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A big bank is a GIC rate leader

CIBC currently has a 3.25% 5-year GIC, which applies to a non-registered, TFSA, or RRSP GIC. That beats the best 5-year rate on our GIC comparison chart (3.00% at Hubert Financial) and it’s unusual for a big bank to be a rate leader.

Despite this market-leading rate, some of our forum members are being cautious. Are other banks (big banks or not) going to match the rate? And with the Bank of Canada’s key interest rate expected to increase this year, will there be further GIC rate increases? Or should you just stick to a GIC laddering strategy?

Wyth Financial takes the outright lead for a savings account interest rate

It’s the new kids on the block Wyth Financial (1.55%), Ontario-only Saven Financial (1.50%), and Neo Financial (1.30%) leading our high interest savings comparison chart to start 2022. Rate leaders at the beginning of each of the previous 5 years were Canadian Tire Bank (in 2021), Motive Financial (in 2020 and 2019), and EQ Bank (in 2018 and 2017).

After launching in November with a 1.40% rate, Wyth Financial increased its savings account interest rate to 1.55% in mid-December.

None of Wyth Financial, Saven Financial, and Neo Financial offer a TFSA, though. Wealth One Bank of Canada continues to have the highest non-promotional TFSA interest rate on our chart at 1.50%, followed by a 4-way tie at 1.25%.

What’s your TFSA plan?

Are you going to max out your $6,000 in additional TFSA contribution room this year? If so, that would put you in a small minority of Canadians.

For those who have a TFSA at all (of any size), are you aware that you can use it for more than a savings account? According to a 2020 BMO study, 41 per cent of those with a TFSA use it for mutual funds or stocks. Almost a quarter of respondents were unsure of what could go in a TFSA.

What are your TFSA plans for 2022? Take our short TFSA survey for a chance to win one of 6 x $50 cash prizes!

If you’re going to choose to put some or all of your TFSA funds in a savings account or GIC, be sure to check out our promotions page, which currently includes the following:

• Tangerine Bank: 2.15% for a 3-year registered (TFSA/RRSP/RRIF) GIC
• EQ Bank: 2.00% for a 3-month TFSA or RRSP GIC until January 20, 2022
• motusbank: 2.25% for 122 days in your first TFSA savings account

Featured cash back offers

• HSBC World Elite Mastercard: up to 100,000 bonus points, no annual fee for the first year, no foreign currency exchange fee, plus $105 cash back
• Tangerine Money-Back Credit Card: Earn an extra 15% back (up to $150) when you spend up to $1,000 in everyday purchases within your first 2 months, plus $45 cash back or a $50 Amazon.ca gift card
• Scotiabank SCENE Visa Card: no annual fee, plus $50 cash back

Wyth Financial is here with a top rate outside of Ontario

Wyth Financial’s high interest savings account is open to the public now (except for Quebec, unfortunately) with a 1.40% interest rate. Wyth Financial is the new brand name for Concentra Bank, and its savings account was previously available only to those who held its GICs.

A natural comparison is to Neo Financial, whose Neo Savings account is provided by Concentra Bank. (In fact, if you have both Wyth Financial and Neo Financial savings accounts, your deposits are combined when calculating CDIC coverage limits.) The Neo Savings account has a 1.30% interest rate, so it’s not as appealing as a pure savings account. However, Wyth Financial has a few limitations indicative of a pure savings account: only one free e-Transfer per month (versus unlimited at Neo Financial) and no bill payments (whereas Neo Financial has bill payments). Lastly, Wyth Financial also offers mortgages and GICs, which Neo Financial does not.

More increases for savings account interest rates

Amidst a trend of general rate increases, last month Outlook Financial decreased its regular savings account and TFSA interest rate from 1.10% to 1.00%. However, we also saw Oaken Financial increase its regular savings account interest rate from 1.20% to 1.25% (after increasing it from 1.15% to 1.20% just a couple of weeks earlier). As well, Saven Financial (Ontario only) increased its regular savings account interest rate from 1.35% to 1.50%, putting it on the top of our comparison chart for those who are in Ontario.

Up to a 3.00% rate in promos

Tandia Credit Union (Ontario only) has a standout new deposit promo, although it expires on Friday, December 17: 3.00% in a savings account until March 31, 2022.

Our promotions page lists plenty of other offers, including these newest ones:

• BMO targeted offer for existing clients: 1.75% on new deposits in a Smart Saver Account between November 15, 2021 and March 15, 2022
• CIBC: 1.50% interest rate for 120 days when you open your first eAdvantage Savings Account
• Tangerine Bank targeted 2.00% new deposit promo for existing customers until April 30, 2022

GIC rates moving up

GIC rates are on the rise at many of the financial institutions on our GIC comparison chart. In particular, GIC rates at EQ Bank, Motive Financial, Oaken Financial, Wealth One Bank of Canada, and Wyth Financial have all shot up such that some combination of them share the lead for 1- through 5-year GICs:

• 1.80% for a 1-year GIC
• 2.05% for a 2-year GIC
• 2.30% for a 3-year GIC
• 2.40% for a 4-year GIC
• 2.60% for a 5-year GIC

We’re also tracking GIC broker rates at the bottom of our GIC comparison chart where you can get even better rates for 2- through 5-year GICs.

More headlines: TFSA contribution limit, Costco Mastercard, USD accounts at Wealthsimple

• The TFSA contribution limit for 2022 remains at $6,000
• The CIBC Costco Mastercard transition from the Capital One Costco Mastercard includes a 1% cash back base rate on all purchases instead of 0.5%, but fewer insurance benefits than before
• Wealthsimple to offer USD accounts, although with a $10 per month Plus subscription
• New to our cash back site is the HSBC World Elite Mastercard: up to 100,000 bonus points, no annual fee for the first year, no foreign currency exchange fee, and $105 cash back

TFSA promos are coming

With the end of the year approaching, expect TFSA promotions to show up such as this new one from motusbank: 2.25% for 122 days on your first TFSA savings account. You might want to have a plan for what you will do with the funds after the promo rate expires early in 2022. Check the non-promo TFSA rate: motusbank’s regular TFSA interest rate is currently 1.25%, which is quite competitive, ranking second on our comparison chart. And check whether there is a transfer out fee, in case you want to transfer TFSA funds mid-year (rather than executing the “December manoeuvre”): motusbank has a $50 fee for transferring money out of registered accounts.

We’ll be sure to track all TFSA promos on our promotions page.

Rate increases are also coming?

Last month, we noted that the couple of rare increases in savings account interest rates this year had since been reversed. However, 3 subsequent rate increases have occurred: for the Hubert Financial TFSA (from 1.00% to 1.10%), the Oaken Financial regular savings account (from 1.15% to 1.20%), and the motusbank TFSA (from 1.10% to 1.25%).

With inflation at a multi-decade high, and the Bank of Canada signalling that the key interest rate will rise some time between April and September 2022, we might see more upward movement on savings account interest rates.

More to compare with GICs

Per multiple reader requests, new to our GIC comparison chart is a table for GIC broker rates! Although there might be minimum deposit amounts and location-specific eligibility for some GIC broker rates, at the moment they handily beat all of the 1-year through 5-year GIC rates for the financial institutions we track.

Simplii Financial enters the USD account market

Simplii Financial has launched a USD account. It offers only a 0.10% interest rate, but it has a competitive exchange rate that could save you money if you’re transferring from Canadian dollars and not using a separate foreign exchange service (such as OFX).

Regarding the interest rate, you would still be better off with EQ Bank’s USD account (1.00%) or one of Tangerine Bank’s new customer (2.00%) or targeted existing customer (1.60%) promos.

When will rates bottom?

This year, almost every rate change on our savings account comparison chart has been a decrease. The only rate increases in 2021 occurred in June and July at Implicity Financial and Hubert Financial. Since then, both of those financial institutions have decreased their rates, with Hubert Financial most recently decreasing its regular savings account interest rate from 1.25% to 1.10%.

Last week, Motive Financial decreased its regular savings account and TFSA interest rate from 1.25% to 1.10%, and AcceleRate Financial did the same, from 1.20% to 1.15%.

Coming soon: Concentra Bank rebrands as Wyth Financial

Wyth Financial, the new brand name for Concentra Bank, is set to launch its new online banking portal on October 25. Will we finally see the general availability of its 1.35% savings account, which is currently only available to GIC holders? And how will it compare to Neo Financial’s savings account, which is also powered by Concentra Bank / Wyth Financial, and whose CDIC coverage limit is shared with other Wyth Financial accounts?

Zero-fee online brokerage commissions: who’s next?

If you blinked, you might have missed Desjardins becoming the third online brokerage to cut its commissions rate to zero, following National Bank and Wealthsimple’s lead. Will we see similar offerings from the big banks any time soon?

The latest promos

Our promotions page includes a new savings account promo from HSBC: 1.75% on new deposits in a savings account between September 13 and December 16. It also features a GIC promo that expires next week at Wealth One Bank of Canada: 2.88% for a 5-year GIC if you use promo code GIC5Y before October 20.

Did your spouse or someone else in your household get a Tangerine new deposit promo but you didn’t? You might be able to get a matching promo if you ask.

Cash back offers

• The National Bank World Elite, World, and Platinum Mastercards have 15,000 point sign-up bonuses, no annual fee for the first year, plus $60 cash back (or $65 via Amazon.ca gift card)
• Tangerine’s credit cards now earn 15% on purchases in the first two months, plus $100 cash back (or $105 via Amazon.ca gift card)
• The Scotiabank Ultimate Package has a $350 welcome bonus, plus $45 cash back (or $50 via Amazon.ca gift card)

The top GIC rate changes more frequently than you might think

Canadian Tire Bank currently tops our GIC comparison chart for the 5-year rate at 2.23%.

Did you know? Canadian Tire Bank has changed its 5-year GIC rate a total of 54 times over the past year; that’s on average more than once per week. No other financial institution comes close to that sort of frequency. In fact, the average financial institution on our chart changes its 5-year rate less than 3 times per year. Don’t be surprised if, by the time you’ve transferred your money over, Canadian Tire Bank has already changed its 5-year GIC rate (for better or for worse)!

Its 1- through 4-year GIC rates are far from competitive, though. Oaken Financial has the top 4-year rate at 2.00%, EQ Bank has the top 3-year and 2-year rates at 1.80% and 1.60%, and Peoples Trust and Achieva Financial share the top 1-year rate at 1.45%.

Do you use a GIC broker?

GIC brokers can often beat the best rates on our chart. The broker rates might come with additional stipulations, such as a higher minimum deposit. But, GIC rates are by nature guaranteed for the term, so it might be more worth it to rate chase with GICs than with savings accounts. Join the discussion if you are interested in having the High Interest Savings website track broker rates more officially!

Savings accounts rates aren’t a-changin’

There hasn’t been much change on our savings account comparison chart. Alterna Bank decreased its regular savings account and TFSA interest rate from 1.00% to 0.90%, making it the first rate on our chart to drop below 1.00%.

Last week, The Bank of Canada decided to keep its key interest rate unchanged, and doesn’t expect to increase it before the second half of 2022.

Promos and more news

• National Bank cuts its online trading commission fees to zero
• Concentra Bank is rebranding to Wyth Financial
• CIBC to take over Costco Mastercards from Capital One early next year
• Discussion thread: Why keep so much in a savings account?
• Our promotions page features savings and chequing account promos from DUCA Credit Union, Tangerine Bank, Scotiabank, Coast Capital, and more, including a 2.00% targeted existing customer promo and a 2.20% new customer promo at Simplii Financial
• Neo Financial is offering a $25 bonus on credit card sign-up
• Tangerine’s Money-Back Credit Card and World Mastercard: Earn an extra 10% back (up to $100) when you spend up to $1,000 in everyday purchases within your first 2 months