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2019 rates are up from last year

Today, the Bank of Canada decided to keep its key interest rate the same. In its statement, it revised the real GDP outlook down slightly from the last update. However, 2018 saw interest rates and savings account rates continue to rise modestly and steadily, and every financial institution on our chart begins 2019 with rates higher than at the start of 2018, with the exception of Canadian Tire Financial. Motive Financial has the top savings account interest rate at 2.80%, and Ideal Savings leads for a TFSA at 2.76%.

The highest advertised, non-promo 5-year rate on our GIC chart is 3.60% (shared by EQ Bank and Oaken Financial), whereas last January it was Oaken Financial at the top with 3.15%.

More TFSA contribution room

As we welcome 2019, remember also that adults 18 years of age and older get another $6,000 of TFSA contribution room, as well as any unused contribution room and withdrawn amounts from 2018. In addition to regular rates, there are quite a few TFSA-eligible promotions such as Ontario-only Ganaraska Credit Union’s 4.00% 4-year GIC promo and Ideal Savings’ 3.25% 150-day GIC promo.

The targeted Tangerine Bank Winter 2019 promotion on new deposits, including to TFSAs, has arrived, so if you are a current customer, check your e-mail or online account for what has been reported as a 3.00% rate.

There are also TFSA-specific short-term promos (from 2.5 to 4 months) such as at BMO (3.25%), CIBC (3.00%), and Meridian Credit Union (3.25%). Be sure to do the math, though, and factor in normal rates after the promo expires as well as TFSA transfer out fees. If you intend to leave your money deposited past the promo period, you might be better off with a financial institution that has a non-promotional rate that works out higher in the long run.

Hubert Financial rate is back up

After decreasing its regular savings account interest rate from 2.50% to 2.30% on December 5, Hubert Financial brought the rate back to 2.50% less than 3 weeks later on December 22. That makes Hubert Financial tied with Bridgewater Bank on our chart for the third highest rate for regular savings accounts, and the second highest TFSA rate.

In other news, last month Alterna Bank increased its regular savings account and TFSA interest rates from 2.25% to 2.35%.

Personal finance cash back

High Interest Savings Accounts Cash Back is now live! High Interest Savings has partnered with several financial institutions to get you money back (via e-mail money transfer) for opening an account with them. Get $40 back for opening an EQ Bank account, $60 back for a Scotiabank credit card, or $5 to check your credit score with Borrowell. You can use your normal High Interest Savings forum account to access the offers.

Bridgewater, Motive, Oaken, Wealth One play catch-up; Hubert Financial rate decrease

On December 5th, Hubert Financial somewhat surprisingly decreased its regular savings account interest rate from 2.50% to 2.30%, which is even lower than its 2.35% rate from August. Its TFSA (and RRSP and RRIF) interest rate remains at 2.50%.

The rest of the rate changes have been positive, mostly from financial institutions playing rate catch up after the flurry of increases over the past few months. Bridgewater Bank increased its regular savings account interest rate to 2.50%; it had been at 1.75% since January 2016. Oaken Financial made a similarly large jump to its regular savings account interest rate, from 1.50% to 2.30%. Also seeing an increase was Wealth One Bank of Canada’s TFSA to 2.30%, matching its regular savings account rate; and Motive Financial’s TFSA to 2.40%, which had been at 1.80% since October 2015.

Motive Financial remains the regular savings leader at 2.80%, and Ideal Savings remains the TFSA leader at 2.76% on our comparison chart.

For a bit more insight into Motive Financial, see this detailed review of the account opening process by forum member Alexandre, who chronicled the 15-day process from application submission to account creation.

Promotions and multi-year GIC strategies

• Ideal Savings currently has a 150-day GIC promo at 3.25%, which is higher than any regular 1-year GIC rate on our chart
• Ontario-only Ganaraska credit union has a 4-year GIC at 4.00%, with a 1.25% cashable rate. As pointed out by forum user “thisusernameforlease”, if you’re concerned that you might need some money from a GIC before it matures, simply open multiple GICs for the same term. For example, open 5 x $1,000 4-year GICs rather than 1 x $5,000 4-year GIC. Combine this with a GIC ladder (multiple GICs of different terms that mature in staggered increments such as every year) for maximum GIC liquidity!
• Canadian Tire Financial has dropped near the bottom of our comparison charts over the past few years, but if you’re a current customer, look for a targeted promotion for 3.20% on new deposits to a High Interest Savings account between December 10, 2018 and June 30, 2019

2019 TFSA contribution limit

As 2018 comes to an end, you might be starting to calculate taxes and rounding out charitable donations, as well as looking ahead to 2019’s TFSA contribution limit. The 2019 limit will officially increase another $500 to $6,000, making a cumulative total of $63,500 for those who were at least 18 years old when the TFSA was introduced in 2009.

Remember that any amount withdrawn from your TFSA is re-added to your outstanding contribution room the next calendar year. If you’re considering transferring existing TFSA funds between financial institutions, this makes the end of 2018 a good time to withdraw money to be re-deposited in January, so that you don’t have to go through the administrative process of a direct transfer, which might include transfer out fees.

Motive Financial introduces 2.80% savings account

This month, Motive Financial quietly introduced new savings and chequing accounts. The Motive Savvy Savings Account currently has a market-leading 2.80% interest rate, topping the Ideal Savings 2.76% rate. The Motive Savvy Savings Account has only 2 free external transactions per month, then charges $5 per transaction. However, transfers between internal accounts are free, so you can pair it with a Motive chequing account and not have to worry about the transaction limit.

The new Motive Cha-Ching Chequing Account looks to be the same as the existing no-fee chequing account that Motive offers, except that it now has unlimited Interac e-Transfers.

It is a bit odd that Motive introduced these new account types rather than modifying its existing accounts. The Motive Savings Account has been stuck at 1.50% since July 17, 2015, and its TFSA is still sitting at 1.80%, even though the Bank of Canada’s key interest rate has gone up 5 times starting in 2017. But the bottom line is that these new accounts are attractive in rate and features!

Savings account interest rate increases and competition

On October 24, 2018, the Bank of Canada raised its key interest rate by 0.25% to 1.75%, and signaled that more hikes are expected. In response, many financial institutions increased their regular savings and TFSA interest rates, including MAXA Financial (to 2.45%), Outlook Financial (to 2.40%), Achieva Financial (to 2.40%), Implicity Financial (to 2.40%), Hubert Financial (to 2.50%), AcceleRate Financial (to 2.40%), and Peoples Trust (regular savings account to 1.65%).

In the case of Achieva Financial, it had initially increased its rates from 2.15% to 2.30%, then to 2.40% a few hours later that same day. Implicity Financial did something similar, initially increasing its rates from 2.15% to 2.35%, then to 2.40% the next day. Looks like healthy competition worked in favour of Canadian savers!

The savers account leader is currently Motive Financial at 2.80%, followed by Ideal Savings at 2.76%, Hubert Financial at 2.50%, MAXA Financial at 2.45%, and a 4-way tie at 2.40%. The leaders are the same on the TFSA side except for Motive Financial, which is not amongst the top rates.

Get 3.00%+ savings account interest rates with promotions

There are quite a few current savings account promos that will get you 3.00% or higher. Here are some of the newest ones:

• CIBC eAdvantage Savings Account net new deposits promo: 3.00% between October 16, 2018 and March 31, 2019
• Tangerine Bank’s latest new customer promo: 3.00% savings account interest rate until April 30, 2019
• Simplii Financial: 3.15% on new deposits in a savings account between November 1, 2018 and February 28, 2019 (fodder for negotiation with Tangerine Bank)

GIC options: Tangerine Bank and Simplii Financial become competitive

Tangerine Bank and Simplii Financial have kept most of their rate changes in lock-step over the years, including their currently uncompetitive standard 1.25% savings account interest rate and their penchant for promotional rates for new accounts and new deposits.

At the beginning of November, Tangerine Bank increased its GIC rates to be close to the top of our GIC comparison chart, including the highest nationally-available, non-promotional 1-year GIC rate at 3.10%. A couple of days later, Simplii Financial increased its GIC rates across the board by up to 0.40%, matching Tangerine’s rates.

Some of the newest GIC promos include the following:

• EQ Bank: 3.33% for a 3-month GIC
• DUCA Credit Union: 3.00% for a 1-year GIC or 3.25% for a 3-year GIC redeemable after each year
• First Ontario Credit Union (Ontario only): 9-month GIC at 3.25% (new money only); 5-year GIC at 3.75%
• WFCU Credit Union and Omnia Direct (Ontario only): 3.40% for a 1-year GIC

Goodbye Zag Bank

Zag Bank, a virtual bank owned by Desjardins, had not offered competitive rates for quite a while. It recently announced that it is shutting down, mostly before the end of 2018. A silver lining is that it paid out a $25 goodwill bonus to existing customers.

Hello federal credit union Coast Capital Savings

Coast Capital Savings, formerly a BC credit union, became a federal credit union (although not available in Quebec yet) on November 1, 2018. Its launch promos include 2.70% for a convertible 16-month GIC, and a 2.00%/3.00%/4.00% 3-year escalator GIC.

Simplii Financial’s new no-fee cash back credit card

Simplii Financial has come out with a no-fee cash back credit card that is only available to current Simplii Financial clients for now. In short, it is a Visa without an annual fee and offers 4% back at restaurants; 1.5% at gas, grocery stores, and recurring payments; and 0.5% on everything else. You can get 10% cash back (up to $50 back) on your first 4 months of spending at restaurants. Forum member “User230” has done a comparison of the new Simplii credit card against several other cards.

One comparable current credit card offer is for the Scotiabank Momentum Visa Infinite, which has a $99 annual fee waived for the first year, gives 4% back at gas and grocery purchases, 2% back at drug stores and recurring bill payments, and 1% back on everything else. You can get 10% back on all purchases (up to $200 back) for the first 3 months.

Ideal Savings rockets to the top

We have a new high interest savings account interest rate leader, and it’s not even close. Ideal Savings has now increased both its regular savings and TFSA interest rates from 2.00% to 2.76%. That’s more than double the lowest rate on our comparison chart and 0.41% more than the second highest rate. There are some savings accounts that don’t even pay 0.41%!

More rate increases: AcceleRate Financial and Wealth One Bank of Canada

On October 4, AcceleRate Financial increased its regular savings and TFSA interest rates from 2.25% to 2.35%.

Wealth One Bank of Canada had a promotional rate of 2.50% that ended on September 30, but its regular rate is now 2.30%, which is technically an increase over its previous 2.00% rate. Note that their TFSA lags a bit, with a 1.65% interest rate.

The top 5 for regular savings accounts is thus:

• Ideal Savings: 2.76%
• Accelerate Financial and Hubert Financial: 2.35%
• EQ Bank and Wealth One Bank of Canada: 2.30%

The top 5 for TFSAs is as follows:

• Ideal Savings: 2.76%
• Accelerate Financial and Hubert Financial: 2.35%
• MAXA Financial: 2.25%
• Achieva Financial, Implicity Financial, and Outlook Financial: 2.15%

Be careful with the Scotiabank MomentumPLUS Savings Account promotion

Scotiabank currently has a savings account promotion that is advertised as “up to 3.00%”, but read the promotion details carefully: it amounts to 3.00% interest for only a portion of the term; average interest is always less than 3.00%. Is this misleading? Our forum members are clear in breaking down the actual terms of the promotion.

Oaken Financial takes back GIC leads

While we’ve seen a few GIC rate pullbacks recently, Oaken Financial has raced back to the top for national, non-promo rates in all but the 1-year GIC, where EQ Bank leads with a 2.91% rate (over Oaken’s 2.90% rate). Oaken Financial’s chart-topping rates currently sit at:

• 2-year: 3.30%
• 3-year: 3.35%
• 4-year: 3.40%
• 5-year: 3.60%

Current promotional rates

As always, there is no shortage of promotional rates; new ones this month include:

• Meridian Credit Union: 3.15% for 6-months in a new savings account
• Meridian Credit Union: 3.25% for a 1-year GIC funded by new money
• Parama Credit Union (Ontario only) increases its new money GIC promos: 3.10% for a 1-year GIC and 3.40% for a 3-year GIC
• Luminus Financial: 1.00% bonus rate (2.75% total on current 1.00% base rate) on new deposits to an Investment Savings Account until September 30, 2019
• Tangerine targeted promo: 3.00% for 180 days on entire balance
• See all currently tracked promos

Other news

In Toronto at the beginning of November? Check out the Canadian Personal Finance Conference, happening November 4-5.

More incentive to sign up with Hubert Financial

There have been no changes to regular savings or TFSA interest rates recently — especially with the Bank of Canada holding its key interest rate steady this month — but the current Canadian leader Hubert Financial (2.35%) is running a promotion for new sign-ups that gets the new customer $25 and, if they were referred by someone, $25 for the referrer as well.

GIC rates current snapshot

We haven’t seen much movement in GIC rates over the past month other than a few Motive Financial fluctuations and increases across the board from AcceleRate Financial. The current leaders are:

• 1-year GIC: 2.85% at AcceleRate Financial and Hubert Financial
• 2-year GIC: 3.10% at Oaken Financial
• 3-year GIC: 3.25% at EQ Bank and Oaken Financial
• 4-year GIC: 3.33% at Wealth One Bank of Canada
• 5-year GIC: 3.52% at EQ Bank

Promotions are everywhere

Our promotions page is always full of deals, but financial institutions have been especially busy rolling out new promotions, most of which beat the highest standard savings account and GIC rates, over the past few weeks. If you’re in the market for a new bank or you don’t mind transferring your money around, here is some of what we’ve been tracking lately.

Savings accounts:

• Meridian Credit Union: 2.80% for 6-months in a new savings account
• DUCA Credit Union net new deposits savings account promo: 3.25% until December 3, 2018
• RBC: 3.00% interest rate for 6 months on new eSavings Accounts opened by November 30, 2018
• HSBC net new deposits: 2.80%, or 3.35% over $25K, or 3.40% over $50K, or 3.50% over $100K until November 15, 2018
• Tangerine Bank: 2.75% interest rate for 6 months in a new savings account opened by October 31, 2018

GICs:

• Meridian Credit Union: 3.00% for a 1-year GIC funded by new money; 3.75% for a 5-year GIC funded by new money
• Achieva Financial: 2.80% for a 20-month GIC, and 3.45% for a 5-year GIC until October 20, 2018
• Implicity Financial: 2.85% for a 1-year GIC funded by new money; 3.00% for a 2-year GIC funded by new money

More reading

• The long, dark night for GIC investors and savers has finally come to an end
• The Oaken Financial newsletter: “The good news about the increase in interest rates is that it usually signals better returns on deposits like GICs and high interest savings accounts. The bad news is that it can take some time for those returns to show up. Financial institutions don’t automatically raise savings rates just because the Bank of Canada rate has risen. They will also make their decisions based on competitive market pressures and their own financial needs.”
• Foreign currency exchange transfers: don’t use your bank! The case to consider both Wise (formerly TransferWise) and OFX