Considering EQ | EQ Bank | Discussion forum

Use EQ as a place to park money and pay bills electronically. Setting joint account is extremely easy.

For (almost) everything else, use your "other" bank, don't close account there. Link it with EQ for large money transfers, use Interac for small money transfers between your accounts.

For me, it is a combination of EQ for what I said above plus Tangerine for "everything else." Works for me. Just EQ wouldn't.

As I understand CDIC rules, the joint account option allows a couple to park $300K (if they have it of course 🙂 ) and be CDIC insured.

You would have $100K CDIC insurance in accounts held by (H), (W), and (H+W). If stinkin' rich 😉 could also have joint accounts for (H+F), (H+M), (W+F), and (W+M) each insured for $100K. I hope the initials are fairly self-explanatory.

It's nice to dream.

I agree it is inevitable.

Rick said

Still......long drop to the bottom of the HISA chart. Nice to have in your back pocket to cover a base if needed. It's all set up. won't close it and actually using it a bit.  

And I wouldn't close it either, because you might have a hard time re-opening it if you ever wanted to. Unless things have changed recently, EQ Bank has always warned that closing your account would permanently "terminate your relationship" with them.

I've always thought it was kind of strange for a bank to have a scorched earth policy when it comes to customers, but there it is. Could just be a systems design flaw, I don't know, but you'd think that was a fixable problem if they actually wanted to fix it

This describes CDIC coverage, the site has other good info too: https://www.cdic.ca/your-coverage/how-deposit-insurance-works/

Bottom line, all your accounts at EQ are insured for a total of $100K. How do people get around that? Until recently, you couldn't at EQ. But some ways at other institutions (#1 is available at EQ now):

1. Open a joint account with someone else, that account will also be covered for $100K.
2. TFSA/RSP are covered separately (but EQ doesn't offer).
3. Some (e.g. Oaken, Peoples Group) have created 2 banks under one umbrella, technically separate institutions for CDIC purposes.

I wouldn't be too worried about having $100K at EQ, it's insured, though it could be inconvenient if you need the money at that time.

For joint accounts and T5, I believe in practice you can distribute the tax burden any way you want between the holders, as long as it adds up to 100% of the interest being taxed. 😉

Technically I think you're supposed to declare the interest in ratio to who put in the money, which works for you in this case but might not be true if the holders are at arms' length (e.g. you and your neighbour kick in money save up and buy a fence, you might pay a little more attention to who's declaring the interest).

Let's say we live in an alternate universe where they actually pay attention to distribution of the interest and audit you. If you open a joint account with your mother (don't even have to tell her the password :), and you put in $100K, by law you should be declaring 100% of the interest. The only way I could see you having trouble would be if your hypothetical mother-as-joint-account-holder pays 0% tax, you're in top bracket, and you try to declare the $2000 interest on her T1. That might not stand up to audit if you couldn't show where she got the $100K to put in the account, but again this is an extreme example and hypothetical at that (that's all just my layman's understanding -- I am not an accountant or tax lawyer).

I would not be comfortable going over CDIC limit without good reason. For example, I have a 2.8% offer with Simplii (ends Aug 30) so if I had >$100K I'd be tempted to put some of it into Simplii at 2.8% (uninsured past $100K) rather than EQ at 2.0% (insured). But I probably wouldn't because I'm cautious. 🙂 Even more now than in normal times, but even in normal times.

In your example, where you're only talking about 2.0% at EQ, I'd open an account at Motive for 2.05% (but perhaps less convenient, so park the extra there), or Peoples Trust/Bank for 1.8%. [I just looked and see Motive is now 1.75% so forget that, but point is I'd work my way down the list.] Including a Joint account, EQ will cover $200K, PT/PB will cover $400K, and so on.

Though I'm never quite clear on the joint rules for CDIC, I know a married couple could cover (H), (W), and (H+W) each for $100K, but would (H+M) also be covered for $100K or is it "I'm covered for all my joint accounts"? I think the former but don't really have to worry about it. Wish I had that problem. Wish we all had that problem. 😉

If A&B have a joint account, and A&C have a joint account, A has separate CDIC coverage for each account, i.e. could have $100K in each.

T5s are issued with the SIN of the primary account holder, far as I know. If that person declares the interest CRA will never question it, their matching program is happy, even if the secondary owner of the account put all the money in and technically should be reporting the interest income. Though I have, sometimes, split it up and put in a note to CRA, with each return, explaining what's going on and why we're reporting it this way and they've never questioned that either. But I do have a sterling reputation (throughout our entire society) for honesty so maybe that's why CRA hasn't followed up.

Thanks, that's a good strategy for when I need to move my billions back onshore. 😉

But seriously thanks for clarifying CDIC rules, that's what I thought.

And I guess they do put only one SIN on a T5, though they have both names (don't think I've seen a T5 for an account with >2 names, though I've seen statements with 4 names). I guess if the primary doesn't declare 100% they check the other holders. I can't imagine it mattering except in an extreme case like my hypothetical above.

With millions you need to be careful with who you open joint accounts with. Didn't hockey player Jack Johnson lose his millions to his parents? Honesty declines as amounts get bigger and temptation approaches a tipping point, seems to me.