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Wealthsimple, the 5-year old online investment service, has introduced Wealthsimple Cash, which is being branded as a hybrid chequing and savings account with a 2.40% interest rate.

Wealthsimple Cash is the evolution of Weathsimple Save (originally called Wealthsimple Smart Savings, launched in partnership with EQ Bank). It is technically, as of today, mostly a savings account with an updated interest rate, but promises that some key chequing account features are coming soon.

The interest rate would rank well on our high interest savings comparison chart; it would be tied with Outlook Financial behind LBC Digital (3.30%), Motive Financial (2.80%), EQ Bank (2.45%), and MAXA Financial (2.45%).

Note that Wealthsimple Cash cannot be held inside a TFSA or RRSP. It is also not CDIC insured, although the deposits are stored at 2 of the 6 Canadian Big Banks — Wealthsimple declines to mention which ones specifically — and are CIPF insured.

Hybrid account: is it chequing or savings? It’s both!

Once the chequing account features are added, Wealthsimple Cash will be a hybrid chequing and savings account — designed so that you can do all of your day-to-day banking and savings needs in one account. This way, you don’t have to manage cash flow between the chequing and savings accounts, or worry about holding large minimum balances in order to avoid chequing acccount fees.

Currently, the other main competitor in the “hybrid account” space is the EQ Bank Savings Plus Account, which was originally a Wealthsimple Save partner. EQ Bank not-so-coincidentally increased its hybrid account interest rate from 2.30% to 2.45% 2 days after the Wealthsimple Cash announcement, in order to top Wealthsimple Cash’s 2.40% interest rate by 0.05%.

Wealthsimple Cash is a no-fee account with no minimum account balance. It will soon include bill payments and free Interac e-Transfers. After that, there are some differences in features between Wealthsimple Cash and EQ Bank.

Weathsimple Cash supports joint accounts, which are apparently coming soon to EQ Bank.

You’ll be able to make purchases and ATM/ABM withdrawals (with ATM fee reimbursements) with Wealthsimple Cash’s Prepaid Visa card (made of tungsten, as it appears to be trendy to have metal cards) rather than a traditional debit card. It won’t charge you a foreign currency exchange transaction fee if you make purchases in US dollars for example. (It’s a Visa after all, and there are quite a few pure credit card options that also waive the forex fee.) Although not quite the same, EQ Bank has its own forex partnership with Wise (formerly TransferWise) for sending money internationally.

FinTech and why you should care

Wealthsimple has been touted as one of the great examples of FinTech in Canada. But is the definition of “financial technology” actually important to you? When EQ Bank talks about moving their core banking system to the cloud, is it as good as they say it is?

Wealthsimple Cash and the EQ Bank Savings Plus Account are branded as a different type of account. However, while EQ Bank is a Schedule I Bank, Wealthsimple is not. It’s up to you to decide whether the lack of technical CDIC coverage at Wealthsimple is a deal breaker.

What is clear is that FinTech is helping to accelerate innovation in personal banking. 91% of Canadians believe that “banking has become a lot more convenient because of new technologies”. Wealthsimple Cash’s Prepaid Visa will be implemented in partnership with Peoples Trust, using a similar setup that Peoples Trust already has with the KOHO Visa and Stack Mastercard. Both of those cards have an offering that waives foreign currency exchange fees, and offer rewards such as cash back. KOHO even has a 2.00% savings account that is not CDIC-insured and that is “offered by Canadian ShareOwner Investments Inc” — a company owned by Wealthsimple.

Wealthsimple has been steadily adding to its offerings, including its commission-free stock trading platform Wealthsimple Trade and its recent acquisition of SimpleTax, one of the most used tax return software. This is helping to make more Canadians aware of FinTech’s reach, even though the Big Banks play a part in some of the offerings and still hold 90% of assets.

New year, new TFSA contribution room

If you turn 18 or older this year, you received an additional $6,000 of TFSA contribution room on January 1, 2020. Remember that you can use a TFSA for investments other than a savings account. If you choose to use a savings account, there is no shortage of financial institutions with short-term TFSA promotions to start the year. Be sure to take into account what the regular interest rate is after the promo has expired, as well as any transfer-out fees should you wish to move your money elsewhere. Compare these offers against the regular rates on our comparison chart. If you decide to leave your money in the account all year, you might be better off forgoing a higher promo rate in favour of a decent regular rate.

For example, CIBC has a 2.75% TFSA promo until March 31, 2020. After the promo period has ended, the regular rate is 1.00%. That averages out to less than 1.50% in interest if you leave your money in for the entire year, which is worse than the regular rate for all of the financial institutions on our chart. There is also a $100 transfer-out fee should you wish to directly transfer your TFSA funds to another financial institution.

The first 60 days of 2020 also represent your last chance to apply RRSP contributions against your 2019 tax return, and some of the TFSA promos (including the CIBC one mentioned above) also apply to RRSPs.

Manulife Bank is offering 3.00% in a TFSA or RRSP until April 30, 2020 on new deposits made before March 13, 2020. Its regular rate is 1.20% and it currently has no transfer-out fee.

Meridian Credit Union has a 1% bonus promo for transfers (minimum $10,000) from other financial institutions into an RRSP or TFSA, which can stack with a 3.00% offer for 4 months in your first account. Its regular rate is 1.30% and it has a $75 transfer-out fee.

If you’re an existing Tangerine customer, its next round of targeted promos has been reported as being between 2.50% and 2.75% on new deposits made between January 6 and May 31, 2020. New clients can get 2.75% for 5 months. Both of these offers apply to regular savings accounts, TFSAs, RRSPs, RRIFs, and US dollar savings accounts. Tangerine’s regular interest rate for the regular savings account, RRSP, and TFSA is 1.05%, and there is a $50 transfer-out fee for registered accounts.

LBC Digital is the only widely available 3.30% savings account remaining

After only a few months, B2B Bank’s 3.30% savings accounts can no longer be opened directly by consumers, and requires a relationship with a financial advisor or deposit broker. However, LBC Digital still remains available to everybody with the same 3.30% savings account interest rate. How long this rate will last remains to be seen!

Take your pick for GICs

On our GIC comparison chart, Peoples Trust has the highest 1-year GIC at 3.00%, while Oaken Financial is the leader for all the longer terms, the highest being 2.90% for a 5-year GIC.

There is no shortage of other GIC promos elsewhere (especially at Ontario Credit Unions), including:

• RCU Credit Union (Ontario only), with a 2.80% 1-year GIC
• Parama Credit Union (Ontario only), with a 2.75% 1-year GIC
• Omnia Direct (Ontario only), with a 2.60% 1-year GIC, a 2.70% 2-year GIC, and a 2.80% 5-year GIC
• Ganaraska Credit Union (Ontario only), with a 3.00% 3-year GIC
• DUCA Credit Union (Ontario only), with a 3.00% 5-year cashable GIC
• Weyburn Credit Union (Saskatchewan only), with a 3.35% 54-month (4.5 years) GIC

Check out our continuously updated promotions page for more!

Cash back and more news

• Meridian Credit Union and motusbank now have a Price Drop feature in their mobile apps, where you submit receipts and they alert you (and sometimes refund the price difference) if your purchase is cheaper elsewhere
• $110 cash back (for the rest of January from High Interest Savings), and 10% cash back on all purchases for the first 3 months with the Scotiabank Momentum Visa Infinite Card
• $45 cash back (for the rest of January from High Interest Savings) and 4% in Money-Back rewards in up to 3 categories for the first 3 months with the Tangerine World Mastercard and Tangerine Money-Back Credit Card

LBC Digital: A second 3.30% savings account from Laurentian Bank

Just a few months after unveiling B2B Bank with a 3.30% savings account interest rate, Laurentian Bank has now launched LBC Digital with yet another 3.30% savings account, as well as a no-fee chequing account. LBC Digital has separate CDIC coverage from B2B Bank. The 2 financial institutions are quite similar, although LBC Digital is not officially available in Quebec yet, whereas B2B Bank is. (People have reported that you can still open an LBC Digital account in Quebec if you register through its English site.) If you already have a B2B Bank account, you must use a different e-mail address to sign up with LBC Digital.

Some forum members have had a smooth experience with LBC Digital so far, but others have reported problems logging in, errors in the online interface and features, and struggles to even open an account. For the time being at least, the bottom line is that both B2B Bank and LBC Digital offer a 3.30% interest rate that tops our comparison chart and beats all of the numerous new deposit and new account promos we track. Read more about other people’s experiences (and share yours) with LBC Digital on our forum.

GIC leaders and non-standard GIC terms

With its latest across-the-board GIC rate increases, Oaken Financial is the current outright leader on our GIC chart for 1-year (2.55%), 2-year (2.65%), 3-year (2.70%), 4-year (2.80%), and 5-year (2.90%) terms. It also has a 2.60% 18-month GIC.
If you live in Ontario, you might want to look into Buduchnist Credit Union, which has the only GIC promos that beat the Oaken Financial rates, albeit for some non-standard terms: 11 months (2.50%), 23 months (2.70%), and 44 months (2.85%) if you open the GICs before January 11, 2020.

Holiday reading: TFSA limit, Amazon.ca Mastercard, more free Interac e-Transfers

• The 2020 TFSA contribution limit will once again be $6,000. That’s a cumulative total of $69,500 in contribution room if you turned 18 or older in 2009.
• In case you are considering transferring TFSA funds between financial institutions, this is your annual reminder to consider withdrawing the funds near the end of the year to be re-deposited elsewhere in January. This might save you some transfer fees and administrative hassle.
• After a bumpy launch and then unlaunch a few months ago, looks like the Amazon.ca Mastercard is open to applications again.
• Do you feel comfortable entering your online bank username and password when setting up bank account external links? Join the discussion.
• Tangerine Bank now has free Interac e-Transfers. It joins quite a few financial institutions (including but not limited to Alterna Bank, B2B Bank, EQ Bank, LBC Digital, Motive Financial, and Simplii Financial) that have free Interac e-Transfers without requiring a minimum balance in your account.

Work for your GIC deals

We’ve seen very little movement on our GIC chart over the past month. The spread between the best 1- and 5-year rates is only between 2.50% and 2.85%.

Look a little closer at some lesser-known financial institutions, and there are some better deals to be had, such as the following:

• Energy CU, with branches in the GTA, has a 3-year 3.40% GIC
• 1Q Bank has a unique 36-month GIC where you can earn up to 3.00%, although it involves setting and achieving deposit goals over the term
• Talka Credit Union (Hamilton, Ontario) has a 3.00% 5-year GIC

Savings account interest rates beat GICs?

Look even closer, and in some cases, keeping your money liquid might offer you a better rate than a GIC.

We have now added B2B Bank to our comparison chart. It tops the regular savings account chart at 3.30% — a rate that it has kept since B2B Bank first appeared on our radar on August 12, 2019. Note that it does not have registered accounts, at least not yet. If you’ve had any issues opening an account with B2B Bank, check out other people’s experiences in our forum. The next highest rate on our chart is Motive Financial 2.80%, then MAXA Financial (2.45%), Ideal Savings (2.40%), and Outlook Financial (2.40%).

For a TFSA account, MAXA Financial still leads our chart at 2.45%, followed by Ideal Savings, Motive Financial, and Outlook Financial at 2.40%.

Elsewhere, Alterna Bank has decreased its regular savings and TFSA interest rates from 2.30% to 2.25%.

There are quite a few active deposit promotions, including:

• Simplii Financial new deposit promo for 6 months: 2.80% between November 1, 2019 and April 30, 2020. Existing clients need to register for the offer.
• If you had a Tangerine Bank promo that recently ended, check to see whether you received the latest offer, for 2.50% on new deposits until April 30, 2020
• RBC’s new account promo (2.50% interest for 3 months when you open your first RBC High Interest eSavings Account) has been extended to January 31, 2020 (previously December 13, 2019)
• La Capitale’s (Quebec only) new deposit promo is 3.00% in High-Interest Savings Accounts between October 17, 2019 and January 31, 2020; and 3.00% in TFSAs between October 17, 2019 and February 28, 2020
• DUCA Credit Union (Ontario only): 2.30% on new deposits to an Earn More Savings Account until March 31, 2020

Credit card cash back offers and a free personal finance course

On our cash back site for the rest of November, you can get $80 if you successfully sign up for one of a few Scotiabank credit cards: the Scotiabank Momentum Visa Infinite Card, Scotiabank Passport Visa Infinite Card, and Scotiabank Gold American Express Card.

Need to improve your personal finance knowledge? McGill University is offering a free online personal finance course!

In other news, if you have the Home Trust Preferred Visa, starting in 2020, it will still waive the foreign currency transaction fee, but will no longer give you 1% cash back for such purchases. (Other purchases will continue to earn 1% cash back.)