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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.

Interest rates are in a holding pattern, as the central bank assesses how the dramatic run-up in rates from the past two years will affect inflation and the economy. When will rates start to drop again? The Bank of Canada kept the key interest rate the same on January 24, and said they expect inflation to remain around 3% for the first half of the year. The consensus is that it will take until the second half of 2024 before we see some rate cuts.

Big variations in savings account and GIC rates

There have been no savings account interest rate changes, up or down, on our comparison chart over the past month. We did see the long-awaited launch of Oaken Financial’s TFSA, although its 3.40% rate lags behind leaders such as Ontario-only Saven Financial (4.15%), Motive Financial (4.10%), and Wealth One Bank of Canada (4.00%).

The best promo rate is currently at Simplii Financial, where you can get 6.00% for 5 months if you are a new customer. There is a decent number of other promos for registered and non-registered accounts on our promos page.

GIC rates remain inverted (with shorter terms offering higher rates) and mostly unchanged, although there have been some minor increases in rates. For a moment, Peoples Trusts’ 15-month GIC was the highest GIC rate we track at 5.60%, although that has now dropped to 5.20%. You can still get up to 5.50% on a 1-year GIC (at Hubert Financial or Ideal Savings).

There is quite a variation in GIC rates offered. Tangerine Bank, which had made a bid to be competitive last year, is now an outlier at the bottom of non-registered GIC rates with a 5-year GIC of 3.35%, well below the top 5-year rate of 4.75% (at Hubert Financial and Ideal Savings) or even 5.00% at a GIC broker. To be fair, Tangerine’s registered GIC rates are meaningfully higher than its non-registered rates.

Cash back offers

We have some increased cash back offers this month:

• Neo Financial High-Interest Savings: $40 via Interac e-Transfer or $45 Amazon.ca gift card
• Tangerine: $150 via Interac e-Transfer or a $150 Amazon.ca gift card for opening a Money-Back Credit Card
• Scotiabank: $140 via Interac e-Transfer or a $150 Amazon.ca gift card for opening a Passport Visa Infinite credit card

Rewind to January 2023: the headline inflation number in Canada was 6.3% (from December 2022). The highest savings account interest rates on our comparison chart were Ontario-only Saven Financial at 3.75%, Oaken Financial at 3.40%, and Outlook Financial at 3.35%.

Today, Ontario-only Saven Financial leads the pack at 4.15%, followed by Motive Financial at 4.10%, and a trio of options at 4.00%: Neo Financial, Wealth One Bank of Canada, and Wealthsimple. You can even get 4.00% at EQ Bank if you set up direct deposit, or up to 4.75% in a brokerage investment savings account. Savings account interest rates increased modestly in 2023, but the year-over-year inflation number from December 2023 was 3.40%; thus your humble savings account can currently beat inflation! How’s that for some good news to start off 2024?

The beginning of the year signals TFSA and RRSP season, including another $7,000 of TFSA contribution room. If you’re looking for a short-term strategy, check our promotions page, with new promos this month for as high as 5.75%.

GIC rates have peaked; how will 2024 go?

GIC rates appear to have peaked in November and December. More than half of the financial institutions we track decreased their GIC rates in the first two weeks of January. Furthermore, the Bank of Canada governor says that the key interest rate will decrease at some point in 2024.

Shorter-term GICs are still offering better rates than longer-term GICs. 8 financial institutions on our GIC comparison chart will give you at least 5.40% on a 1-year term right now, whereas last year, the 1-year leader was a single financial institution at 5.30%. The 4-year and 5-year GIC rates are lagging behind, but you can still get 5.00% at Wealth One Bank of Canada, and slightly higher if you use a GIC broker.