Savers Roundup February 2025: 4.00% savings account is gone unless you have direct deposit

Interest rate cuts appear to be slowing down. Near the end of January, the Bank of Canada had a key interest rate drop of 0.25%, marking the 6th decrease for a total of 2.00% since the recent peak in July 2023. For those financial institutions (on our chart) who decreased their savings account interest rates since the January 29 Bank of Canada drop, the decreases averaged 0.18%.

EQ Bank decreased its regular savings account interest rate from 1.75% to 1.50%, but upped the rate if you set up direct deposit to the account from 3.50% to 4.00%. The next highest non-promo rate is with the PC Money account, which offers 3.50%.

For a TFSA, Saven Financial actually increased its interest rate to 3.40% (from 3.15%, although it originally went up to 3.50%), putting it into a tie with Oaken Financial for the top TFSA rate.

Currently, all of the GIC rates we track are under 4.00%, although you can still get 4.00% or slightly more through a GIC broker.

Promo rates are drying up, in relative terms

Only a few months ago, you could get up to 6.00% in a new savings account, and 5.00% or more in some “new deposits for existing clients” promos. Nowadays, the new client offers at promo mainstays Tangerine Bank and Simplii Financial are for 4.50% and 3.90% respectively. The highest reported new “Tangerine lottery” promo for existing clients is 3.85%.

However, as listed on our promos page, you can still get:

• 5.00% at CIBC for the first 4 months
• 5.00% at Coast Capital until April 30
• 4.75% at Motive Financial for the first 120 days (if you open an account before February 14)
• 4.70% at Manulife Bank until April 30

Poll result: how much is in your TFSA?

Last month, we asked our newsletter readers how much is in their TFSA. We got almost 500 responses, resulting in the following:

• Less than $20K: 6%
• $20K to less than $50K: 4%
• $50K to less than $100K: 15%
• $100K to less than $200K: 63%
• More than $200K: 11%

(Total is 99% due to rounding.)

Kudos to anybody who has contributed to their TFSA in any way so far!