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Last month, we asked readers how they feel about interest rates heading back down. 70% of respondents don’t like it, which is unsurprising, since this is a newsletter called the Savers Roundup!

The fallout from last month’s key interest rate cut has continued, with GIC and savings account interest rates continuing to drop. Ontario-only Saven Financial decreased its savings account interest rate from 4.20% to 4.05%; Wealth One Bank of Canada’s drop was from 4.00% to 3.50%. This has left Motive Financial at the top of our comparison chart at 4.10%. Neo Financial and Wealthsimple rank behind Saven Financial at 4.00%.

Will Motive Financial be affected by its new parent company?

The 6th largest bank in Canada (National Bank of Canada) is buying the 8th largest bank in Canada (Canadian Western Bank). Of particular interest (no pun intended) to savers is what will happen to Motive Financial (with the aforementioned market-leading savings account interest rate), which is owned by Canadian Western Bank. In the short term, we have received some good news, as Motive Financial’s Savvy Savings account has added some features typically reserved for chequing accounts: unlimited transactions, free Interac e-Transfers, and free withdrawals at any ATM in Canada. This makes it more similar to hybrid accounts like EQ Bank’s Personal Account and Wealthsimple’s Cash account.

Good news for Hubert Financial’s 1-year quarterly GIC

Most of the forum discussion since Hubert Financial joined Access Credit Union last year has been negative. But Hubert Financial’s popular 1-year quarterly GIC recently increased its rates (with a larger difference than before between each quarter’s rate), which is especially notable since GIC rates have been trending downward elsewhere. The simple average for this GIC is now 5.25%, or 5.35% when compounding is taken into consideration. This would easily top our GIC comparison chart, including Hubert’s own standard 1-year GIC at 4.90%. For those who are unfamiliar with the 1-year quarterly GIC, it offers a different rate every 3 months, and is cashable after each 3-month period. Its current rates are as follows:

• First 3 months: 4.50%
• Months 4 to 6: 5.00%
• Months 7 to 9: 5.50%
• Last 3 months: 6.00%

Quick hits

• Current promotions include a 5.50% 6-month GIC from DUCA Credit Union (Ontario only) and a 5.50% 120-day non-registered GIC from Motive Financial (new deposits only).
• Neo Financial no longer supports American Express bill payments through their bill payment feature

Canada’s first key interest rate cut in over 4 years – a time period that included 475 basis points of increases in 2022 and 2023 – has arrived. The Bank of Canada decreased its key interest rate on Wednesday, June 5 from 5.00% to 4.75%. It was the first central bank in the G7 to cut its rates this year, although Sweden and Switzerland made their first cuts a few months prior. The Central Bank of Europe made a similar interest rate cut the day after Canada’s.

Canada also led the US in making the first few interest rate increases in the previous cycle back in 2022, although in total the US had gone 50 basis points higher (for a total of 525 vs 475 basis points) and made one additional rate increase than Canada.

Reaction was swift in terms of rate drops for some GIC rates and brokerage investment savings accounts. GIC rates had already peaked in November and December, and we’re likely to see further decreases.

We’re also likely to see some savings account rate drops soon as well. Motive Financial had led our chart nationally at 4.10% since April 2023 (even though the Bank of Canada raised its key interest rate two more times after that). Saven Financial has led in Ontario since January 2024; its rate now sits at 4.20%.

The limit to your savings account love

In our reader poll last month, we discovered that almost 75% of respondents have at least 3 savings accounts. There are plenty of reasons to have multiple savings accounts, and we’ll just quote some of the answers here:

• “I can move funds from lowest to highest rates as promotions appear.”
• “I use various savings accounts for various savings goals, sort of like the envelope budgeting system”
• “You need more than one to get offers… they need ‘new money’ so you just transfer in and out to get offers.”
• “I have 7 savings accounts. Only a few dollars in each, except the one offering the highest rate at any given time.”

You’re doing pretty good if you have one of the savings accounts on our chart. Consider, however:

• EQ Bank offers 4.00% if you have recurring direct deposit to their account as well as up to 5.00% in their new Notice Savings Account (see the next section!)
• Laurentian Bank offers 4.00% if you have between $100K and $5M in deposits
• Wealthsimple offers 4.50% (if you have over $100K in assets with them) or even 5.00% (if you have over $500K in assets with them)
• Koho offers 5.00% if you have: recurring direct deposit to their account; or at least $1,000 in deposits every month; or if you pay them $4 per month
• Simplii Financial is offering 5.90% for 5 months for new customers and has a targeted new deposit promo for existing customers
• Tangerine Bank is offering 6.00% for 5 months for new customers and appears to have a new batch of targeted new deposit promos for existing customers every month
• There are always some other savings account promos on our promotions page

Thus, it’s no wonder that multiple savings accounts factor into the personal finance strategy of so many Canadians.

Higher rates if you can wait to access your money

Would you take a higher savings account interest rate if you had to give some notice before withdrawing your money? That’s the premise of EQ Bank’s new Notice Savings Account. It gives you 5.00% if you provide 30 days of notice, and 4.50% if you provide 10 days of notice.

This is not an entirely new concept, as Canadian Western Bank offers something similar, although with lower rates and longer notice periods. This seems to combine some features of a cashable GIC with some of the general flexibility inherent to a savings account.

4.00% is still a savings account benchmark

Laurentian Bank is the newest addition to our savings account comparison chart. Its 3.00% savings account interest rate is in the bottom half of our chart, although that increases to 4.00% on savings from $100,000 to $5,000,000. There are 5 financial institutions on our chart offering at least 4.00% as a base rate on a savings account, and 3 offering at least 4.00% as a base TFSA rate.

Tangerine’s GIC rates are competitive again

GIC rates are meaningfully down from their peak at the end of 2023, when the top 1-year GIC rate was at 6.00%, and more than half of the 5-year GIC rates were 5.00% or higher.

Tangerine Bank has made a competitive comeback in the GIC world, with its 5.00% GIC rate leading the pack for 3-year, 4-year, and 5-year terms. Remember that we track a history of GIC rate changes, so you can see just how big of a jump that is for Tangerine’s rates. The top nationally available 1-year GIC rate is 5.40% at Motive Financial – a rate that has been consistent since March.

Ideal Savings joins Hubert Financial at Access Credit Union

On June 10, 2024, Ideal Savings customers will become Hubert Financial customers (on Access Credit Union’s online banking platform). As part of this transition, Hubert Financial’s online banking will be unavailable from June 7-10. Hubert Financial’s transition to Access Credit Union last September was not the smoothest, and has been the subject of many, many complaints on our forum. However, its interest rates remain mostly competitive.

New promos

• Simplii Financial’s 5.90% savings account promo can be combined with $45 via e-Transfer or a $50 Amazon.ca gift card from our cash back website
• Earn up to $600 cash bonus on a new Chequing and Savings Amplifier Account
• Qtrade: Get $50 upon opening and funding a new account, up to $150 for 3 accounts
• See all promotions listed on our website

The mall of savings account promotions

The top rates on our savings account comparison chart are nothing to sneeze at, with Motive Financial, Neo Financial, Wealth One Bank of Canada, Wealthsimple, and Ontario-only Saven Financial all offering at least 4.00%. But there are some promos that will even beat the top GIC rates:

• Manulife Bank: 5.75% for 120 days in a new, non-registered Advantage Account opened between March 19 and June 7
• Migrated HSBC savings accounts to RBC get 5.5% on their savings account between April 1 and June 28
• Simplii Financial new customer promo: 6.00% in a savings account for the first 5 months
• Tangerine Bank new customer promo: 5.75% savings account interest rate for the first 5 months with the promo code “EARNMORE”
• Simplii Financial targeted 3-month new deposit promo for existing customers: 5.50% or 5.75% between April 11 and July 15
• Tangerine targeted 5-month new deposit promo for existing customers: 5.25% or 5.50% between April 3 and August 31

DUCA Credit Union’s (Ontario only) latest promo was for 6.00% on new deposits to an Earn More Savings Account between March 15 and June 30. But the promo was suddenly closed to new deposits on March 27. Needless to say, our forum users were not pleased!

Want some Coursera with your chequing account?

The Coast Capital Elevate Chequing Account is now nationally available (outside of Quebec), and for a limited time, new members can get $400 if they meet certain conditions. It comes with some familiar features for a premium chequing account, such as 50 free cheques per year and unlimited Interac e-Transfers. It also includes free access to Coursera for Business.

If you are 59 years of age or older, 25 years of age or younger, or maintain a minimum $4,000 daily balance, the Elevate Chequing Account’s monthly fee is reduced from $16.95 to $8.50. Those same conditions will get you a $0 monthly fee on the Unlimited Chequing Account, although no Coursera access, among other things.

The competitive end of Brim Financial Mastercards

Brim Financial Mastercards now charge a 1.5% foreign transaction fee, after previously being one of only two no-fee credit cards in Canada that don’t add markup on purchases made in foreign currencies. It also cut the rewards earn rate in half. Brim Financial appears to be focused on providing a credit card platform for other companies now, rather than issuing credit cards directly to consumers under its own brand.

The list of no-forex fee credit cards had already shrunk with RBC’s purchase of HSBC, and the subsequent retirement of the HSBC World Elite Mastercard. (Existing cardholders were transitioned to the RBC Avion Visa Infinite Card, with a grandfathered no-forex fee feature.)

For consideration: upstarts EQ Bank and Wealthsimple both offer prepaid cards without a foreign transaction fee. Their rewards structures aren’t as competitive as credit cards, but they have a slew of other features, and don’t have annual fees.

HISA, ISA, or HISA ETF?

The old reliable high interest savings account (HISA) has had some even higher-interest company for a while from investment savings accounts (ISA) and high interest savings account ETFs. CDIC coverage, trade settlement time, and ease of access are among the considerations of which type of account to choose. Our forum users have weighed in on these considerations and more in the search for a safe and high-yielding place to put savings to work.

High interest almost-chequing accounts

EQ Bank’s Personal Account is now offering 4.00% if you direct deposit your paycheque into the account (and 2.50% otherwise). This account is advertised as “being like a high interest chequing account”, although some forum users are not happy that it doesn’t offer cheques. Is it a chequing account, or close enough? Does it matter?

This is similar to Wealthsimple’s Cash account offer, which provides a 0.50% boost on a 4.00% base rate if you direct deposit your paycheque. Wealthsimple Cash is also advertised with “chequing account” wording, although it also does not provide cheques yet.

Whether you are willing to call these accounts chequing or not, they rank among the leaders on our savings account comparison chart.

Trending up and down at the same time

Every month, we get new reports of Tangerine Bank’s latest net new deposit promo for existing customers. It had topped out at between 5.50% and 6.00%. The latest round of offers starting at the beginning of March are for 4.75%. Some people received lower offers for 4.25% or 4.00%.

That lowest rate cannot beat Ontario-only Saven Financial’s regular savings account and TFSA interest rate of 4.20%. That’s up from 4.15%, and is the only rate change for any financial institution on our comparison chart in over 2 months, since… the last Saven Financial increase. It’s been “wait and see” mode for most savings account interest rates for quite a while now.