We can be pretty certain (barring a catastrophe) that the Bank of Canada has made its final rate cut of 2024. With the 50 basis points decrease on December 11, that makes a total 1.75% of cuts this year. Although the effect of the most recent decrease has not made it to all savings accounts yet, savings accounts on average haven’t fared too poorly, all things considered. At the beginning of 2024, the average interest rate from the top 5 financial institutions on our comparison chart was 3.98%; now it’s 3.37%, for an average decrease of 0.61%.
If we do the same comparison for GIC rates, the average interest rate for the highest five 1-year GICs was 5.72% on January 1, 2024; now it’s 4.12%. For the highest five 5-year GICs, the average was 5.04% on January 1, 2024; now it’s 3.94%. A few GIC rates have actually increased modestly in the past few weeks, although the general trend is still down.
On a related note, the absolute top rates on our chart recently were the answer to “who hasn’t yet – but will – join the latest round of decreases”. So you might want to double check the rate histories just before deciding to chase the highest rate.
Some final bullets to ponder, as we get ready for holiday / TFSA season:
- EQ Bank is offering a 2% match on new deposits made to TFSA, FHSA, or RSP accounts by February 28, 2025. We’re tracking plenty of other promos too.
- Wealthsimple now has registered (TFSA, RRSP, FHSA) savings accounts
- The TFSA contribution limit for 2025 will once again be $7,000
- December is the best month to remind everybody about the TFSA December manoeuvre to move TFSA money between banks
- We drew 5 x $25 Interac e-Transfer prizes last week just for having followed our Instagram account
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