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The Bank of Canada made its final key interest rate decision of 2022, which was a 50 basis points increase. 2022 has been the year of inflation and rising interest rates. Rewind back to the beginning of 2022:

• The Bank of Canada hadn’t started raising rates yet
• Wyth Financial had the highest savings account interest rate on our comparison chart at 1.55%
• Hubert Financial had the top 1-year GIC on our GIC comparison chart at 2.00%, and the top 5-year GIC at 3.00%
• The topic of brokerage investment savings accounts was barely discussed
• We were discussing short-term promos hovering around 2.00%

In the present day:

• The Bank of Canada has raised interest rates by a total of 4.00% (or 400 basis points) this year
• Wyth Financial is closing
• Oaken Financial has the top nationally-available savings account interest rate at 3.40%
• Oaken Financial has the top nationally-available 1-year GIC on our GIC comparison chart at 5.25%, and motusbank has the top 5-year GIC at 5.20%
• Brokerage investment savings accounts are a hot topic of discussion with one offering a rate above 4.00%
• Some savings account promos offer 5.00%

The year is not quite done, and we’re likely to see more savings account increases (with the most recent changes at Canadian Tire Bank from 2.40% to 3.00%, Achieva Financial from 2.95% to 3.25%, and EQ Bank’s TFSA from 2.50% to 3.00%). GIC rates will also fluctuate, although potentially in the other direction, as EQ Bank and Motive Financial have recently decreased some of their GIC rates.

Acquisition news

Non-inflation / non-rate news has been trying to grab headlines recently:

• Smith Financial to acquire Home Capital Group, owners of Oaken Financial
• RBC is buying HSBC Canada

TFSA reminders

Lastly, the additional TFSA contribution room coming in 2023 is $6,500. If you have existing TFSA funds that you would like to transfer to another financial institution, consider withdrawing it before the end of December and then re-contributing it in January in order to avoid direct TFSA-to-TFSA transfer fees and administration work.

All rates trending to 5.00%

After what seemed like a brief slowdown or pause, GIC rates have been increasing again, especially for shorter terms. One month ago, Resurrection Credit Union’s (Ontario only) 5.00% 1-year GIC rate stood out. Now, the 1-year GIC rate leader on our GIC comparison chart is Peoples Trust at 5.20%, and it’s one of a few financial institutions with 1-year rates higher than their 5-year rates. EQ Bank, Oaken Financial, and Wealth One Bank of Canada all have 1- through 5-year GIC rates of at least 5.00%.

Half of the savings accounts on our comparison chart sport a 3.00% interest rate or higher, with Ontario-only Saven Financial leading at 3.75%, followed by nationally-available Oaken Financial at 3.40%. The next key interest rate decision from the Bank of Canada is scheduled for December 7.

You can get up to 3.80% in an Investment Savings Account through your brokerage. Interest rates in such accounts usually lag traditional savings account quite significantly, but have been trending upward.

What’s more, you can get interest rates that almost rival GIC rates via at least a few savings account promotions, including:

• HSBC 4.40% (on less than $25,000) or 4.90% (on $25,000 or more) new deposit promo for new and existing customers in a High Rate Savings Account between October 17, 2022 and January 27, 2023
• Tangerine targeted 5-month new deposit promo for existing customers: 4.75% between November 1, 2022 and March 31, 2023
• Tangerine new customer promo: 4.50% for the first 5 months in a savings account if you also open a chequing account
• Simplii Financial new customer promo: 5.00% in a savings account until January 31, 2023
• Vancity (BC only) 4.50% new deposit promo for new and existing customers in a Jumpstart High Interest Savings account until February 28, 2023

TFSA contribution limit increasing to $6,500?

The TFSA contribution limit for 2023 is all but guaranteed to be $6,500, which would be up from $6,000 in 2022. This increase is thanks to inflation, as the TFSA contribution limit is indexed to inflation and rounded to the nearest $500 increment.

Bye bye Wyth Financial

Just over a year ago, Concentra Bank renamed itself to Wyth Financial and made its savings account generally available. Now that Equitable Bank has completed its acquisition of Concentra Bank, Wyth Financial is being retired. No new Wyth Financial accounts can be opened, existing savings accounts will be closed, and GIC accounts will be serviced until they mature. On the Wyth Financial website, new customers are being directed to explore EQ Bank.

Credit card news

The STACK Prepaid Mastercard’s recent changes are not good: first, it reinstated its previously waived foreign currency exchange fee, and now it will start charging a monthly fee if you don’t spend at least $350 per month.

We’ve published a new comparison of some promising small business card solutions: Float and Caary. They both allow you to create employee cards with no annual fee, but there are quite a few meaningful differences between them.

Continuing a recent trend, there has been very little action in GIC rates. One of the exceptions is Wealth One Bank of Canada, with some standout rates until October 30: 1-year at 4.68%, 2-year at 4.88%, 3-year at 5.08%, 4-year at 5.08%, and 5-year at 5.18%. Its 1-year GIC rate of 4.68% trails Peoples Trust (at 4.80%) as well as Oaken Financial and Tangerine Bank (both at 4.70%), but the rest of its rates top our GIC comparison chart.

Savings account interest rates have still been increasing, but slower than previously. Since the Bank of Canada’s September 7th key interest rate hike of 75 basis points, only about half of the financial institutions on our savings account comparison chart have increased their savings account interest rates. The average increase is 33 basis points, or 44% of Bank of Canada’s increase. This is a far cry from what happened in the month following the Bank of Canada’s 100 basis points rate hike on July 13th, where the vast majority of savings accounts that we track went up, and by an average 61 basis points increase, or 61% of the Bank of Canada’s increase.

There are now 4 savings accounts offering at least 3.00%, and 3 of them are nationally available at Motive Financial, Oaken Financial, and Wealth One Bank of Canada.

Here is a list of new deposit promos to consider this fall:

• RBC new customers: 4.00% for 3 months in your first RBC High Interest eSavings account if opened before December 15, 2022
• National Bank: 4.25% on new deposits to a High Interest Savings Account for new and existing customers between September 15 and December 13, 2022
• Tangerine Bank’s latest targeted new deposit promo for existing customers is 4.30%, although for 3 months (previous such promos were for 5 months)

Mergers, credit card surcharges, and more deals

• Carpathia Credit Union (parent of Ideal Savings) is in talks to merge with Access Credit Union? Access Credit Union (the parent of AcceleRate Financial) recently merged with Noventis Credit Union and Sunova Credit Union (the parent of Hubert Financial).
• Canadian businesses can now add a surcharge if you use your credit card. But will they?
• Visit our cash back site and get $225 back for successfully signing up for the Scotiabank Momentum Visa Infinite Card, Scotiabank Gold American Express Card, or Scotiabank Passport Visa Infinite Card

With last week’s key interest rate increase from the Bank of Canada, the five increases this year have been as follows:

• September 7: 0.75%
• July 13: 1.00%
• June 1: 0.50%
• April 13: 0.50%
• March 2: 0.25%

Every increase has been met by an equivalent increase in banks’ prime lending rates. By and large, financial institutions have increased their savings account interest rates accordingly as well, albeit not by as much as savers would like.

GIC rates have not been as well-correlated. Between January 1 and July 1, 2022, the top 1-year GIC interest rate on our comparison chart went up from 2.00% to 4.15%, but since then it’s only gone up to 4.60%. During that same period, the top 5-year GIC interest rate went up from 3.00% to 5.00%, but since then it’s only gone up to 5.10%. At a few financial institutions, GIC rates have actually gone down recently.

We spoke to a few financial institution representatives, and got a roughly consistent answer: there are many factors affecting GIC interest rates, such as a financial institution’s various alternative funding sources (including the Canadian Dollar Offered Rate) and good ol’ competition. But the main reason why there isn’t as much correlation between GIC rates and the Bank of Canada’s key interest rate is that GIC rates are more forward-looking. Earlier in the year, there was a greater expectation of interest rates increasing, thus we saw bigger increases in GIC interest rates. Looking ahead to 2023, the Bank of Canada isn’t currently expected to increase its key interest rate as much as it did in 2022, thus GIC rates have plateaued, at least for now.

Savings account interest rates have kept climbing. Ontario-only Saven Financial tops our savings account comparison chart at 3.30%, followed by Motive Financial and Oaken Financial at 3.00%. One final note: if you have an investment brokerage account, you might be surprised at some of the CDIC-insured Investment Savings Accounts, which are earning up to 2.85%. Many of these Investment Savings Accounts are offered by the big banks, whose paltry regular savings accounts interest rates continue to languish.

1.00% Bank of Canada increase leads to average 0.61% increase in savings accounts

It’s now been 1 month since the Bank of Canada raised its key interest rate by a whopping (by recent standards) 100 basis points to 2.50%. What has happened to savings account interest rates since then?

The largest absolute increase was at Canadian Tire Bank from 1.45% to 2.40%, but 1.45% had drifted to almost the bottom of our savings account comparison chart. Motive Financial increased its savings account and TFSA interest rate from 2.20% to 3.00%, which makes it the clear leader at the moment.

14 of 19 savings accounts on our chart have seen their interest rates increase since July 13, and by an average of 0.61% or 61 basis points. That’s a large average increase, although far from the full 1.00% increase by the Bank of Canada.

Some promo rates are going up too

With savings account interest rates continuing to increase, what happens if you were locked into a promo rate? In at least a few cases, those rates have continued to increase:

• Simplii Financial’s targeted new deposit promo from July started out as 3.00%, and has since increased to 3.85%, with the same end date of October 31, 2022
• Meridian Credit Union’s new account promo started out at 2.75% (for the first 8 months) in May, but has since gone up to 3.50% or 3.65%, depending on when you created the account
• DUCA Credit Union’s (Ontario-only) Earn More Park Account promo, which started out 1 year ago at 1.50%, has increased and been extended multiple times all the way to 3.25%. Given that its end date has been completely removed, it’s more of a regular rate than a promo at this point!

By contrast, Tangerine Bank’s recent promos for both new and existing customers have fixed promo rates that don’t change if the base interest rate changes (at least so far).

There is a 4.70% savings account promo

Is a 4.70% savings account for real? Mostly. It is linked to the prime rate, but only in Alberta and only until October 10.

So many choices, too little time

As “high interest savings accounts” start to live up to their name again, how do you choose from amongst all the options? Chime in on a recent forum thread that asked which 3 or 4 online banks you would get.

Are GIC rates peaking?

GIC rates were the star in the first half of 2022, increasing by up to 3.00% for 1-year through 5-year rates for the leaders on our GIC comparison chart. While on average we have seen some modest increases (0.05% to 0.30%) over the past month, the pace of increases has definitely slowed down. EQ Bank’s GIC rates have actually started to decrease. For now, EQ Bank appears to be an outlier in that respect, which may be related to a decreased need for funds (and/or a reduced dependency on deposits) on its mortgage side.

Speaking of outliers, Tangerine Bank is currently tied (with Peoples Trust) for the top 1-year GIC rate on our chart at 4.50%. Tangerine’s 1-year rate is weirdly above its 5-year rate of 4.45%. So shop around depending on the term you’re looking for; as an example, MAXA Financial is currently offering the highest 5-year GIC rate on our GIC chart at 5.10%.

Cash back credit card sign-up offers

Looking for a new credit card? Check out our cash back website where you can currently get up to an additional $200 Interac e-Transfer or a $275 Amazon.ca gift card for successfully signing up for a credit card through our site.