Wealthsimple launches Smart Savings Account | Wealthsimple | Discussion forum

Jon said
Another feature of this account is that it automatically split the money between different CDIC member to insure up to 900000 dollars.  

While that's a nice feature, it's important to point out that, even if this account is held beneficially in nominee form (like discount brokers) or WealthSimple custodies with EQ Bank separately (haven't looked into the logistics, that $900,000 figure you quote would only work if each joint member had separate WealthSimple RRSP/RRIFs, TFSAs, and non-registered investment accounts. Keep in mind, too, that this isn't for people looking to park money in cash long term. The portfolio management fee (~0.40%) would significantly erode returns. It's great for parking invested cash, though. 🙂

Cheers,
Doug

From Wealthsimple:

To protect your money with us, we split your deposits with other CDIC member institutions every $100,000 increment, up to $800,000. After your first $100,000, you'll see a weighted average that makes your varied interest rate. You'll see the exact interest rate in your Wealthsimple account.

Below are the interest rates for our CDIC member institutions we deposit with. Interest rates are subject to change at any time.

Member institution Current rate
Equitable Bank 1.70%
B2B Bank 1.15%
TD Investment Savings 1.10%
RBC Investment Savings 1.10%
Bank of Nova Scotia Investment Savings 1.10%
ADS Canadian Bank Investment Savings 1.10%
Renaissance High Interest Savings 1.10%
Altamira Cash Performer 1.10%

Last updated April 22, 2018. For the most up to date rates, contact our support team.

For clarification, your interest rate isn't tiered. If you have an account with $100,005, your first $100,000 will have the highest rate from the above list and the $5 will be on the second highest rate. Your exact interest will be weighted against your total account value and shown in your Wealthsimple account.

Right: Wealthsimple deals only in ETFs. Even the cash in Smart Savings account is held like an ETF – symbol EQB500 for deposits in Equitable Bank – price 1.00 CAD each, quantity 0.1 minimum. Any deposit [buy] or withdrawal [sell] activity initiated online takes 1-2 business days.

The web platform does not have the option of initiating an online transfer from Smart Savings to any other account [like Joint / RRSP / TFSA]. That can be done only by Wealthsimple Support. “Unfortunately internal transfer requests involving our Smart Savings accounts are not yet automated with our back office, and would require manual processing. While we can certainly still process internal transfers between accounts, it can take up to 10 business days to complete.“

Wealthsimple and its web platform is fantastic in all other respects.

First off I do pay for "The Globe and Mail" digital edition so I hope this is not an issue if I post a few small cut&pastes.

Wealthsimple registers new business names in bid to launch services including online chequing accounts.

Wealthsimple chief executive Michael Katchen confirmed a chequing account is “definitely” on the company’s “road map," but could not provide details of the exact timing of a product launch or what an account would offer clients. "We have been open about wanting to be our client’s primary financial relationship, and a cash account is certainly an important part of that,” Mr. Katchen said in an e-mail.

Wealthsimple Save, a high-interest savings account provider, was launched in partnership with Equitable Bank. As a result, the deposits are directly held by Equitable Bank, so Wealthsimple is not required to have a banking licence. Mr. Katchen would not comment on whether he would have a partner, such as Equitable Bank, hold assets for the chequing accounts.

For the entire article you need go here and need to be a paid member to read it all: https://www.theglobeandmail.com/business/article-wealthsimple-registers-new-business-names-in-bid-to-launch-services/

Are we talking about Wealthsimple Cash 2.4% ?

What's the difference between Wealthsimple Cash and Smart Savings?

[Addition] As per their FAQ(s), no CDIC coverage over the new product.

krwilson said
Yes  

Looks like it's the same thing with a different branding than Koho Save, with a prepaid credit card attached to it. It may even be partnering with Koho/Peoples Trust for the prepaid credit card.

As far as where the deposits are held, I suspect it varies, but is predominently held in Equitable Bank, possibly Equitable Trust, National Bank, and Scotiabank, which is consistent with Wealthsimple's Save program. If anyone has an account with them, they should be able to see who holds their deposits. By law, they have to tell us.

Nevertheless, as broker-held, nominee form account, its inclusion is, thus, ineligible for inclusion in the HISA. I would be fine with creating a profile page and forum, but we'd also have to create a profile page and forum for Koho Save as well.

Cheers,
Doug

Bud said
No suprise they're folding into another gimmick

"Subsidiary of Som Seif’s Purpose Financial buying Wealthsimple’s financial-adviser business"  

That is an interesting deal, but it's not related to Wealthsimple's other businesses. See Investment Executive story:

https://www.investmentexecutive.com/news/industry-news/purpose-advisor-solutions-acquires-wealthsimple-advisor-platform/

The short answer is: this is a complicated deal, especially to the layperson. At issue is Wealthsimple Invest, which is a robo-advisor service run through their portfolio management company Wealthsimple Inc. regulated directly by provincial securities regulators in each province. Wealthsimple Inc., in turn, uses the online platform of Wealthsimple Technologies, Inc. Wealthsimple for Advisors Inc. is the business being acquired; Wealthsimple for Advisors is an advice business that uses the Wealthsimple platform, also has licensed independent advisors to provide the advice (that is, independent financial advisors, not employees of Wealthsimple). Following close, Wealthsimple for Advisors will both, presumably, have a perpetual or long-term license to the Wealthsimple brand name, and license, separately, the technology platform of Wealthsimple Technologies, Inc.

Separately, Wealthsimple Technologies, Inc., which is the ultimate parent company, owns each of Canadian ShareOwner Investments, Inc., which custodies the Wealthsimple Invest accounts and those WfA independent financial advisor-managed accounts that choose to use them as the carrying broker. This may or may not continue for WfA post-close. It also custodies and acts as carrying broker for Wealthsimple Trade and Wealthsimple Save accounts. Again, this is unaffected by the sale.

Finally, Wealthsimple Technologies, Inc., separately owns SimpleTax Software, Inc., which it has said it plans to integrate into its online platform and continue as Wealthsimple Tax.

Cheers,
Doug

Norman1 said

Doug said

As far as where the deposits are held, I suspect it varies, but is predominently held in Equitable Bank, possibly Equitable Trust, National Bank, and Scotiabank, which is consistent with Wealthsimple's Save program. If anyone has an account with them, they should be able to see who holds their deposits. By law, they have to tell us.

…

I don't think the broker needs to disclose that. As far as the Wealthsimple Cash account holders are concerned, they have a cash balance in an account with investment broker Canadian ShareOwner Investments Inc. and the balance is eligible for coverage by CIPF.

In many cases, the brokerage account agreements will say that such cash balances are properly recorded, but are not segregated and may be used by the broker in the conduct of its business.

WealthSimple says that, behind the scenes, the cash will be deposited, in trust, with one or more domestically significant banks (DSIBS), in accounts that have no CDIC coverage.  

Do you feel confident, Norman, that if you had 1 million deposited in your SimpleWealth Cash account, and the Schedule 1 bank holding the money, eg. Bridgewater bank, went bankrupt, that you would be fully protected by CIPF?