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!