Yield is hard to find these days. Bond yields are at historic lows. And savings accounts and GICs at the big banks pay next to nothing. Your cash can work a lot harder at EQ Bank.
The top line – what is EQ Bank?
EQ Bank is a digital-bank owned by Equitable Bank, Canada’s 9th largest Schedule 1 bank.
Equitable Bank introduced EQ Bank, its digital-arm at the beginning of 2016. Today, EQ Bank has over 125,000 customers and $4B in deposits.
There are two product offerings: The High-Interest Savings Plus Account and GICs (Guaranteed Income Certificates). And because a picture is worth a thousand words, here’s the outline of the benefits for the Savings Plus Account in one graphic.
Yes, it’s nice to see these words repeated often: Free, Free, Free and Cheap and Zero Minimums and High Interest. And of course the word ‘everyday’ means that these are not teaser rates. The big banks will do that. Here’s 2%, until next Wednesday and then we’ll get back to paying ya .05%. Thanks for coming out.
The current rate for their Savings Plus Account is 2.50%*. And once again, check out that graphic and you’ll see that there is no minimum.
The maximum amount you are able to hold in a EQ Bank high interest savings account is $200,000.
Add in a better batch of GICs.
Here are the current GIC rates as of May, 2022 …
|GIC term||Interest rate|
|6 years **||4.05%|
|7 years **||4.05%|
|10 years **||4.05%|
** GICs with a term greater than 5 years are not insured by CDIC until April 30, 2020.
There is a maximum 20 GICs per customer. There is an aggregate GIC investment limit of $500,000.
It’s important to note that EQ Bank’s GICs are non-redeemable, which means you’ll pay a penalty if you cash them out early.
RRSP and TFSA accounts – 2.50%
On November 27, 2020 EQ Bank introduced the more than welcome high interest RRSP and TFSA accounts. The high interest savings account rate for both account types is 1.50%. These accounts also have no minimum and zero fees.
From the EQ blog – Decisions, decisions: TFSA or RRSP?
Here are the generous GIC rates for the RRSP and TFSA accounts.
|GIC term||Interest rate|
|6 years **||4.70%|
|7 years **||4.70%|
|10 years **||4.70%|
You can also hold a U.S. dollar account with EQ Bank. Of course, there are no fees and you’ll earn 2.00% on your U.S. dollars.
You can handle it all on your device.
And as a digital bank, they make it easy to use on your mobile device.
Yup, it’s that simple. It’s easy to make your cash work harder.
Accounts are eligible for Canada Deposit Insurance Corporation (CDIC) insurance. CDIC insurance covers $100,000 per account type.
Here’s how CDIC works …
The work in progress file.
- There are no chequing or debit card options with EQ Bank, so you’ll need to maintain a chequing account with a traditional bricks-and-mortar bank
- With the Saving Plus Account, the most you can hold is $200,000 per customer
How it works – online of course.
After you open an account with EQ Bank, you set up a link to a conventional bank account that you already hold and use Interac e-Transfer® or an Electronic Funds Transfer to deposit money from that linked account into your EQ Bank high-interest savings account. You can also deposit cheques directly into your EQ Bank account using their mobile app.
And of course you can also transfer money from your EQ Bank to your linked account.
Here’s that free work again – there are no fees for any of these transactions.
Track your goals, reach your goals.
Additionally, you can set and track the progress of up to four goals with their online tool.
EQ Bank offers joint accounts
This just in! You can open Joint Savings Accounts. You can add up to three people to one account.
EQ Bank Savings Plus Account checklist.
- Cost of everyday transactions: Free
- Minimum balance: None
- Number of transactions allowed: Unlimited
- Unlimited bill payments: Free
- Cost to send and receive money via Interac e-Transfer® or Electronic Funds Transfer: None
- Access to inexpensive international money transfers: Yes
- Mobile app: Yes
- Savings goal tool: Yes, you can track up to four savings goals
- Direct deposit allowed: Yes
- Cheque deposits: Yes
EQ Bank’s money transfers.
For international money transfers EQ Bank has partnered with TransferWise, a third-party money transfer platform. Everything is integrated, so you can easily create a TransferWise account through your EQ Bank online banking account or mobile app, but you’ll first need to have that Savings Plus Account.
You can send a maximum of $9,500 (CAD) per transaction every 24 hours, to your choice of 70 countries and regions in 32 currencies.
How to start saving making your cash work harder.
Opening a Savings Plus Account at EQ Bank is fairly simple; however, in order to sign up, you need to be a Canadian resident, be of the age of majority where you live, and have a Social Insurance Number (SIN). Unfortunately, Quebec residents aren’t able to bank with EQ Bank.
In addition, the account you plan to link to your EQ Bank account must be with an approved financial institution. Those include the Big Six Canadian banks, as well as several others, such as Tangerine, Laurentian and Vancity Credit Union. A full list of approved banks is available in the FAQ section of the EQ Bank site.
How to sign up with EQ Bank.
Step 1 – visit their website. Have your (SIN) Social Insurance Number handy, you’ll need it.
To verify your identity, they will perform a soft credit check, which will not affect your credit rating. If they’re not able to confirm your identity that way, you’ll need to visit a Canada Post outlet.
Once everything is set up, you will simply connect your current bank account to EQ Bank to verify your identity and enable money transfers. Your other account’s banking details are not shared with anyone, including EQ Bank.
If you qualify for a soft credit cheque your account will likely be set up and ready to go almost immediately.
Cash can be King.
Of course the main benefit is that cash is risk-free when covered by CDIC insurance. But keep in mind that inflation is a risk and that you could lose spending power over time. The best use of cash is for that all-important emergency fund and for those short term savings goals. That said cash can be an important component of your total long term investment mix.
Please have a read of the personal finance basics.
For greater growth options for the longer term you might check out some lower fee options such as the Canadian Robo Advisors. And of course many will self direct and create their own ETF Portfolio or use an all-in-one asset allocation ETF.
For ETF options you can open a discount brokerage account with Questrade, Canada’s top-ranked discount brokerage according to MoneySense.
That said, many do not have the risk tolerance required to invest in stocks and bonds. Cash it is. And it’s important to make that money work as hard as possible. EQ bank might be the best option in Canada.
We are using EQ Bank and it has been a very good experience.
You can also open an RRSP and TFSA account through that link, once you have signed up. It is a very simple and easy onboarding process.
While I do not accept monies for feature blogs please click here on the mission and ‘how I might get paid’ disclosures. Those affiliate partnerships help me pay the bills for this site, and keep it free of ads.
Thanks for reading.
*Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.