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2.00% is a hot deal

You’re more likely to be earning closer to 1.00% than 2.00% on your savings right now. Such is the reality for Canadian savers, where 2% is a hot deal; here are a few examples:

• A new, non-registered Manulife Bank Advantage Account will get you 2.00% for 4 months
• motusbank is offering 2.40% in a new TFSA or RRSP savings account for 4 months if opened before June 30, 2021. Keep in mind that they have a $50 transfer-out fee for registered accounts.
• EQ Bank’s 2.30% TFSA and RRSP interest rate ends on May 26, but you can lock in a 2.30% 3-month TFSA or RRSP GIC before then
• Tangerine Bank has a promotional 2.10% savings account interest rate for the first 5 months if you also open a chequing account, plus a $150 bonus for setting up payroll direct deposit with the promo code “EARNMORE”
• Our GIC comparison chart features Oaken Financial and EQ Bank with 2.10% 5-year GICs, and LBC Digital with a 2.00% 5-year GIC
• Steinbach Credit Union has a special 2.00% 5-year GIC as well, as listed on our promotions page
• Toronto-based GIC broker GICWealth has a 2.15% 5-year GIC

It’s been another month full of interest rate drops on our savings account comparison chart at Oaken Financial (from 1.25% to 1.15%), Peoples Trust (from 1.20% to 1.15%), Wealth One Bank of Canada (from 1.50% to 1.25% on its regular savings account only), and Alterna Bank (from 1.10% to 1.00%). Neo Financial is about to decrease its regular savings account interest rate from 1.55% to 1.30% on Monday, May 17, leaving Canadian Tire Bank as the unmatched leader for both regular savings and TFSA accounts at 1.55%. Bridgewater Bank currently holds the second spot for a regular savings account at 1.45%, while Wealth One Bank of Canada holds the second spot for a TFSA at 1.50%.

Every account has its quirks: firsthand account reviews

Are you doing some spring cleaning on your bank accounts or potentially opening new ones? Our website community has been busy trying out new accounts and sharing experiences.

Top rate leader Wealth One Bank of Canada has a comprehensive set of account features on its chequing account, although its bill payments database could apparently use some work.

Neo Financial’s savings account interest rate is enticing (although less so with its impending decrease), but if you’re not quite sure about the new kid on the block, we’ve got the entire account opening process documented with screenshots, including how to link external accounts.

Several of the big banks have sign-up bonuses on their chequing accounts right now, but none of them support linking external accounts for “me to me” electronic funds transfers. Free Interac e-Transfers and cheques might still be good enough, and you can still link to the big bank accounts and initiate electronic funds transfers from many of the accounts listed on our website.

Spring reading

• An ode to GICs
• A discussion on how to ensure that your spouse can access your GICs if you die
• EQ Bank US dollar accounts are coming soon

Our top cash back offers

A few of the offers currently available on our cash back site include:

• $65 cash back or a $70 Amazon.ca gift card for opening a no-fee Tangerine Money-Back Credit Card
• $70 cash back or a $75 Amazon.ca gift card for opening a Scotiabank Ultimate Package Chequing Account
• $20 for signing up for a no-fee Mogo Visa Platinum Prepaid Card

Rate drops lead to a tie at the top of the savings account chart

Our savings account comparison chart has continued to see interest rate decreases as we head into the spring, most recently at Alterna Bank (from 1.20% to 1.10%), LBC Digital (from 1.40% to 1.20%), and Bridgewater Bank (from 1.55% to 1.45%).

Chart leader Canadian Tire Bank finally decreased its regular savings account and TFSA interest rate. It had been at 1.80% since April 2020, but its rates have fallen back to 1.55%. That leaves it tied with newcomer Neo Financial at the top of the regular savings account list, followed by EQ Bank and Wealth One Back of Canada at 1.50%.

EQ Bank still leads the TFSA list at 2.30%… but not for long! Starting on May 26, EQ Bank’s TFSA and RRSP savings account interest rate will decrease to 1.25%, and its regular savings account interest rate will decrease to 1.25% on April 16.

Neo Financial: a 1.55% savings account but not a financial institution

Last week, we added Neo Financial to our comparison chart. It comes with its fair share of caveats. There is no web-based online portal for its savings account — you must use its mobile app. Neo Financial is a financial technology company, not a financial institution; its savings account is technically held by Concentra Bank, so for CDIC deposit insurance coverage limits, your deposits are combined with any deposits held in a Concentra Bank account. It is this potentially confusing relationship with Concentra Bank that has led some forum users to suggest that Neo Financial shouldn’t even be posted on our chart.

Nevertheless, the savings account available through Neo Financial has a 1.55% interest rate, and with this account you can pay bills, send and receive Interac e-Transfers, and make electronic transfers to and from your other bank accounts.

5-year GICs above 2.00%

Yes, you read that right. Oaken Financial recently increased its 4-year (1.90%) and 5-year (2.10%) GIC rates, retroactive to March 23. That’s the first GIC rate at or above 2.00% that our GIC comparison chart has seen in 2021.

It was followed by a round of GIC rate increases at LBC Digital, with a 2.00% 5-year GIC available starting April 12.

For shorter terms, Peoples Trust and Peoples Bank are offering 1.55% for a 1-year or 15-month GIC. Starting on April 16, EQ Bank will be offering a 1.50% 3-month GIC, and you can still get a 2.30% 3-month TFSA or RRSP GIC from EQ Bank before May 26.

New promos and developments

• Simplii Financial has a targeted new deposit promo for existing clients: 1.25% between April 1 and July 31, 2021
• Tangerine Bank has a targeted new deposit promo for existing clients: 1.50% between April 8 and August 31, 2021
• motusbank has a new mobile app; is it better than it was before?
• Wealth One Bank of Canada now has a chequing account
• The no-fee Home Trust Preferred Visa is losing its roadside assistance and rental car insurance benefits starting May 31, 2021

Motive Financial headlines savings account rate drops

The first savings account rate changes on our comparison chart in 2021 are decreases: First, Outlook Financial decreased its regular savings account and TFSA interest rate from 1.20% to 1.10%. This was most recently followed by equivalent decreases at MAXA Financial (from 1.20% to 1.10%). Peoples Trust has decreased its savings account and TFSA rates from 1.30% to 1.20%. Most notably, Motive Financial decreased its Savvy Savings account and TFSA interest rate from 1.55% to 1.25%.

Canadian Tire Bank is still our savings account rate leader at 1.80%, followed by Bridgewater Bank at 1.55% and EQ Bank and Wealth One Bank of Canada at 1.50%. EQ Bank still has the top TFSA (and RRSP) rate at 2.30%, although time will tell how long those rates will last.

Does EQ Bank have the easiest online account opening process?

Last summer, our forum members highlighted a few financial institutions with fully online account opening processes. This month, there’s been a new discussion about which financial institutions have the easiest online account opening process. EQ Bank takes the crown according to our forum members, with Tangerine Bank and Hubert Financial garnering some mentions as well.

GIC rates are mostly unchanged

Generally, GIC rate changes have been few and far between to start 2021.

Motive Financial has decreased its chart-leading GIC rates, leaving Wealth One Bank of Canada as the 5-year rate leader at 1.90%. Wealth One is tied for the top 3-year and 4-year GIC rates at 1.65% and 1.70%. Peoples Trust and LBC Digital have the highest 2-year GIC rate at 1.60%, and Peoples Trust has the highest 1-year GIC rate at 1.55%.

Promotions and credit card cash back offers

The latest addition to our promotions page is Tangerine Bank’s targeted 1.50% new deposit promo between March 9 and July 31. If you are a current customer, check your Insights tab to see if you have received the offer.

On our cash back website, we have a few elevated cash back offers for the rest of March: $60 cash back for signing up for a Tangerine Money-Back Credit Card or World Mastercard, and $100 cash back for signing up for one of a trio of Scotiabank credit cards: the Momentum Visa Infinite Card, Passport Visa Infinite Card, and Gold American Express Card.

New year, new banks

Looking for a new bank? Not only are there plenty of existing options from long-established financial institutions, but there are also brand new accounts to choose from.

New Ontario-only online bank Saven Financial (a division of FirstOntario Credit Union) has a 1.55% savings account and a set of GICs that include a 2.05% 5-year GIC.

Neo Financial, which launched last year, no longer forces you to apply for its credit card before you can open a savings account, although you must still use its mobile app to open the savings account for now. Neo Financial’s savings account, which is technically held behind the scenes by Concentra Bank, has an interest rate of 1.55%.

Lastly, Concentra Bank has its own savings account with a 1.55% interest rate, but for now this savings account is only available if you have a GIC with them.

1.55% is the second highest savings account interest rate on our comparison chart, whereas 2.05% for a 5-year GIC is better than any other rate on our GIC comparison chart.

Promos before RRSP season ends

Are you looking for a place to make your RRSP contributions before the March 1, 2021 deadline for the 2020 tax year? There are quite a few RRSP-eligible promotions on our promotions page, including the following:

• Manulife Bank: 2.00% on new deposits to TFSA and RRSP savings accounts until April 30 (on deposits made before March 12)
• DUCA Credit Union (Ontario only): 6.67-year cashable RRSP or TFSA GIC: 1.00% if you cash in after 1 year; 2.00% if you hold the GIC for the full 80 months. Promo ends March 31
• RBC: 1.5% promo for 3 months in a new savings account before April 30; 2.0% for 3 months if you also open a TFSA or RRSP
• Tangerine Bank targeted 1.75% new deposit promo between February 9 and June 30 for existing clients

More reading: Retirement savings rules, a CDIC contest, and tax credits

• A discussion thread on RRSP, OAS, and pension rules
• The CDIC (Canadian Deposit Insurance Corporation) has a free online “Earn & Learn” Game with a total of $10,000 in prizes
• Canadians can claim up to a $75 tax credit on their 2020 to 2024 income tax returns for digital news subscriptions
• Accounts payable: Paying suppliers and vendors electronically in Canada

What a difference a year makes for rates

Last January, we were talking about a 3.30% savings account at LBC Digital, and every financial institution on our savings account comparison chart had an interest rate of at least 2.00%, with the exception of Canadian Tire Bank. Today, Canadian Tire Bank leads our chart with a savings account interest rate of 1.80%, and most other rates are closer to 1.00%. Just last month, there were more rate decreases at LBC Digital and MAXA Financial, and Hubert Financial even decreased its rate twice in 7 days.

12 months ago, 5-year GIC rates were nearing 3.00%, and there was even a 1-year GIC promo at 3.00%. Today, we don’t even have a 5-year GIC at 2.00%. Although, you might not feel the impact of fluctuating rates as much if you’ve set up a GIC ladder.

But there is hope around rates, and not just for those who are in the market for a mortgage!

EQ Bank’s recently launched TFSA (and RRSP) offers the best rate around at 2.30%. They are also offering that rate for a TFSA or RRSP 3-month GIC. Even if you’re skeptical of how long the rate will last at 2.30%, EQ Bank doesn’t yet have any transfer-out fees.

Tangerine Bank continues to play the promo game, with January’s targeted new deposit promo offering 1.75% until May 31, 2021. Our promotions page features some other usual suspects such as Simplii Financial and CIBC, as well as a 1% transfer-in bonus from Meridian Credit Union for TFSA and RRSP funds.

Lots more personal finance news

• If you were a Simplii Financial client in May 2018 and were affected by a data breach, you might be entitled to receive some compensation
• Two-step authentication is coming to the Tangerine Bank login process
• StudioTax is no longer free, but there are other options if you want to get a jump start on this year’s income taxes
• What qualifies as excessive trading in a TFSA?
• Our cash back offers for the Scotiabank Momentum Visa Infinite Card, Scotiabank Gold American Express Card, and Scotiabank Passport Visa Infinite Card have been increased to $100