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Bank of Canada rates on hold; Hubert Financial and Ideal Savings decrease rates

Last month, the Bank of Canada left the key interest rate at 1.75%, and they also removed their previous language about the possibility of rate hikes later in the year.

On the savings account end, there have been a few recent interest rate drops to both regular savings and TFSA accounts: Ideal Savings (from 2.50% to 2.40%), Hubert Financial (from 2.50% to 2.35%), and Meridian Credit Union (from 1.40% to 1.30%). Meridian Credit Union now provides 24-72 hours notice of rate changes via e-mail and on their website, although we no longer list Meridian Credit Union on our main comparison chart.

Motive Financial is the current leader on our chart for regular savings accounts at 2.80%, while motusbank is the TFSA leader at 2.50%.

Steinbach Credit Union offers some of the highest savings account rates (2.55% to 2.85% depending on your balance) and its TFSA sits at 2.80%, although interest is paid annually and calculated on the minimum monthly balance.

GIC rates are flat

Last month saw nearly across-the-board GIC rate decreases. This seems to have settled a bit, with even a few small increases, such as at Oaken Financial. Either Peoples Trust or Oaken Financial hold the top spot for the 1- through 5-year GIC rates on our GIC chart, and Peoples Trust has a 15-month GIC promo at a 3.10% interest rate.

HSBC and Manulife promos for ~6 months

Of the current high interest savings promotions, the most frequently discussed ones are:
HSBC High Rate Savings Account: 2.40% to 3.00% on new deposits between April 15 and September 3, 2019 and
Manulife Advantage Account: 3.25% for 6 months in new accounts.

Business savings accounts options: up to 2.65%

Meridian Credit Union has a business savings account promo (2.65% for 4 months). that compares well against the alternatives. Outside of a promotion, Oaken Financial might be your best option in a normal rate at 2.30%, since it offers the same rate for personal and business accounts. Or, get an account at a discount brokerage and look at the Investment Savings Account options, which should give you better rates than the standard business savings accounts offered at the big banks.

Much more news!

• Forum member Doug has made a comprehensive update to our free Canadian chequing accounts comparison spreadsheet
• See the results of our 2019 personal income tax filing survey, including: 48% of respondents pay nothing at all to file their personal income taxes, and those who use software (92%) are likely to use one of StudioTax, TurboTax, SimpleTax, or UFile.
• Oaken Financial adds ability to link an unlimited number of external accounts
• The Scotiabank Gold American Express credit card will have no foreign currency exchange fee starting August 1, 2019
• The EQ Bank referral program ($25 for referrer and referee) is back until July 8, 2019

The newest online bank: motusbank

motusbank is Canada’s newest online bank. motusbank launched with a comprehensive offering of products, including a no-fee chequing account with unlimited Interac e-Transfers; savings accounts available in non-registered (2.25% interest rate), TFSA (2.50%), and RRSP and RRIF (2.25%) versions; and GICs. Its regular savings account interest rate is competitive but lower than most of the other financial institutions on our comparison chart, while its TFSA rate is tied for first.

motusbank’s marketing so far has focused more on their credit products such as their mortgages (1- through 5-year fixed mortgage rates are all 3.09%) and personal loans.

So far, motusbank looks like worthy competition for other day-to-day online banks such as Alterna Bank, EQ Bank, and Motive Financial, as well as the bigger names such as Tangerine Bank and Simplii Financial. Forum members have reported that the motusbank account opening process is straightforward, although electronic funds transfers from other banks take several days more than the competition.

Share your questions and experiences on our motusbank forum!

A flat or dropping interest rate environment for savers

Over the past month, there have been a couple of small savings account interest rate drops: Meridian Credit Union decreased its regular savings account and TFSA interest rates from 1.50% to 1.40%, and Alterna Bank decreased its regular savings account interest rate from 2.35% to 2.30%.

As well, every financial institution on our GIC comparison chart decreased at least one of its GIC rates. Click on any of the dates in the “Updated” column to see GIC rate histories for each financial institution. Hubert Financial is tied for the lead or has the outright lead for every term on our list: 3.00% for 1 year, 3.10% for 2 years, 3.20% for 3 years, 3.30% for 4 years, and 3.40% for 5 years.

If you’re seeking better rates, consider looking into GIC brokers. For example, for amounts of at least $25,000, GIC Wealth Management has some attractive rates. See also our promotions page with offers such as:

• 3.00% for a 12-month term deposit, redeemable after 180 days at BC-based G&F Financial Group
• 3.00% until January 31, 2020 on new money deposited to a savings account at Ontario-based DUCA Credit union
• 3.00% interest for 3 months when you open your first RBC High Interest eSavings Account
• Targeted new deposit promos from Canadian Tire Financial, CIBC, Tangerine, Simplii Financial, RBC, and BMO

A forum member also discovered a now-expired 3.25% 15-month GIC with a unique rate guarantee: the rate goes up if the Bank of Canada rate goes up. This was from Pen Financial Credit Union, based in Ontario’s Niagara region.

More news

• Fill out our 2019 Canadian personal income tax filing survey by the end of day on April 19 for a chance to win 1 of 2 $50 cash prizes
• Starting April 30, 2020, CDIC rules will expand to cover GICs longer than 5 years and foreign currency deposits
• Get $110 cash back for opening a Scotiabank Gold American Express credit card
• Get $35 cash back for opening a savings account or GIC with motusbank

Free Canadian income tax software

For most adult Canadians, personal tax returns are due in 1.5 months. Do you use income tax software, and if so, do you pay for it? This week, we released an article highlighting free Canadian income tax preparation software options. For further discussion on all aspects of income tax preparation, check out our newly created forum on income tax filing!

GIC rate histories and promotions

As a supplement to the GIC rates comparison chart, we now have GIC rate histories (for non-redeemable GICs) for each financial institution. Simply click on the date link in each row, or click the “GIC rate histories” link on any bank profile page. For example, you can see just how often Motive Financial has been updating its rates, which have been in the downward direction lately. GIC rates have been on a downward trend across the board, and the current regular rate leaders are those who have not made any recent rate changes.

As per usual, you can find some better GIC rates through promotions, with a couple of examples from our promotions page being from Ontario-only credit unions, such as 3.51% for a 3-year GIC at PACE Credit Union and 3.75% for a 5-year GIC at Tandia Credit Union. As well, nationally available Wealth One Bank of Canada has a somewhat unique current offer of a 0.20% cash back bonus per GIC term year on new deposits. For example, you get a 1.00% bonus (paid once) for a 5-year GIC.

Peoples Trust increases rates; Ideal Savings decreases rates

In the first rate change since December on our savings account comparison table , Peoples Trust increased its regular savings account interest rate from 1.65% to 2.00%; its TFSA is up from 1.65% to 2.25%.

Ideal Savings decreased its regular savings account and TFSA interest rates from 2.76% to 2.50%, dropping it into a tie for the TFSA lead with Hubert Financial. Motive Financial remains the leader for a regular savings account interest rate at 2.80%.

More reading

• A listing of GIC options for small businesses
• More rounds of targeted new deposit promos from Tangerine Bank and Simplii Financial
• Meridian Credit Union new customer promo available to everyone: $100 bonus when you open a Good To Grow High Interest Savings Account with a minimum initial deposit of $1,000
• More news from soon-to-be-launched motus bank: its high interest savings account will have unlimited Interac e-Transfers, RRSP and TFSA options, and more
• EQ Bank now offers unlimited Interac e-Transfers

Tax season is upon us and with it, the associated tax stress. If you haven’t already done your tax return, then it’s time to start thinking about it. The deadline to file your taxes for the 2018 calendar year is April 30, 2019, or June 15, 2019 for those who are self-employed. All Canadian citizens, or those living and working in Canada, need to file a tax return if you owe taxes, want to claim a refund, have been asked to file by the CRA, or want to receive any federal or provincial payment benefits such as GST/HST or the Canada Child Benefit.

Technology is making filing for your tax returns easier than ever. With income tax preparation software, free online tax calculators, and electronic filing, completing your 2019 tax return shouldn’t be a hassle.

Tax options for 2019

There are several options for doing and submitting your taxes in 2019. Some of the most common methods for doing taxes are:

• Using tax professional company (averaging $130 with H&R Block)
• Using an accountant or CPA (usually costing more than a “tax professional”)
• Having a knowledgeable friend or family member do them for you (free or paid)
• Doing them yourself, with or without income tax software ($0+)

Additionally, there are some free local programs to help certain Canadian citizens file their taxes. These include:

• Tax clinics for those with a modest income and straightforward tax return. Tax clinics are held across Canada, though you are required to register in advance.
• File my Return, which started in 2018 and is back again for 2019. This is a free phone service aimed at helping eligible individuals with low or fixed income.

Why you should consider income tax software in 2019

Income tax software is becoming increasingly popular here in Canada. The step-by-step programs tell you exactly what you need to have and what information to put where.

They’re quick, easy, safe, efficient, and affordable — especially if you choose free software.

So, what’s the difference between paid software and free income tax software? At first thought, you may assume that the paid version has to be better — but that’s not necessarily the case. Paid versions usually offer more support such as expert review and audit protection, however those aren’t necessarily things you need, especially if your taxes are straightforward. At the end of the day, as long as your software is certified by the CRA then you can be sure that it’s secure and worthwhile. If you can save yourself some money by taking advantage of the free income tax software, then you may as well.

Free income tax software options available to Canadians in 2019

When it comes to free income tax software options in Canada there are many to choose from. With more than 90% of Canadians filing online, you might want to focus on software that is NETFILE-certified by the Canadian government.

There are two main reasons why you want to choose a NETFILE program. The first, and most obvious, is because it’s much easier and faster. NETFILE allows you to file electronically while non-NETFILE compatible programs mean you need to mail everything in. The second reason as to why NETFILE is so advantageous is that it allows you to take advantage of the Auto-fill my return feature. This program takes information that the CRA already has on file for you such as your employment income and investment income, and automatically adds it to your current return. While this isn’t necessary, it definitely makes the process faster and easier.

There are a number of free, certified NETFILE compatible software options; here are a few of them:

SimpleTax is completely free with no paid add-ons. It lets you “Pay What You Want” with $0 as one of the options.

Features include auto-filing and express notice of assessment (NOA), as well as a tutorial mode which allows users to figure out which forms apply to their needs. SimpleTax runs in your browser or through an iOS app.

StudioTax is also completely free and can be used for any type of return. Unlike other income tax software programs, StudioTax is a downloadable program which some people prefer because it means your information isn’t stored on a third-party site. StudioTax is compatible with Windows and Mac.

TurboTax is a free option with tiered paid options for more complicated returns. Additionally, you can pay extra for an expert review or audit protection. TurboTax is compatible with Windows and Mac, as well as Android and iOS.

H&R Block offers free tax software with paid add-ons for technical support, the ability to review your full T1 General before you file, and more. The H&R Block online tax software is accessed through your browser.

Remember, while it is currently 2019 you are filing your 2018 taxes, so the programs you use will be for 2018 (the tax year you are filing for); there won’t be a StudioTax 2019 until next year!

Final word

Doing your taxes is never fun, but it doesn’t have to be stressful and expensive. This year, consider taking advantage of one of the free income tax software programs for 2019. They just might be the answer you have been looking for to save you both time and money.

Take our 2019 Canadian personal income tax filing survey for a chance to win $50!

Do you use free income tax software? Please share your experience and recommendations in our forum.

Meridian Credit Union’s TFSA and RRSP transfer-in promo

Until March 1, if you transfer at least $10,000 of TFSA or RRSP funds to Meridian Credit Union, you will receive a 1% transfer bonus of up to $750. This can be combined with its 3.25% promotional interest rate on TFSA and RRSP savings accounts for 4 months (falling back to a 1.50% regular rate thereafter), and its 3.45% promotional 3-year GIC rate.

Steady leading rates

Motive Financial remains the leader on our savings account chart at 2.80%, and Ideal Savings leads the TFSA list at 2.76%. They’ve both kept those rates for a few months now.

Since Motive Financial shot to the top of our chart in November with its 2.80% savings account interest rate, and made its TFSA rate more competitive at 2.40%, we’ve seen quite a drop in its GIC rates. Tangerine Bank has also dropped its non-registered GIC rates recently, although its TFSA and RRSP GICs have stayed a bit higher. The current leaders on our GIC chart are:

• 1-year: 3.11% at Ideal Savings
• 2-year: 3.30% at Achieva Financial, EQ Bank, Implicity Financial, and Oaken Financial
• 3-year: 3.45% at Meridian Credit Union
• 4-year: 3.55% at Hubert Financial
• 5-year: 3.60% at Oaken Financial

Big bank savings account promos

The “big banks” usually offer some of the worst savings account interest rates in Canada, but we’ve seen a couple of notable promos to start the year: a targeted promo from BMO for 3.25% until April 30 on a new Smart Saver Account, and a targeted promo from RBC for 3.00% until April 30 on new deposits to a High Interest eSavings Account.

motusbank, coming spring 2019

Meridian Credit Union’s online bank venture “motusbank” is launching some time in spring 2019, and forum members are beginning to speculate about how it will differentiate itself. motusbank has so far said that it will offer a no-fee chequing account, a high interest savings account, loans, lines of credit, investments, and mortgages, with its website claiming “an incredibly low mortgage rate”. We’ll be watching closely as its launch approaches!

More cash back offers

Last month, we launched High Interest Savings Accounts Cash Back, including a $40 offer from EQ Bank. We recently added a few offers from Tangerine: $25 for opening a chequing or savings account, and $30 for opening its Money-Back Credit Card.

Other reads

• Looking for the best USD GIC rates at RBC, TD, Scotiabank, and Tangerine, including a new immigrant’s experience with financial advisors
• RRSP or TFSA? Here’s how to know which plan makes the most sense for you this year
• How finances play into Canadians’ happiness
• Some Ontario-only GIC promos: DUCA Credit Union is advertising 3.75% for a 5-year GIC, which beats all other rates on our GIC chart; Omnia Direct is advertising 3.35% for a 3-year GIC, which would tie for second for 3-year rates on our GIC chart. See our promos page for a few additional GIC rates.