The Bank of Canada has begun the long, slow process of raising interest rates. While banks are fairly quick to also increase the interest rates they charge customers on lines of credit and some types of mortgages, they are slower in raising the interest rates they pay you for depositing your cash with them. Still, I’ve seen the amount I get paid each month increasing on some accounts even though I haven’t increased the amount on deposit, so I decided to quickly check what interest rate I’m earning for my cash and GICs at BMO InvestorLine, CIBC Investor’s Edge, RBC Direct Investing, Tangerine, Simplii Financial and EQ Bank to see if I’m getting the best, highest interest rate I can.
Where Can I Get the Best Interest Rate for My Short-term Cash Savings At EQ Bank, Oaken Financial, Simplii Financial or Tangerine?
OK, the first thing I’m going to do is look at the base interest rates without any special promotional short-term interest bonus rates.
For a Savings account,
- EQ Bank is paying 2.3 %
- Oaken Financial is paying 1.5 %
- Tangerine is paying 1.1 %
- Simplii Financial is paying 1 %
These rates are as of January 24, 2018.
There are some wild cards to consider though:
- some Tangerine customers have been offered 2.5 % (like me) till the end of May 31 2018
- some new Tangerine customers can get a promotional rate for their first 6 months of 2.4 % or 1.9 %
- all Simplii Financial customers can get a rate of 3 % until February 28 2018.
That’s why we have accounts at all 4 banks and move our money around to earn the highest interest.
For a Chequing account,
both Tangerine and Simplii Financial are still using a tiered system where different amounts of money earn different rates of interest. The highest rate, though, is still much less than their Savings account rate so try not to keep your extra cash in your chequing account.
For reference, on January 24, 2018
Tangerine’s rates for a chequing account are:
0-50 000 0.15 %
50-100 000 0.55 %
100 000+ 0.65 %
and Simplii Financial’s rates are:
0 – 1 000 0.05 %
1-5 000 0.10 %
5-25 000 0.15 %
25 000 + 0.50 %
EQ Bank and Oaken Financial don’t offer a chequing account.
Where Can I Get the Best Interest Rate for My GIC Savings At EQ Bank, Oaken Financial, Simplii Financial or Tangerine?
Be sure to stay below the CDIC limits on total $$ and on length of term (usually 5 years max) to protect your investment at any institution!
Right now on January 24, 2018, the clear rate winner is Oaken Financial.
1 year GIC
2.25 % 2.5% as of Friday January 26
2 year GIC
2.6 % 2.85% as of Friday January 26
5 year GIC 3.15 % 3.25% as of Friday January 26
Tangerine offers the next best rates.
1 year GIC 2 %
2 year GIC 2.15 %
5 year GIC 2.6 %
Simplii Financial has the lowest rates on offer.
1 year GIC 1.687 %
2 year GIC 1.293 %
5 year GIC 2.228 %
EQ Bank does not issue GICs.
What Interest Rate Can I Get for My Parked Cash In My Online Discount Brokerage Account at BMO InvestorLine, CIBC Investor’s Edge and RBC Direct Investing?
Our portfolios include a large chunk of cash and other fixed income investments because we are very conservative. I like to keep some of this cash in our RRSPs and TFSAs partly in case I see something worth buying in a hurry because our contributions are maxed out each year by the end of January.
I also earn dividends in the accounts which I’m not always keen to re-invest immediately.
So I keep the money in high interest savings account mutual funds or in GICs.
This week, on January 24 2018, the following interest rates were available
At all three brokerages, the Canadian dollar high interest savings account mutual funds (AAT770; ATL5000; and RBF2010 respectively) were paying 0.95 %.
At all three brokerages, the US dollar high interest savings account mutual funds (AAT780; ATL5001; and RBF2014 respectively) were paying 0.70 %
The GIC rates were close but not identical. These are the rates on January 24, 2018.
For a 1-year GIC
- BMO InvestorLine had the best offer at 2.1 %.
- CIBC Investor’s Edge and RBC Direct Investing were tied at 2.05 % (from HSBC Bank.)
For a 2-year GIC
- RBC Direct Investing had the best offer at 2.36 % from Home Trust Company.
- BMO InvestorLine and CIBC Investor’s Edge were tied at 2.35 % from Equitable Bank.
For a 5-year GIC
- RBC Direct Investing had the best offer at 2.86 % from Home Trust Company.
- BMO InvestorLine and CIBC Investor’s Edge were tied at 2.85 % from Equitable Bank.
So it looks like I should re-start my monthly GIC ladder inside our RRSP as the difference between the HISA rate and the GIC rate is starting to be important in total dollars earned.
Overall, our money is in the best places to earn the most interest–for now. In future, I’ll have to keep an eye on the rates to make sure we don’t need to move our funds.
- How to Buy Units of AAT770 at BMO InvestorLine
- How to Buy Units of RBF2010 at RBC Direct Investing
- How to Buy Units of ATL5000 at CIBC Investor’s Edge
Do you keep your Savings at different banks depending on the interest rates? Please share your strategies with a comment.