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Wealthsimple launches Smart Savings Account
April 5, 2018
1:15 pm
Yatti420
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I think this is list worthy..

INTRODUCING
Smart Savings

We built a better way to save with higher rates than big banks. Start now and earn 1.7%. All the good stuff you expect from Wealthsimple, plus unlimited transactions, no account minimums, and no introductory rates.
Start saving better
Learn more about Wealthsimple Smart Savings.

Things to note. Invest over 100k and gain WealthSimple Black Status.

Save or invest $100,000 across accounts and get Wealthsimple Black

VIP airline lounge access: our free Priority Pass gets you and a guest into 1,000+ airline lounges worldwide.
Lower investing fees: if you also invest with us, Black gives you even lower fees on your investment accounts.
Dedicated Money Coach: one of our financial experts will design a plan to meet your financial goals.

https://www.wealthsimple.com/en-ca/smart-savings

At this time it isn't TFSA eligible. https://help.wealthsimple.com/hc/en-ca/articles/115015399587-Can-I-use-my-Smart-Savings-within-my-TFSA-or-RRSP-Or-can-I-set-up-my-other-Wealthsimple-investment-accounts-in-a-similar-way-

April 5, 2018
2:11 pm
Jon
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Another feature of this account is that it automatically split the money between different CDIC member to insure up to 900000 dollars.

April 5, 2018
2:41 pm
Yatti420
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Jon said
Another feature of this account is that it automatically split the money between different CDIC member to insure up to 900000 dollars.  

Whats great is the snippet underneath that describes how CDIC coverage applies to the first 100k in your name (whether in trust or otherwise).. I didn't know that..

CDIC coverage is capped at $100,000 per member institution and applies to all your deposits at the member institution proportionately. For example, if you already have $50,000 deposited at a CDIC member bank and have $65,000 deposited at the same bank through your Smart Saving account, CDIC will only insure the first $100,000, and will not insure $15,000 of your deposit.

If you let us know where you have other deposits we can invest anything over $100,000 in another CDIC member firm.

April 5, 2018
4:27 pm
Doug
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I wouldn't create a forum or add this to the "comparison chart," since it's just WealthSimple offering EQ Bank savings accounts to their clients for uninvested cash. It's definitely worthwhile and, hopefully, will spur the discount brokers to "up their game" in terms of HISA options.sf-cool

I'm glad that you mentioned it, though. It's definitely worthy of having this thread be the "go to place" for all discussions on it, including merging any future discussions on WealthSimple's partnered HISA offering into this thread.

Cheers,
Doug

April 5, 2018
4:32 pm
Doug
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Jon said
Another feature of this account is that it automatically split the money between different CDIC member to insure up to 900000 dollars.  

While that's a nice feature, it's important to point out that, even if this account is held beneficially in nominee form (like discount brokers) or WealthSimple custodies with EQ Bank separately (haven't looked into the logistics, that $900,000 figure you quote would only work if each joint member had separate WealthSimple RRSP/RRIFs, TFSAs, and non-registered investment accounts. Keep in mind, too, that this isn't for people looking to park money in cash long term. The portfolio management fee (~0.40%) would significantly erode returns. It's great for parking invested cash, though. 🙂

Cheers,
Doug

April 11, 2018
6:53 am
Leafs1967
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What rate do you get above the first $100,000. This weighted rate i can not find anywhere so i have to assume its based on which other member institutions they place these funds and the rates there. So it is possible you get on the first $100 K the 1.70% and then say you have another $500 K that rate on those funds may only be say 1.20%. Unlike other FI's its the same rate. The CDIC insurance is a great feature but the unknown of the rates above the first $100 K is not clear.

June 18, 2018
6:39 am
LazyWays
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From Wealthsimple:

To protect your money with us, we split your deposits with other CDIC member institutions every $100,000 increment, up to $800,000. After your first $100,000, you'll see a weighted average that makes your varied interest rate. You'll see the exact interest rate in your Wealthsimple account.

Below are the interest rates for our CDIC member institutions we deposit with. Interest rates are subject to change at any time.

Member institution Current rate
Equitable Bank 1.70%
B2B Bank 1.15%
TD Investment Savings 1.10%
RBC Investment Savings 1.10%
Bank of Nova Scotia Investment Savings 1.10%
ADS Canadian Bank Investment Savings 1.10%
Renaissance High Interest Savings 1.10%
Altamira Cash Performer 1.10%

Last updated April 22, 2018. For the most up to date rates, contact our support team.

For clarification, your interest rate isn't tiered. If you have an account with $100,005, your first $100,000 will have the highest rate from the above list and the $5 will be on the second highest rate. Your exact interest will be weighted against your total account value and shown in your Wealthsimple account.

June 18, 2018
10:14 am
Loonie
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Great deal if you're willing to settle for crappy rates. They are taking a hefty cut for their service.
How hard is it to move your own money around when the difference per 100K is $500p.a. (at 50 basis points)?

OK if you're their investment client and are parking very short term, I suppose. But why wouldn't you just be investing it? As I understand it, they deal only in ETFs.

June 19, 2018
6:39 am
LazyWays
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Right: Wealthsimple deals only in ETFs. Even the cash in Smart Savings account is held like an ETF – symbol EQB500 for deposits in Equitable Bank – price 1.00 CAD each, quantity 0.1 minimum. Any deposit [buy] or withdrawal [sell] activity initiated online takes 1-2 business days.

The web platform does not have the option of initiating an online transfer from Smart Savings to any other account [like Joint / RRSP / TFSA]. That can be done only by Wealthsimple Support. “Unfortunately internal transfer requests involving our Smart Savings accounts are not yet automated with our back office, and would require manual processing. While we can certainly still process internal transfers between accounts, it can take up to 10 business days to complete.“

Wealthsimple and its web platform is fantastic in all other respects.

June 19, 2018
8:01 am
Norman1
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LazyWays said
Right: Wealthsimple deals only in ETFs. Even the cash in Smart Savings account is held like an ETF – symbol EQB500 for deposits in Equitable Bank – price 1.00 CAD each, quantity 0.1 minimum. Any deposit [buy] or withdrawal [sell] activity initiated online takes 1-2 business days.
… 

That is a good deal if Wealthsimple is able to get a special series (EQB 500) of the Equitable Bank HISA that pays 1.7%. The regular series F (EQB 200) currently pays just 1.35%.

However, it is not such a great deal for those who can take the money out and park it themselves into Equitable Bank's direct-to-consumer EQ Bank savings account that pays 2.3%.

January 3, 2020
5:49 am
krwilson
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First off I do pay for "The Globe and Mail" digital edition so I hope this is not an issue if I post a few small cut&pastes.

Wealthsimple registers new business names in bid to launch services including online chequing accounts.

Wealthsimple chief executive Michael Katchen confirmed a chequing account is “definitely” on the company’s “road map," but could not provide details of the exact timing of a product launch or what an account would offer clients. "We have been open about wanting to be our client’s primary financial relationship, and a cash account is certainly an important part of that,” Mr. Katchen said in an e-mail.

Wealthsimple Save, a high-interest savings account provider, was launched in partnership with Equitable Bank. As a result, the deposits are directly held by Equitable Bank, so Wealthsimple is not required to have a banking licence. Mr. Katchen would not comment on whether he would have a partner, such as Equitable Bank, hold assets for the chequing accounts.

For the entire article you need go here and need to be a paid member to read it all: https://www.theglobeandmail.com/business/article-wealthsimple-registers-new-business-names-in-bid-to-launch-services/

January 21, 2020
4:34 am
krwilson
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First off I do pay for "The Globe and Mail" digital edition so I hope this is not an issue if I post a few small cut&pastes.

Wealthsimple unveils new chequing account partnership with two major Canadian banks

Online financial services provider Wealthsimple Inc. has partnered with two major Canadian banks as it prepares to launch the first of three new banking products under development – a chequing account service to be called Wealthsimple Cash.

The firm, which manages more than $6-billion in assets and is majority owned by Montreal-based Power Financial Corp., has partnered with two of Canada’s Big Six banks to launch a “hybrid” bank account that offers clients a chequing account with a “non-introductory” high interest savings rate of 2.4 per cent.

CEO Michael Katchen would not reveal which banks are partners in the program, but confirmed that Wealthsimple does not have a banking licence. Rather, the two unnamed banks will hold client assets and client money will be protected up to the $1-million limit guaranteed by the Canadian Investor Protection Fund (CIPF).

For the entire article you need go here and need to be a paid member to read it all:https://www.theglobeandmail.com/business/article-wealthsimple-unveils-new-chequing-account-partnership-with-two-major/

January 21, 2020
7:23 am
hwyc
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Are we talking about Wealthsimple Cash 2.4% ?

What's the difference between Wealthsimple Cash and Smart Savings?

[Addition] As per their FAQ(s), no CDIC coverage over the new product.

January 21, 2020
7:44 am
krwilson
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Yessf-smile

January 21, 2020
12:13 pm
Doug
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krwilson said
Yessf-smile  

Looks like it's the same thing with a different branding than Koho Save, with a prepaid credit card attached to it. It may even be partnering with Koho/Peoples Trust for the prepaid credit card.

As far as where the deposits are held, I suspect it varies, but is predominently held in Equitable Bank, possibly Equitable Trust, National Bank, and Scotiabank, which is consistent with Wealthsimple's Save program. If anyone has an account with them, they should be able to see who holds their deposits. By law, they have to tell us. sf-cool

Nevertheless, as broker-held, nominee form account, its inclusion is, thus, ineligible for inclusion in the HISA. I would be fine with creating a profile page and forum, but we'd also have to create a profile page and forum for Koho Save as well.

Cheers,
Doug

January 23, 2020
10:39 pm
Bud
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No suprise they're folding into another gimmick

"Subsidiary of Som Seif’s Purpose Financial buying Wealthsimple’s financial-adviser business"

January 25, 2020
6:39 pm
Doug
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Bud said
No suprise they're folding into another gimmick

"Subsidiary of Som Seif’s Purpose Financial buying Wealthsimple’s financial-adviser business"  

That is an interesting deal, but it's not related to Wealthsimple's other businesses. See Investment Executive story:

https://www.investmentexecutive.com/news/industry-news/purpose-advisor-solutions-acquires-wealthsimple-advisor-platform/

The short answer is: this is a complicated deal, especially to the layperson. At issue is Wealthsimple Invest, which is a robo-advisor service run through their portfolio management company Wealthsimple Inc. regulated directly by provincial securities regulators in each province. Wealthsimple Inc., in turn, uses the online platform of Wealthsimple Technologies, Inc. Wealthsimple for Advisors Inc. is the business being acquired; Wealthsimple for Advisors is an advice business that uses the Wealthsimple platform, also has licensed independent advisors to provide the advice (that is, independent financial advisors, not employees of Wealthsimple). Following close, Wealthsimple for Advisors will both, presumably, have a perpetual or long-term license to the Wealthsimple brand name, and license, separately, the technology platform of Wealthsimple Technologies, Inc.

Separately, Wealthsimple Technologies, Inc., which is the ultimate parent company, owns each of Canadian ShareOwner Investments, Inc., which custodies the Wealthsimple Invest accounts and those WfA independent financial advisor-managed accounts that choose to use them as the carrying broker. This may or may not continue for WfA post-close. It also custodies and acts as carrying broker for Wealthsimple Trade and Wealthsimple Save accounts. Again, this is unaffected by the sale.

Finally, Wealthsimple Technologies, Inc., separately owns SimpleTax Software, Inc., which it has said it plans to integrate into its online platform and continue as Wealthsimple Tax.

Cheers,
Doug

January 25, 2020
7:50 pm
Norman1
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Doug said

As far as where the deposits are held, I suspect it varies, but is predominently held in Equitable Bank, possibly Equitable Trust, National Bank, and Scotiabank, which is consistent with Wealthsimple's Save program. If anyone has an account with them, they should be able to see who holds their deposits. By law, they have to tell us. sf-cool

I don't think the broker needs to disclose that. As far as the Wealthsimple Cash account holders are concerned, they have a cash balance in an account with investment broker Canadian ShareOwner Investments Inc. and the balance is eligible for coverage by CIPF.

In many cases, the brokerage account agreements will say that such cash balances are properly recorded, but are not segregated and may be used by the broker in the conduct of its business.

WealthSimple says that, behind the scenes, the cash will be deposited, in trust, with one or more domestically significant banks (DSIBS), in accounts that have no CDIC coverage.

January 26, 2020
2:25 pm
Briguy
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Norman1 said

Doug said

As far as where the deposits are held, I suspect it varies, but is predominently held in Equitable Bank, possibly Equitable Trust, National Bank, and Scotiabank, which is consistent with Wealthsimple's Save program. If anyone has an account with them, they should be able to see who holds their deposits. By law, they have to tell us. sf-cool

I don't think the broker needs to disclose that. As far as the Wealthsimple Cash account holders are concerned, they have a cash balance in an account with investment broker Canadian ShareOwner Investments Inc. and the balance is eligible for coverage by CIPF.

In many cases, the brokerage account agreements will say that such cash balances are properly recorded, but are not segregated and may be used by the broker in the conduct of its business.

WealthSimple says that, behind the scenes, the cash will be deposited, in trust, with one or more domestically significant banks (DSIBS), in accounts that have no CDIC coverage.  

Do you feel confident, Norman, that if you had 1 million deposited in your SimpleWealth Cash account, and the Schedule 1 bank holding the money, eg. Bridgewater bank, went bankrupt, that you would be fully protected by CIPF?

January 26, 2020
3:37 pm
Norman1
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Briguy said

Do you feel confident, Norman, that if you had 1 million deposited in your SimpleWealth Cash account, and the Schedule 1 bank holding the money, eg. Bridgewater bank, went bankrupt, that you would be fully protected by CIPF?

If, as I suspect, the $1 million is recorded as $1 million of cash in a Canadian ShareOwner Investments Inc. client brokerage account, then yes. That's because the broker owes me $1 million of cash.

However, if the $1 million becomes a $1 million Bridgewater Bank deposit receipt held in a Canadian ShareOwner Investments Inc. client brokerage account, then no. That's because the broker owes me a $1 million deposit receipt and not $1 million in cash. At most, CIPF would cover getting a replacement $1 million Bridgewater Bank deposit receipt.

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