Savers Roundup August 2024: Free chequing gets better; rate cut spurs… rate increase?

Healthy competition is making hybrid bank accounts better

Motive Financial, with its chart-topping 4.10% Savvy Savings Account and pending takeover by National Bank, has announced some chequing-like changes to its savings account:

• Unlimited transactions
• Free Interac e-Transfers
• No ATM fees from Motive Financial (although you might still get charged a fee by the ATM provider)

Motive Financial’s website no longer mentions its separate chequing account. This means it now offers a single, hybrid bank account that combines the convenience of a chequing account with the higher interest rate of a savings account.

If this sounds familiar, it might be because of the likes of EQ Bank and Wealthsimple, who recently improved their hybrid accounts as well.

EQ Bank’s interest rate of 4.00% if you configure direct deposit now matches Wealthsimple and no longer expires after 12 months. And Wealthsimple now reimburses fees by the ATM provider, matching a feature that EQ Bank pioneered.

Is a student account relevant for a university student?

Second-year university student Lena M has written an article reviewing her banking needs, and determined that none of her best options are labelled as student accounts. With the number of decent “standard” accounts out there, why bother with a student account that you’ll have to change after a few years? Her requirements include unlimited free transactions, a debit card, the ability to open multiple accounts, free ATM access, a good savings account interest rate, and more. That’s similar to the needs of many adults, student or not!

Lena then followed up with a comparison of bank account features which includes EQ Bank, Neo Financial, Simplii Financial, Tangerine Bank, and Wealthsimple.

Another rate cut but a surprising rate increase

The Bank of Canada made a second key interest rate drop in 2.5 months on July 24, spurring another round of corresponding decreases in savings account and GIC interest rates. Zoom out and we’re only back to where interest rates were at in May 2023, which was a high last seen 17 years ago.

We did a double take, though, when we saw Simplii Financial’s latest new customer promo, which actually got better. It now sits at 6.25% in a savings account for the first 5 months (above 5.90% from its previous iteration), which currently stands out among other promotions.