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It seems like every few days, we’re tracking yet another savings account interest rate drop. Since the beginning of December, 15 out of 19 bank accounts we track have experienced a rate decrease. One of the exceptions is the PC Money account, which we only recently added to our comparison chart. It’s by far the current rate leader at 4.00%, with the next highest rate being Wealth One Bank of Canada at 3.20% (which is also the highest non-promo TFSA rate).

The top GIC rates on our GIC comparison chart are as follows, compared to what the highest rate was 1 year ago:

• 1-year: 4.00% (5.70% a year ago)
• 2-year: 3.95% (5.60% a year ago)
• 3-year: 3.75% (5.30% a year ago)
• 4-year: 3.65% (5.00% a year ago)
• 5-year: 3.70% (5.00% a year ago)

Graphing savings account rates against Bank of Canada rates

One of the features on our website is the ability to compare savings account interest rate histories between financial institutions. Now we’ve added the Bank of Canada policy interest rates going back to 2010 to our database, so you can graph it against savings accounts.

For example, here’s Motive Financial vs the Bank of Canada’s key interest rate:

TFSA promos

We’re tracking TFSA (and non-TFSA) promos on our promotions page, where one of the headline promotions is a 2% match on new deposits at EQ Bank until the end of February. Remember to consider what the rate will be when a promo ends, since your funds will have to stay at that financial institution for the rest of the calendar year unless you withdraw it or transfer it to another TFSA.

How much do you have in your TFSA?

If you turned at least 18 in 2009, your cumulative TFSA contribution room, including this year’s $7,000 limit, is $102,000.

CRA stats indicate that for the 2022 tax year, the average value of a TFSA by age group was:

• 24 or younger: $6,168
• 25 to 34: $12,480
• 35 to 44: $16,552
• 45 to 54: $23,847
• 55 to 64: $36,625
• 65+: $50,918

Quick notes

• CDIC protection for Wealthsimple Cash accounts has increased to $1 million
• $0 and $4 bank accounts are coming to Canada’s big banks by December 1, 2025. Will these accounts be worth considering?
• Discussion: how to invest money for your 13 year old?

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

Down they go! Savings account interest rates keep dropping. Previous leader Neo Financial is now offering 3.00%, which is down from 4.00%. Notably, in their rate cut announcement, Neo Financial said the following:

“We are anticipating the Bank of Canada to issue another drop in December, so we have made the drop to 3% now, so we do not need to lower it now and lower it again then.”

Other recent drops include Motive Financial from 3.60% to 3.20% and Saven Financial from 3.70% to 3.40%. That leaves Wealth One Bank of Canada with the highest rate on our comparison chart at 3.75%, followed by Canadian Tire Bank at 3.70% and Bridgewater Bank at 3.60%… for now. There is also the PC Money account (which is not yet on our chart) at 4.25%.

The best rate on our promotions page is with Simplii Financial, where new customers can get 6.00% in a savings account for the first 5 months.

Over in GIC land, you’re now doing well if you can get at least 4.00% on any GIC term; the highest 4-year GIC rate currently tops out at 3.95%.

Investment platform transfer bonuses

Seems like the competition for online investment brokerages is heating up, as there have been quite a few transfer or sign-up bonuses lately:

• BMO: 0.25% for existing clients who transfer at least $10,000 in new funds
• Qtrade: Get up to 5% cash back + $150 sign-up bonus + free trades
• TD Direct Investing: 1.00% if you transfer at least $10,000 in assets
• Wealthsimple: free iPhone 16 or MacBook Air if you transfer at least $100,000 in assets

Credit cards with no foreign currency exchange transaction fees

One of our readers asked us last month for a breakdown of credit cards with no foreign exchange transaction fees. Luckily, we have been maintaining such a list for years, and it now includes some prepaid cards.

Up to 7% cash back on groceries?

Neo Financial is turning some heads with their new World Elite Mastercard. It has a $125 annual fee but offers up to 7% on grocery purchases, 5% on recurring payments, and 4% at gas stations. To get those cash back rates, you must keep at least $10,000 in the Neo Everyday account, which earns 0.10%. Otherwise the card earns 5% on grocery purchases, 4% on recurring payments, and 3% at gas stations.

Follow us on Instagram

Next month, we’ll give out $25 Interac e-Transfers to 5 random followers on our Instagram account!

After holding steady at or near the top of our charts for more than a year, Motive Financial finally blinked on Round 3 of the Bank of Canada interest rate cuts. Motive Financial’s regular savings account and TFSA interest are now at 3.60%, down from 4.10%. This now makes them tied for 4th on savings account comparison chart, behind Neo Financial (at 4.00%), Wealth One Bank of Canada (at 3.75%), Canadian Tire Bank (at 3.70%), and Saven Financial (at 3.70%). If you count rates when you have a direct deposit sent to your account, you also have EQ Bank at 4.00% and Wealthsimple at 3.75%.

Motive Financial did release an offer for new clients, though: 5.75% for the first 120 days in a new savings account. And it even has a refer-a-friend program to sweeten the pot in the short-term. We’ve listed this on our promotions page, along with many other promos offering up to 6.25%.

Rates down but competition up

Saven Financial, seemingly tired of the Ontario-only label, is finally available outside of Ontario, with the exception of Quebec.

The PC Money account (which was created by PC Financial after its original banking division moved under CIBC and rebranded as Simplii Financial) now has a “savings feature” offering 4.25%! We haven’t added it to our comparison chart yet, but if we did, it would be the new leader.

New GIC leaders after MCAN Financial decreases

MCAN Financial is the newest addition to our GIC comparison chart, with, until last week, chart-topping rates. This leaves MAXA Financial and Wealth One Bank of Canada tied for the lead for all terms (from 4.60% for a 1-year GIC to 4.10% for a 5-year GIC).

Just a couple of months ago, we were impressed with Hubert Financial’s 1-year quarterly GIC rate, which had increased to 5.35% (when compounding on the quarterly terms were taken into account). Although its quarterly cashability is still unique, its rate has fallen quickly from the competition. GIC rates available through brokers have also fallen, and are currently not competitive against rates directly available from financial institutions.

Competition for small business accounts too

EQ Bank’s small business account is finally widely available, at least to those who already have a personal account with them. Its basic premise is a no-fee account to cover a business’s day-to-day needs, with a 3.00% interest rate on your balance.

It has some key feature omissions, such as mobile cheque deposits. But we’ll be following along as its feature set develops.

Poll results: Tangerine Bank and Simplii Financial are popular

Last month, we polled readers on whether they have a Tangerine Bank or Simplii Financial account. Out of 634 respondents, over 40% have accounts with both financial institutions! 73% have a Tangerine Bank account (compared to 71% in our previous poll who have an EQ Bank account), and 50% have a Simplii Financial account. Seems like our readers are well banked!

Current cash back offers

• Wealthsimple: $50 for opening a Cash account with a minimum $500 deposit
• Scotiabank Gold American Express Card: $205 via Interac e-Transfer or $210 Amazon.ca gift card
• Scotiabank Momentum Visa Infinite Card: $140 via Interac e-Transfer or $150 Amazon.ca gift card
• Simplii Financial No Fee Chequing Account: $65 via Interac e-Transfer or $70 Amazon.ca gift card

If you weren’t paying attention this summer, you might have missed 3 key interest rate cuts – for 25 basis points each – from the Bank of Canada already, with the latest decrease coming on September 4. This is before the US has made any cuts, although our southern neighbours are widely expected to make a cut on September 18. The Governor of the Bank of Canada stated “If inflation continues to ease broadly in line with our July forecast, it is reasonable to expect further rate cuts”.

Each round of cuts have triggered predictable decreases in savings account interest rates. The top two rates — at Motive Financial and Neo Financial — have yet to budge at 4.10% and 4.00% respectively, but we’ll see how long they can hold out.

If you factor in the rate you get if you have regular direct deposits, EQ Bank’s 4.00% rate would be near the top of the leaderboard. EQ has kept that rate even after decreasing its base savings account and TFSA rates to 2.25% and 2.75%. There has been a good amount of discussion on our forums about its 30 Day Notice Savings Account, but that rate has now dropped from 5.00% to 4.25%.

GIC interest rates continue to fall, with the top non-broker rates we track as follows:

• 1 year: 4.75%
• 2 year: 4.60%
• 3 year: 4.30%
• 4 year: 4.25%
• 5 year: 4.25%

Shorter GIC terms first started to offer higher rates (than longer terms) at the beginning of 2023, and that trend continues today.

The upstarts are popular

A whopping 71% of poll respondents last month said they have an EQ Bank account, and 29% have a Wealthsimple account. 78% of respondents have an account with at least one of the two.

Peak promos for savings accounts?

You can get at least 5.00% in a savings account via short-term promotional rates from the likes of DUCA Credit Union, Manulife Bank, Tangerine Bank, and Vancity as listed on our promos page. Simplii Financial remains the headliner with 6.25% for the first 5 months for new customers. In an environment where rates are dropping, will this be the best we get for the foreseeable future?

Student credit cards

Lena M, who shared her journey on choosing a student bank account a couple of months ago, is back with her review on choosing a student credit card. She has broken down her considerations for a first credit card, and narrowed down her options!