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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

Savings accounts: many, but not all, rates have increased

Since the Bank of Canada’s key interest rate increase last month, we’ve seen only 7 of the 18 financial institutions that we track raise their savings account interest rates. First it was MAXA Financial, with a 2.25% interest rate that is now tied for third with AcceleRate Financial for regular savings accounts and second for TFSAs on our comparison chart. Then, Implicity Financial, Outlook Financial, and Achieva Financial all increased their rates from 2.00% to 2.15%, whereas Meridian Credit Union increased its rate from 1.40% to 1.50%.

Hubert Financial dethrones EQ Bank at the top of our chart

On August 2, Hubert Financial increased its regular savings account and TFSA interest rates from 2.10% to 2.35%, matching the full 0.25% increase from the Bank of Canada, and also making it the national rate leader (at least for non-promotional rates)! Hubert dethroned EQ Bank, which does not offer a TFSA and has kept its rate at 2.30% since May 2017. Hubert’s 2.35% rate is a full 1.00% higher than the lowest rate on our chart. And the lowest rate on our chart is still higher than the big banks’ high interest savings accounts!

Possibly better rates exist as well

Technically, Steinbach Credit Union in Manitoba has a savings account that pays 2.35%, and even higher rates when you deposit more than $100,000; however, it calculates interest monthly based on the minimum account balance and pays the interest out yearly. Thus, we have so far not added Steinbach to our comparison chart, partially due to the inability to make a fair rate comparison.

Also, Wealth One still has a promotion running for a 2.50% savings account interest rate through September 30, 2018, while Tangerine usually has some form of new customer promotion, currently at 2.75% for 6 months.

GIC rates keep heating up, with Wealth One and Canadian Tire Financial making the biggest jumps over the past month to become more competitive on our GIC comparison chart. They still trail our leaders on 1- through 5-year terms:

• 1-year: Hubert Financial at 2.85%
• 2-year: Oaken Financial at 3.10%
• 3-year: Oaken Financial and EQ Bank at 3.25%
• 4-year: Motive Financial at 3.31%
• 5-year: EQ Bank at 3.52%

There is a lot of competition on GIC rates, with some differences of 0.01% presumably just so financial institutions can claim the top spot.

Among many advertised promotions, Meridian Credit Union’s new money promo for its 5-year GIC has been increased to 3.75% (previously 3.50%), PACE Credit Union (Ontario only) has a 3.40% 29-month GIC on new money, and Omnia Direct (Ontario only) has a 3.00% 1-year GIC.

While you’re searching for promotions, note that there are also unadvertised or targeted GIC promotions that have been reported more frequently recently in our GIC discussion forum.

MAXA Financial kicks off the next round of savings account increases

On July 11, the Bank of Canada raised its key interest rate another 0.25%, triggering immediate increases in mortgage rates. Savers should see benefits too, but as per usual, the rate increases will happen slowly. MAXA Financial was the first to act of the financial institutions we track, increasing its regular savings and TFSA interest rates from 2.00% to 2.25% on July 12, after a previous increase to 2.00% on June 20. They are the current TFSA leader on our chart and are just below EQ Bank’s 2.30% for the regular high interest savings account lead. Check our chart, our news archive, and our Twitter feed over the coming weeks to see what other financial institutions raise their rates.

Wealth One ups the promo ante

Wealth One Bank of Canada, which offered 2.50% on the entire savings account balance for a few months at the end of 2017, is back with a promotional rate of 2.50% through September 30, 2018.

Back and forth: Tangerine and Simplii Financial promos

Meanwhile, with the Simplii Financial 2.50% promo finished at the end of June, Tangerine Bank has a couple of targeted promos. If you’re a current Tangerine Bank customer, be sure to log in to your account or call in to see whether you can get one of the promo variations that our forum members have reported: 2.75% for 6 or 9 months; 2.50% on new deposits for 6 or 9 months, or some variation thereof!

GIC summer plans: many options

On our GIC comparison chart, the general direction continues to be up, with Oaken Financial currently leading or tied for the lead in 1-year (2.80%) through 5-year terms (3.50%).

There are plenty of GIC promotions giving you a lot of choice, such as a 3.00% 1-year GIC at Omnia Direct (Ontario only), which has been going on since at least May. Even for those who stick with the “big banks”, CIBC has a GIC promotion, including 3.00% for a 5-year GIC (although note that you can get up to at least 0.50% more annually elsewhere!).

At Hubert Financial, their 1-year GIC offers some unique flexibility, giving you 2.55% (or slightly higher as calculated by some forum users, since the interest is compounded quarterly / every 3 months) after a year, but allowing you to cash out at 2.40% after 3 months, and a bit more after the second, third, and fourth quarters of the 1-year term. It’s refreshing to see a financial institution advertise an “escalating” term deposit in a straightforward manner!