peoples Trust dropped its TFSA rate by 0.10%; and Meridian Credit Union decreased its regular savings and TFSA rates by 0.10% just before the July key interest rate hike and hasn’t change them since!

Even with the increases, it doesn’t seem like savers are seeing much benefit from the key interest rate hikes despite all of the competition!

You can view a list of the changes in our news digest and view current rates in our comparison chart.

Wealth One High Interest Savings Account: 2.50%

A discussion about Wealth One began in the forum about 1 year ago when the bank first opened. Wealth One currently has branches in North York, Markham, and Vancouver and is available to all Canadians outside of Quebec, with a particular focus on Chinese-Canadians. While the verdict is still out on its customer service, Wealth One is a member of the Canadian Deposit Insurance Corporation (CDIC).

Wealth One currently offers an attractive High Interest Savings Account rate of 2.5% with no monthly fee and no minimum balance. While its TFSA rate of 0.85% is not that competitive, its regular savings rate would make it the top one on our comparison chart. Wealth One also has RRSP accounts, GICs, mortgages, loans, lines of credit, a business savings account, and business GICs.

Tangerine: new interface, Q4 retention and new client promos

Tangerine redesigned its online interface in September, and so far reviews in the forum have not been favorable. Many people have found the new site confusing, with the general consensus being that the old site didn’t need to be changed. However, over time we’ll see whether people get used to the new interface; it might simply have a steeper learning curve than usual.

In the meantime, current clients are dithering over the October / Q4 2017 retention offers. Like clockwork, net new deposit offers appeared to some clients on the 3rd business day of the quarter. This time, the rates seem to range from 2.00% to 2.75%. For those who did not receive an offer, some people have had success calling Tangerine to ask for a custom offer.

To continue the party, Tangerine is putting forth their usual bonus offerings around new mutual accounts; new savings, TFSA, or RRSP accounts; and advanced deposits for a 2018 TFSA.

Remaining credit cards that waive the 2.5% foreign currency exchange fee: Rogers, Fido, Home Trust, and HSBC

The Marriott Rewards Visa has followed the Amazon Visa by no longer accepting new applications. While existing Marriott Rewards Visa cardholder accounts remain open for now, this leaves the Rogers Platinum Mastercard, the Fido Mastercard, the Home Trust Preferred Visa, and the HSBC Premier World Elite Mastercard as the only cards that effectively waive the 2.5% foreign currency exchange fee. For some consumers who do a lot of cross border shopping (online or at brick and mortar stores) this can really add up.

The Rogers Platinum Mastercard and Fido Mastercards give you 4% cash back rewards for purchases made in foreign currencies — minus the 2.5% foreign currency exchange fee that’s effectively 1.5% back in rewards. The Rogers credit card gives you 1.75% cash back rewards on purchases made in Canadian dollars and comes with a $29 annual fee. The Fido credit card has no annual fee but gives you 1.50% cash back rewards on purchases made in Canadian dollars. The respective cards advertise that rewards can be applied to a variety of Rogers and Fido services, although you can also get the “cash back” as statement credits.

The HSBC Premier World Elite Mastercard and Home Trust Preferred Visa do not charge you the 2.5% foreign currency exchange up front. The HSBC Premier World Elite Mastercard has quite a comprehensive list of travel benefits but requires you to be an HSBC Premier client (which has its own set of requirements) and has an $149 annual fee ($50 of which is oddly waived for HSBC Premier clients — technically you could no longer qualify as an HSBC Premier client after 1 year but still have the credit card). The Home Trust Preferred Visa is much simpler with no annual fee and a straight 1% cash back rewards rate.

PC Financial transition to Simplii

As of November 1st CIBC will cut ties with President’s Choice and unveil their own digital bank called Simplii Financial, rebranding from what was previously known as PC Financial. There has not been a great deal of discussion about the changes so far. The biggest change other than the name is that the physical PC Financial banking pavilions will be closed. Other than that, the official messaging has been that account features, account numbers, and ATM access will stay the same.

Expect the “big” unveiling of the Simplii Financial website on November 1 to be rather uneventful. It will be interesting to see if Simplii will provide any meaningful changes, or whether the changeover will be similar to Canadian Direct Financial’s rebranding to Motive Financial, which has so far been a ho hum experience.

Savers Roundup April 2017: credit cards get worse, Motive Financial, and concern for Oaken Financial

Amazon Visa discontinued

Some people who make a lot of purchases across the border have found great value in the Amazon Visa. Although it only provides a mediocre 1% cash back rewards system, it does not charge foreign currency exchange fees that usually amount to 2.5%. However, as of early April 2017, you can no longer apply for this card. It’s unclear whether it is being permanently discontinued, but for the time being, this leaves the Marriott Visa and the Rogers/Fido MasterCards as the only credit cards that effectively don’t charge foreign transaction fees. Of course, if you happen to have a lot of US cash, you can always apply for a US dollar credit card so there is no conversion to Canadian dollars at all.

Tangerine MasterCard gets much worse

In the high interest savings forums, the bigger news is that the Tangerine MasterCard gets much worse starting on April 29, 2017. Although you still get 2% cash back in up to 3 merchant categories, all other purchases get 0.5% cash back instead of 1.0% cash back. Also, the foreign currency exchange fee, which was previously at 1.5%, goes back to the industry standard 2.5%. This was a well-received card when it first came out 1.5 years ago, but this latest news has significantly lowered its appeal.

Tangerine’s quarterly offer

Despite sinking profits, a less appealing credit card offering, and savings account interest rates so non-competitive that it no longer appears on our comparison chart, Tangerine is still heavily discussed on this site. This is partially because of its net new deposits promo of up to 3.25% every quarter.

With some sleuthing on the Tangerine site and an analysis of past promos (for 6 straight quarters now), people have been able to predict within days when a net new deposit promo is coming. A few days before the next quarterly promo starts, savers transfer their money to another financial institution or even to a Tangerine chequing account, and then transfer their money back to Tangerine savings after the promo starts. Not everybody is eligible for the promotion, though, and it remains a mystery as to who gets targeted and for what rate. If you’re not targeted, you can always contact Tangerine and ask for a better rate.

Canadian Direct Financial rebrands to Motive Financial

After a moderate amount of hoopla including an announcement video, Canadian Direct Financial rebranded to Motive Financial. Despite some marketing words about “recognizing and rewarding savers” so far nothing has changed in terms of account offerings, features, rates, or even website functionality. Savers are now waiting to see whether the rebrand actually means anything for them.

Ideal Savings arrives on the scene

Ideal Savings, a division of Carpathia Credit Union in Winnipeg, burst onto the scene with an attractive 2.50% savings account and TFSA interest rate on November 18, 2016. The kicker was that the rate was guaranteed until the end of 2017! It took only 11 days, though, for the rate to drop to 2.30%, and less than a month for a further drop to 1.75%, where it has stayed until now. (Note that savers who got in early still benefit from the guaranteed original rate.) Those were unprecedented initial rate drops, even compared to the 3 months it took for EQ Bank‘s initial drop from 3.00% to 2.00%. Regardless, Ideal Savings is a welcome addition and provides yet another option for savers.

Trouble at Home Capital Group and concern for Oaken Financial

Bad news, including improperly handled financial disclosure and the need to receive a $2 billion loan, has hit Home Capital Group recently and caused massive stock drops of over 80% over the course of 1 year, and a dramatic 65% drop in 1 day. What does this have to do with savers? Potentially nothing. But it is the parent of Oaken Financial, its CDIC insured deposit arm. (Technically, Home Capital Group is the parent to Home Trust, which is best known for offering mortgages, but takes deposits through Oaken.)

All this trouble at Home Capital Group has some savers anxious. While the debate rages on about how reasonable the concern is, one undoubtedly material effect is that Oaken raised its savings account interest rate from 1.50% to 1.75% on April 25, 2017!

Retention and new deposit promos, Alterna’s launch, and the bloom is off the EQ rose?

In January 2016, EQ Bank launched to great fanfare. After years of seeing continuously dropping high interest savings account rates, were things turning around for Canadian savers? EQ Bank made a splash with a 3% interest rate, and quieted some skeptics when it boldly stated that it “is not a promotional rate; it is our current everyday rate”.

It took only 3 months for that 3.00% rate to drop to 2.25%, and in August it dropped further to 2.00%.

In addition to dropping its rate, EQ Bank has received mixed reviews, closed off new registrations for weeks, has no TFSA account, is not available in Quebec, and has no transit number (so that transfers cannot be initiated outside of EQ). It also removed its $25 birthday bonus, leaving one of our forum members to lament that the bloom is off the EQ rose.

However, EQ Bank got a lot of customers, got a lot of publicity, and still has the highest interest rate on our comparison chart.

Another recent addition to our chart is Alterna Bank, which has in some ways been an anti-EQ offering. Alterna is available to Quebec residents, added a TFSA option in July, and quietly became the only Canadian financial institution to increase its rate in 2016 (at least among those that we track). It now sits #2 on our chart just 0.05% below EQ, yet you hear almost nothing about Alterna in the media.

For those chasing the highest rates, new deposit and retention promos continue to be the story at PC Financial and Tangerine. PC Financial’s latest promo is 2.25% on new deposits until December 31, 2016. Tangerine’s current new deposit promo expires on September 30, and offers somewhere between 1.75% and 3.25%. No one has yet discovered what Tangerine uses to determine what rate it will offer you. But many people have learned to play the game of withdrawing their money before a promo ends in order to maximize their return on the next new deposit promo. And for those who don’t want to move their money around, they’ve learned that Tangerine will often give you a higher rate… if you ask. Add savings account interest rates to the list of things you need to negotiate these days, along with mortgage rates and TV, internet, and cell phone bills.

All of this song and dance around PC Financial and Tangerine is necessary because their base rates are a paltry 0.80%. This puts them so far off the chart that we have completely dropped them off the page. Not everybody in our forums agree that those banks should have been dropped — after all, there is more to an account than an interest rate — but for now you’ll have to find them on the promos page.

And speaking of promos, many other banks have gotten into the game, especially around new deposits and new accounts. DUCA, Meridian Credit Union, Luminus Financial, and BC credit unions are among those with current promotions.

In other news, if you’re looking for a free chequing account, our long-time forum member Doug has done a huge update to the free chequing account comparison chart. Be sure to check that out, and thank Doug for his hard work!

CanadianForex review: great foreign exchange rates and support

I’ve been using XE Trade for a few years for personal currency exchange and international funds transfers for my small business. I started to try CanadianForex a few months ago and have been very pleased with its rates and support.

The basic premise is relatively straightforward and the same as XE Trade: you submit currency exchange deals through their online interface, send them the money in the source currency, and they deliver the money in the destination currency to your account or a foreign account within a few days. Therefore, you can use it for currency exchanges between your own accounts, or to send money internationally (as long as it’s between different currencies). Especially for sending money internationally on a regular basis, using an online service is often much more convenient than a traditional bank.

Here’s my review of CanadianForex, specifically compared against XE Trade.

Setup

Creating an account at CanadianForex is very straightforward, although just like XE Trade, you have to provide (for a business account, at least) some sensitive information to them, including:

  • A signed bank statement
  • A client agreement form signed by 2 directors
  • A copy of your driver’s licence

Exchange rates

I’ve found CanadianForex’s exchange rates to be better than XE Trade, at least for transferring between Canadian dollars and: US dollars, Euros, and Australian dollars. CanadianForex’s standard fee is $15 for transactions under $10,000 (and no fees for transactions above $10,000); while XE Trade usually charges no fees at all, CanadianForex is still better (as of January 2015) by a significant amount for trades that are more than a few hundred dollars.

Some example comparisons between CanadianForex and XE Trade after deducting the CanadianForex fee:

  • Sending approximately $5,500 CAD to Australia (AUD): the recipient got 40 AUD more with CanadianForex
  • Sending approximately $8,000 CAD to Germany (EUR): the recipient got 48 EUR more with CanadianForex
  • Sending approximately $7,000 CAD to the United States (USD): the recipient got 50 USD more with CanadianForex

In the case of sending money to Brazil, CanadianForex still charges the same $15 fee, whereas XE Trade charges an additional $22 wire fee. This resulted in similar savings as above with CanadianForex.

I’ve also found CanadianForex’s exchange rates to be slightly better than RBC’s foreign exchange rates, at least for transferring US dollars to Canadian dollars within my business account. However, the difference was only a few dollars for some of sample amounts I tested.

Process

The trades happen completely online, although you have to speak to a CanadianForex representative over the phone to complete your initial account setup, and you also receive a verification phone call from them after your first trade.

To book a trade, you must first set up recipients, including their bank account information. Then, you get a quote for the exchange you’d like to make, and click a “Finalise” button. If you’ve set up direct debit, the money will be removed from your account by the next business day. Otherwise, you send CanadianForex the money using your bank’s bill payment system. Once CanadianForex receives the money, they will send an Electronic Funds Transfer (EFT) or wire payment, depending on the destination country, to the recipient.

Customer service

You can contact CanadianForex by phone or e-mail. This is the same as with XE Trade. However, CanadianForex really emphasizes personal contact by assigning you a specific account manager (for a business account at least) and making you speak to them so that they can walk you through their services over the phone. With XE Trade you can set up your account and trade for years without ever needing talking to a person, let alone be assigned a specific contact.

I once had an issue when XE Trade mysteriously removed one of my recipient records without notifying me, and refused to tell me why when I phoned them. After I pushed for some explanation over the phone, they promised to follow up and never did. The recipient was eventually re-instated, although I was never notified about this. Of course, there is a chance that this could happen with CanadianForex, but I expect that they would be more communicative and cooperative with me in such a case. And to be fair, the situation with XE Trade might have been an edge case.

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