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EQ rate change
April 14, 2016
2:54 am
monju00
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On April 18th 2016, the EQ Bank Savings Plus Account annual interest rate will change to 2.25%*.

At EQ Bank, we value your business and want to help you achieve your financial goals. Not only are we committed to offering a competitive everyday annual interest rate compared to other banks, the Savings Plus Account will continue to offer 5 free Interac e-Transfers per month, unlimited day-to-day transactions, and no monthly fees. You will continue to earn interest on every dollar, without the hassle of transferring money between a chequing and savings account. On top of that, we are focused on investing in new features and more innovative ways to put money in your pocket - stay tuned.

Thank you for being a part of EQ Bank.

*Interest is calculated daily and paid monthly. Rates are per annum and subject to change.
Interac e-Transfer is a registered trade-mark of Interac Inc. Used under licence.

April 14, 2016
4:48 am
Barb.
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Well, the 3% didn't last long, did it. Still higher than what the others are offering, tho.

April 14, 2016
5:23 am
MarkFog
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Wow, they didn't even consider dropping to 2.5% nor even waiting until the end of the April. Exactly 3 months since Eq Bank inception.

If another promotion comes along I will be moving.

I don't think they have to worry about having to "Reserve a Spot" after the rate change. If you check the Alterna Bank site the poke fun at that without mentioning names.

April 14, 2016
5:51 am
iangrey
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Very poor timing with both Zag and Tangerine offering promotional rates until June.

April 14, 2016
6:05 am
Bill
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They probably got in more dough than they wanted, too many accounts too, so it's time for them to divest a bit.

April 14, 2016
6:29 am
MarkFog
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Bill said

They probably got in more dough than they wanted, too many accounts too, so it's time for them to divest a bit.

That could be true. They didn't want to expand as much as they did. Having to bring in more staff added more expenditures. This rate change will help other banks pick up clients looking for better deals. Hopefully, they brought in temporary help if clients start leaving.

Edit, I had to point out to them that their website still advertises the 3.00% with the "Reserve a Spot" button. This could have been removed before sending out the notice. Anyone on the reserve list will not get that rate with 4 days to go.

April 14, 2016
10:12 am
dougjp
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I sort of look at this as a positive. The 3% was ludicrous for the market they entered, and my first thought was where will they "settle" at. Because they would know they can't change this new lower rate without overall market conditions changing or most will consider them too flaky to keep dealing with, regardless of CDIC backing. And competitors are going to read this the same way that I do, I expect some modest rate increases especially if EQ ever gets around to giving us the choice to change our accounts to joint accounts (notice the 'dig' about that on Alterna's web site).

Generally I see minor upward pressure on rates (especially long term) due to competition and Mr. sunny ways altering supply demand by borrowing billions to cover his giveaways and unchecked spending (sorry, I can't help myself) sf-frown If so, I see most of the online savings banks being forced to have their rate start with a "2." minimum, or lose a majority of their deposits. GIC rates have to follow suit.

April 14, 2016
5:45 pm
MarkFog
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I can certainly see your point and it would make sense. I can understand that switching on-line banks for a small increment may not make sense for small deposits, but for $100K it does.

April 14, 2016
9:35 pm
Rick
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Wow...that didn't take long. I guess I'm transferring to Tangerine with the 2.76 until Jun 30. Doubt if I'll be keeping more than a couple bux in EQ just to keep it open.

April 14, 2016
10:44 pm
Loonie
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Those in the queue may find it moves along faster now that early adopters are leaving.

It proves my point re: site recommendations, namely that nobody looking to open an account would ever get the then-advertised rate.

Seems like they decided to make us all bite the bullet by reducing the rate substantially all at once. Bad idea in my opinion. We already knew they'd do it, but people are more likely to hang in if it's gradual, I think. I guess they don't need us any more.

In retrospect, it amounted to a sign-on bonus of .75% for 3 months max, comparable to credit cards that give you the first year fee-free or "open-a-new-account" bonuses. However, inasmuch as it SEEMED like more than that, I have to congratulate their marketing department on its cleverness if not its transparency.

April 16, 2016
7:10 pm
MarkFog
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I think it was obvious that EQ Bank did some internal number crunching and expecting an exodus of clients; making some preliminary projections. They are banking on a notion that once people have signed on, a certain percentage won't bother with moving their funds. Only they will know how many clients actually leave. On their FB page a rep was trying to justify the new rate by being still above the others' base rates. Not considering other promos out there.

I don't want to go over the CIDC limit at Tangerine, but if another institution comes along with something similar I will move it. It's not that I really want to be a rate chaser for 0.5%. It's based on the principal that I don't like the deep drop that EQ Bank implemented knowing that people stayed on a waiting list for weeks and never managed to get a day of that interest rate. They knew that 3% was out of line with the market, but instead of marketing something like "3% promo rate until April 18, 2016, after promo rate ....%" new clients (like me) would be more understanding. I signed up with Zag Bank knowing what their base rate is. EQ Bank didn't flat out lie about the rate since they cover themselves with "*- rate change without notice". But, they knew that this high rate would bring people in droves. I feel it was like a bate-and-switch.

For some reason EQ Bank thinks that "5 free eTransfers" sets them apart from the rest. If you are not in business, eTransfers has little significants to people like me.

April 16, 2016
7:23 pm
Loonie
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For the record, there is a link somewhere on the Eq board to an interview with the Eq CEO who made it pretty clear many weeks ago that they intended to reduce the rate as soon as they had enough business. So, it's a matter of interpretation, at best, as to whether they lied in saying it was not a promo rate.

Nothing wrong with being a rate chaser! It's about the only way you can be sure of "winning", especially if you have 100K on deposit, where .5% gives you $500 over a year.

April 16, 2016
7:42 pm
Bill
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Peter, I thought I saw EQ on the comparison chart a few days ago, no?

April 16, 2016
8:11 pm
Peter
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Bill said

Peter, I thought I saw EQ on the comparison chart a few days ago, no?

Yes, I only just took it off today with a note at the bottom of the chart: "EQ Bank is not on the chart because you cannot currently open a new account."

April 17, 2016
6:14 am
JW
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I have been on the Reserve Now list for weeks, maybe a month or more. Was going to deposit about $300K (3 accounts). Have not heard from them, I guess they are still hiring and training people. My incentive to open an account is waning with this drop in rate. I'm just not going to bother to open. They have just bought themselves a whole lot of expense (salaries) and shrinking deposits.

April 17, 2016
6:46 am
Bill
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JW, I agree, many of EQ's actions, such as seemingly picking a 3% rate our of the air instead of calculating a rate based on their operations and also continuing to run that ad when they were already overloaded, suggests their management just isn't that bright. But humans are funny in general, I guess: if EQ had opened with a 2% rate and then put it to 2.25% everybody would be singing their praises!

April 17, 2016
11:45 am
Loonie
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Bill said

JW, I agree, many of EQ's actions, such as seemingly picking a 3% rate our of the air instead of calculating a rate based on their operations and also continuing to run that ad when they were already overloaded, suggests their management just isn't that bright. But humans are funny in general, I guess: if EQ had opened with a 2% rate and then put it to 2.25% everybody would be singing their praises!

The thing is, we don't know if they really have hired more staff etc. We really know very little about their strategy. Maybe they really don't want any more customers now, and are only taking on more customers as deposits leave and/or as they have new uses for new deposits. Existing staff could handle that easily, as I'm sure the flow has decreased, and they have complete control over how many new customers they want to allow.

April 22, 2016
12:42 pm
Dave
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I'm not to happy about them reducing the rate, especially after all their "this is not a promotional rate" advertising but I'll probably stick with them for now since I would have to lock up my money for 3 years to get the same rate at my other bank.

I do really like the ability to link my EQ account to my other bank accounts.

April 28, 2016
8:44 am
SlowPoke
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What the Heck!

No Email from them to indicate the rate change.

Then from this forum I find out today of the rate change

Log in to EQ and find a secure email waiting. Yet received no email notification that a secure message was waiting

Not impressed with the customer experience

And the game continues off to Tangerine we gosf-yell

April 28, 2016
2:42 pm
SavingIsGood
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What did you expect. I mentioned once that this is carrot and stick scheme. Or call it pyramid scheme. Or any other name. NO BANK can survive giving money away. They are here to 'protect' your money and MAKE money.
But, people will open accounts, deposit large sums, then life will distract them, they might forget and rate will go from 3% to 0.5% soon. Just wait and see.

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