103 articles Comparison Page 18 / 21

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!

BMO and Simplii Financial security breaches

At the end of May, it was reported that BMO and Simplii Financial systems had been hacked, and that the information of 50,000 BMO customers and 40,000 Simplii Financial customers were stolen. Both banks reached out to the affected customers and also offered them free credit monitoring. The hackers threatened to publicly release the customer data unless a ransom of $1 million per bank was paid. Neither bank appears to have paid the ransom, and there has not yet been any confirmation about whether the data was publicly released.

June savings account and GIC leaders

EQ Bank is still the savings account interest rate leader at 2.30%, where it’s been since May 2017, followed by Hubert Financial at 2.10%, where it’s been since February 2018. TFSAs remain steady, with Alterna Bank and Hubert Financial both at 2.10%.

Among the GIC changes over the past month:

• Oaken has increased its rates and is the standalone GIC leader on 1 and 2-year GICs, and tied as the leader with EQ Bank for 3, 4, and 5-year GICs
• ICICI Bank, whose rates had languished near the bottom of our chart for quite a bit of time, has seen huge increases of between 0.85% and 1.05%, bringing them back to being competitive, although still significantly behind the leaders
• Motive Financial has seen a few rate drops to its 1-year through 5-year GIC rates, cumulatively between 0.16% and 0.30%

HSBC joins the no-forex fee credit card group

Adding to the recent influx of new credit cards that don’t charge a foreign currency exchange fee (typically 2.50% in addition to the exchange rate) is the HSBC World Elite Mastercard that does not require an existing banking relationship with them (unlike their existing similar credit cards). Currently, it has a $149 annual fee that’s waived for the first year, and provides 3% back in travel rewards for travel purchases and 1.5% back in travel rewards for all other purchases. It also comes with a $100 yearly credit for seat upgrades, baggage fees, and airport lounge passes.

The other currently notable credit cards in the no-forex fee space are:

• Rogers World Elite Mastercard: no annual fee; 1.5% net rewards on foreign exchange purchases; 1.75% on everything else
• Scotiabank Passport Visa Infinite: $139 annual fee; 6 airport lounge passes; 2% back on grocery, dining, entertainment, and daily transit; 1% back on everything else
• Home Trust Preferred Visa: no annual fee; 1% back on all purchases

Alterna Bank GIC promotion

Alterna Bank has an 18-month 2.75% term deposit promotion that was originally available only to in-branch clients. After much demand from online clients, they’ve made this promotion available to everybody!

Experiences with Manulife Bank?

The Manulife Advantage Account “might be the most useful savings account in Canada” according to The Globe and Mail, and it currently has a savings account promotion with a 2.4% interest rate. However, Manulife Bank has not received good reviews on our site. If you’ve got Manulife Bank experiences to share, please let us know!

New bank: Haventree Bank

Canada’s newest bank is Haventree Bank (formerly Equity Financial Trust), but so far it only offers GICs. There are no chequing, savings, TFSA, or RRSP accounts. Its focus is on being an alternative mortgage lender.

Savings accounts are flat; GIC rates continue to rise

Over the past month, we’ve seen no notable savings account interest rate changes for the financial institutions we track. The savings account interest rate leaders are still EQ Bank (2.30%), Hubert Financial (2.10%), AcceleRate Financial (2.05%) and Alterna Bank (2.05%). The TFSA leaders are similar: Hubert Financial (2.10%), Alterna Bank (2.10%) and AcceleRate Financial (2.05%). The Bank of Canada kept its key interest rate unchanged on April 18, although with inflation rates consistently above 2.0% this year (among other factors), we’ll be watching for the next interest rate announcements on May 30 and July 11.

However, we’ve seen plenty of interest rate increases on our GIC rates comparison chart. Motive Financial raised most of its GIC rates 4 times over the past 1 month, is the current 5-year GIC leader at 3.47% (although note that Meridian Credit Union currently has a 3.50% 5-year GIC promo for new deposits only), and along with Oaken Financial, has all of its 2- to 5-year rates at or above 3.00%. Oaken Financial is the current 1-year GIC leader at 2.80%. Peoples Trust, Implicity Financial, Tangerine Bank have all increased their rates as well since the middle of April.

Check our promos page for additional GIC rates, including a 3.00% 1-year GIC from Ontario-only Omnia Direct.

Alterna Bank unlimited Interac e-Transfers

Starting on June 1, 2018, Alterna Bank’s no-fee chequing account will offer unlimited Interac e-Transfers. Its chequing and savings accounts previously came with 2 tree Interac e-Transfers.

Is this becoming a welcome trend? Unlimited Interac e-Transfers was a key feature of the Simplii Financial launch back in November, and EQ Bank offers 5 free e-Transfers per month.

Other than that, it’s been relatively quiet for savers lately! Here are some of the stories we’re tracking:

• Tangerine Bank: targeted net new deposits savings account promotion extended through November 30
• Rogers World Elite Mastercard coming soon: no annual fee, 4% back on forex purchases, 1.75% back on other purchases; better than recently devalued Rogers Platinum Mastercard but with higher income requirement
• Simplii Financial GIC rates improving, including 2.50% 1-year GIC

Ideal Savings: short-lived stint at the top

On March 15, 2018, Ideal Savings made its 2.50% savings account promo somewhat permanent, guaranteeing its savings account interest rate until the end of 2018. That made it the Canadian leader for both its regular savings and TFSA interest rates… but for just less than 1 month! On April 13, Ideal Savings then lowered both its savings account and TFSA interest rates to 2.00%. Accounts that had been opened by April 13, 2018 will continue to receive 2.50% until the end December 31, 2018. This was somewhat reminiscent of when Ideal Savings first opened at the end of 2016 with a rate that dropped by 0.75% in less than 1 month. It’s getting hard to keep up with all their rate changes, but those who got in at the right time are enjoying a great rate.

EQ Bank is back to being the regular savings account leader on our comparison chart at 2.30%. Alterna Bank and Hubert Financial are tied for the TFSA lead at 2.10%.

Wealthsimple launches a savings account

Online investment management service Wealthsimple recently launched a high interest savings account in partnership with EQ Bank, offering a 1.70% interest rate. For those who have more than $100,000 to put in the savings account, Wealthsimple will automatically split the deposits between different CDIC members to insure up to $900,000. You can of course get a better interest rate at most of the financial institutions on our comparison chart, including directly with EQ Bank, but the Wealthsimple account provides some additional convenience for customers who use its investment services.

GIC competition continues

While savings account interest rates continue to remain flat for the time being, it’s currently a race to the top for GICs. The current leaders on our GIC comparison chart for non-redeemable rates are:

• 5-year GIC: Motive Financial at 3.30%
• 4-year GIC: Hubert Financial at 3.25%
• 3-year GIC: Oaken Financial at 3.15%
• 2-year GIC: Oaken Financial at 3.10%
• 1-year GIC: Oaken Financial at 2.75%

Some promotions offer even higher rates, including a 3.50% 5-year GIC at Meridian Credit Union on new money only and an Ontario-only 4.00% 5-year GIC at Ganaraska Credit Union that we mentioned last month.

Scotiabank Momentum PLUS Savings Account promo: read the details very carefully

Scotiabank is currently advertising up to a 2.65% interest rate on net new deposits if you leave the money in a Scotiabank Momentum PLUS Savings Account for up to 360 days. But it’s much more accurate to say it’s up to 1.80% on net new deposits, and an additional 0.85% during the period before June 29, 2018. Over the entire period, the maximum rate is closer to 2.0% or lower. Once you read the promotion details carefully, you might consider a savings account with a higher regular rate or a cashable GIC from elsewhere.

Tangerine’s creative and never-ending promos

Scotiabank-owned Tangerine Bank’s latest promotion is even more targeted than usual. Some savers have received a phone call from Tangerine’s marketing department offering 2.75% for 270 days — essentially 9 months — on the entire balance.

Tax time: tax on interest and automated filing

It’s tax time again; remember that non-registered and non-TFSA savings interest and GICs are taxed as income, whereas eligible dividends and capital gains receive some tax breaks. One forum member feels that this punishes savers, although their call for an alliance to represent the interests of savings investors was met with crickets!

New this year from the CRA is an automated “File my Return” service for low- and fixed-income Canadians. Others with simple returns might also be interested in the “Auto-fill my return” feature available in many tax return software products that automatically reads tax information such as on a T4 that has been submitted to the CRA.