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Twice in two weeks, Ideal Savings increased its TFSA interest rate, settling on a chart-topping 3.60%, although its regular savings account interest rate is stuck in the year 2020, refusing to budge at 1.01%.

Many financial institutions have made some modest savings account interest rate increases, albeit less than the Bank of Canada’s 0.25% key interest rate hike in January. Five of the financial institutions we track now offer a 3.40% savings account, bested only by Outlook Financial at 3.50% and Ontario-only Saven Financial at 3.75%.

The Bank of Canada said it’s going to pause and assess whether further rate hikes are warranted. Canada added 10 times more jobs in January than economists expected. Whether we have a robust economy, a looming recession, disinflation, or all of the above, we’re back to “high interest savings” in the absolute sense.

Brokerage investment savings accounts continue their surprising ascension, with most rates above 4.00%.

And savings account promotions are still hot, with some recent offers including:

• Tangerine is offering a targeted 5-month new deposit promo for existing customers: 5.00% between February 2, 2023 and June 30, 2023 or 5.00% for new customers
• Simplii Financial new customer promo: 5.25% in a savings account until April 30, 2023
• DUCA Credit Union (Ontario only): 4.75% on new deposits to an Earn More Park Account until April 30, 2023

The highest GIC rate is 5.40% for a 2-year GIC

GIC rate inversion is the current trend, where shorter-term rates generally beat longer-term rates. The highest nationally available rate is actually Peoples Trust’s 5.40% 2-year GIC, while Wealth One Bank of Canada has a 5.28% 1-year GIC. At the moment, the top 5-year GIC rates hover around 5.00%, even at a GIC broker.

GIC rate inversion

GICs were one of the hottest personal finance topics in 2022, and for good reason. You can get at least 5.00% somewhere on any term from 1 through 5 years. Most recently, some GIC rates have been inching down; one exception is Peoples Trust, which increased its 2-year GIC rate to 5.30% alongside some decreases.

Historically, longer term GIC rates are higher than shorter term GIC rates. But several financial institutions currently offer higher GIC rates for shorter terms than for longer terms.

GIC broker rates continue to offer meaningfully higher rates, with the ones we track offering 5.50% or slightly more for 1- through 5-year terms. For those who are new to the topic, here’s a forum member’s explanation on whether there’s a catch with GIC brokers.

RRSP and TFSA deals

RRSP season is heating up, and Canadian adults got an additional $6,500 of TFSA contribution room on January 1, 2023. Cue the RRSP and TFSA deals. One is at Manulife Bank, where you can get 4.50% in a new RRSP or TFSA savings account until April 28, 2023. Tangerine Bank’s newest targeted 5-month new deposit promo for existing customers is 5.00% between January 10, 2023 and May 31, 2023, and includes registered accounts. As always, we’ll post all promos on our website as we find them.

Remember to consider what the rate will be when a promo ends, as well as potential transfer out fees.

EQ Bank and more in the news

• Oaken Financial has the highest nationally available savings account interest rate at 3.40% on our comparison chart, followed by 6 other financial institutions at 3.25%. Saven Financial still tops the list for Ontario at 3.75%. Neither Oaken Financial nor Saven Financial offer savings accounts in an RRSP or TFSA, though.
• Have you had a duplicate transaction problem at Oaken Financial recently? You are not alone!
• Forum member Norman1 has been regularly updating a brokerage investment savings account comparison table, where rates are higher than regular savings accounts
• EQ Bank has been very busy lately: launching in Quebec; releasing a prepaid Mastercard with no-forex fees, 0.5% cash back, and interest on the loaded balance; and publicly advocating for increasing the CDIC limit to $200,000 per account

The Bank of Canada made its final key interest rate decision of 2022, which was a 50 basis points increase. 2022 has been the year of inflation and rising interest rates. Rewind back to the beginning of 2022:

• The Bank of Canada hadn’t started raising rates yet
• Wyth Financial had the highest savings account interest rate on our comparison chart at 1.55%
• Hubert Financial had the top 1-year GIC on our GIC comparison chart at 2.00%, and the top 5-year GIC at 3.00%
• The topic of brokerage investment savings accounts was barely discussed
• We were discussing short-term promos hovering around 2.00%

In the present day:

• The Bank of Canada has raised interest rates by a total of 4.00% (or 400 basis points) this year
• Wyth Financial is closing
• Oaken Financial has the top nationally-available savings account interest rate at 3.40%
• Oaken Financial has the top nationally-available 1-year GIC on our GIC comparison chart at 5.25%, and motusbank has the top 5-year GIC at 5.20%
• Brokerage investment savings accounts are a hot topic of discussion with one offering a rate above 4.00%
• Some savings account promos offer 5.00%

The year is not quite done, and we’re likely to see more savings account increases (with the most recent changes at Canadian Tire Bank from 2.40% to 3.00%, Achieva Financial from 2.95% to 3.25%, and EQ Bank’s TFSA from 2.50% to 3.00%). GIC rates will also fluctuate, although potentially in the other direction, as EQ Bank and Motive Financial have recently decreased some of their GIC rates.

Acquisition news

Non-inflation / non-rate news has been trying to grab headlines recently:

• Smith Financial to acquire Home Capital Group, owners of Oaken Financial
• RBC is buying HSBC Canada

TFSA reminders

Lastly, the additional TFSA contribution room coming in 2023 is $6,500. If you have existing TFSA funds that you would like to transfer to another financial institution, consider withdrawing it before the end of December and then re-contributing it in January in order to avoid direct TFSA-to-TFSA transfer fees and administration work.

All rates trending to 5.00%

After what seemed like a brief slowdown or pause, GIC rates have been increasing again, especially for shorter terms. One month ago, Resurrection Credit Union’s (Ontario only) 5.00% 1-year GIC rate stood out. Now, the 1-year GIC rate leader on our GIC comparison chart is Peoples Trust at 5.20%, and it’s one of a few financial institutions with 1-year rates higher than their 5-year rates. EQ Bank, Oaken Financial, and Wealth One Bank of Canada all have 1- through 5-year GIC rates of at least 5.00%.

Half of the savings accounts on our comparison chart sport a 3.00% interest rate or higher, with Ontario-only Saven Financial leading at 3.75%, followed by nationally-available Oaken Financial at 3.40%. The next key interest rate decision from the Bank of Canada is scheduled for December 7.

You can get up to 3.80% in an Investment Savings Account through your brokerage. Interest rates in such accounts usually lag traditional savings account quite significantly, but have been trending upward.

What’s more, you can get interest rates that almost rival GIC rates via at least a few savings account promotions, including:

• HSBC 4.40% (on less than $25,000) or 4.90% (on $25,000 or more) new deposit promo for new and existing customers in a High Rate Savings Account between October 17, 2022 and January 27, 2023
• Tangerine targeted 5-month new deposit promo for existing customers: 4.75% between November 1, 2022 and March 31, 2023
• Tangerine new customer promo: 4.50% for the first 5 months in a savings account if you also open a chequing account
• Simplii Financial new customer promo: 5.00% in a savings account until January 31, 2023
• Vancity (BC only) 4.50% new deposit promo for new and existing customers in a Jumpstart High Interest Savings account until February 28, 2023

TFSA contribution limit increasing to $6,500?

The TFSA contribution limit for 2023 is all but guaranteed to be $6,500, which would be up from $6,000 in 2022. This increase is thanks to inflation, as the TFSA contribution limit is indexed to inflation and rounded to the nearest $500 increment.

Bye bye Wyth Financial

Just over a year ago, Concentra Bank renamed itself to Wyth Financial and made its savings account generally available. Now that Equitable Bank has completed its acquisition of Concentra Bank, Wyth Financial is being retired. No new Wyth Financial accounts can be opened, existing savings accounts will be closed, and GIC accounts will be serviced until they mature. On the Wyth Financial website, new customers are being directed to explore EQ Bank.

Credit card news

The STACK Prepaid Mastercard’s recent changes are not good: first, it reinstated its previously waived foreign currency exchange fee, and now it will start charging a monthly fee if you don’t spend at least $350 per month.

We’ve published a new comparison of some promising small business card solutions: Float and Caary. They both allow you to create employee cards with no annual fee, but there are quite a few meaningful differences between them.

Continuing a recent trend, there has been very little action in GIC rates. One of the exceptions is Wealth One Bank of Canada, with some standout rates until October 30: 1-year at 4.68%, 2-year at 4.88%, 3-year at 5.08%, 4-year at 5.08%, and 5-year at 5.18%. Its 1-year GIC rate of 4.68% trails Peoples Trust (at 4.80%) as well as Oaken Financial and Tangerine Bank (both at 4.70%), but the rest of its rates top our GIC comparison chart.

Savings account interest rates have still been increasing, but slower than previously. Since the Bank of Canada’s September 7th key interest rate hike of 75 basis points, only about half of the financial institutions on our savings account comparison chart have increased their savings account interest rates. The average increase is 33 basis points, or 44% of Bank of Canada’s increase. This is a far cry from what happened in the month following the Bank of Canada’s 100 basis points rate hike on July 13th, where the vast majority of savings accounts that we track went up, and by an average 61 basis points increase, or 61% of the Bank of Canada’s increase.

There are now 4 savings accounts offering at least 3.00%, and 3 of them are nationally available at Motive Financial, Oaken Financial, and Wealth One Bank of Canada.

Here is a list of new deposit promos to consider this fall:

• RBC new customers: 4.00% for 3 months in your first RBC High Interest eSavings account if opened before December 15, 2022
• National Bank: 4.25% on new deposits to a High Interest Savings Account for new and existing customers between September 15 and December 13, 2022
• Tangerine Bank’s latest targeted new deposit promo for existing customers is 4.30%, although for 3 months (previous such promos were for 5 months)

Mergers, credit card surcharges, and more deals

• Carpathia Credit Union (parent of Ideal Savings) is in talks to merge with Access Credit Union? Access Credit Union (the parent of AcceleRate Financial) recently merged with Noventis Credit Union and Sunova Credit Union (the parent of Hubert Financial).
• Canadian businesses can now add a surcharge if you use your credit card. But will they?
• Visit our cash back site and get $225 back for successfully signing up for the Scotiabank Momentum Visa Infinite Card, Scotiabank Gold American Express Card, or Scotiabank Passport Visa Infinite Card