We are saving again, this time to replace the roof and furnace sometime in the next two to three years. This is money in addition to our emergency fund: although if the furnace conked out or the shingles blew off, it might be an emergency but the spending to replace both is really a planned expense. Our emergency fund is largely at Oaken Financial in a series of GICs, one of which matures each month ready to cover our budget if we suddenly have no income. This planned expense money, though, could be saved any where. So I decided to shop around and see where I could get a high interest rate for our cash in a no fee daily interest savings account.
Today’s Interest Rate Offers for No Fee Savings Accounts
Here are the rates I found for regular no-fee savings accounts on January 9 2017:
- EQ Bank 2%
- Alterna Bank 1.95% *
- Oaken Financial 1.5%
- Tangerine 0.8%
- PC Financial 0.8%
* I haven’t used Alterna Bank so I’m not aware of all the details of their business. You can read about them on the RedFlagDeals personal finance forum. They are CDIC insured which is very important to me for any eBank.
What Special Short Term Promotional Rates Are Offered for Savings in January 2017?
There are some promotions going on.
Tangerine is offering
- certain customers up to 3.25% on their savings from January 5 – March 31 2017. But it’s not offering the rate to everyone and there isn’t much information on why some people are getting the higher rate.
- 2% to some customers who phone in and request the higher rate, if they threaten to transfer out large balances, offer to transfer in large balances, or ask based on high usage of Tangerine products such as paying bills and having a mortgage. Not all customers who ask get the higher rate.
- 1.9% for the first six months to customers opening their first account ever with Tangerine or ING Direct Canada who open only a Savings account
- 2.4% for the first six months to customers opening their first account ever with Tangerine or ING Direct Canada who open both a Savings and a Chequing account
Could they make this any more confusing?!
PC Financial is offering some customers 1.5% on their savings from January 1 – March 31, 2017. It is not offering that rate to everyone and there isn’t much info on how to get this higher rate.
It’s Tricky to Get the Best Rate for Your Savings Account
The problem is that several of the major e-Banks like Tangerine and PC Financial have switched to offering short-term promotional higher interest rates and only to some customers.
For example, right now, I have an offer from January 5-March 31 2017 from Tangerine for 3.25% on my savings account deposits. My husband, however, has no special offer from Tangerine! He did get offered 1.5% from PC financial for those three months, though.
Some of the Big 5 Canadian Banks (BMO, CIBC, RBC, Scotia, and TD) also come out with short-term higher rates, often linked with opening a new account. Because these are not, generally, no fee accounts, I’m not including them here. A few fees can quickly use up any additional money earned in interest payments!
Where Should I Park My Cash for Three to Six Months While I Wait To Buy My House?
This question gets asked a lot. If you’ve got less than a year until you’re going to buy your home, even though interest rates are painfully low, you’d do better to keep your cash in a savings account. A cashable GIC is unlikely to offer you a better rate and a regular GIC cannot be cashed until it matures. Yes, it would be great to make thousands of dollars by investing in rising stocks but it would be horrible to lose thousands if stocks drop and you have no way of predicting which way they will go.
If you are going to keep your cash in a savings account, though, make sure you get as much interest as you can. It will be taxable but it will still help reduce the impact of inflation on your savings. If your savings are large, be willing to spend an hour or two opening new no-fee bank accounts, if necessary, to get a significantly better rate.
I Don’t Want to Open a Bunch of Bank Accounts: Where Can I Put My Money and Leave It at a Good Rate?
Many people don’t want a series of bank accounts. It’s just too much hassle to open them and to keep track of them.
For those people I’d suggest considering
- A local credit union, if one has a good long-lasting rate
- Oaken Financial, which has been keeping its savings rate steady for a long period of time
- EQ Bank, which is currently the highest rate of the e-Banks that doesn’t offer different rates to different customers when they phone in, but which has dropped its rate twice in 2016 without much forewarning
I wouldn’t suggest Tangerine or PC Financial unless you want both your savings and your chequing accounts at the same bank. Both of these two like to only offer a low regular interest rate, which is 0.8% on January 9 2017, and then offer promotional rates to only some customers for 3-6 months at a time. If you only want a savings account, and you don’t want to track whether you’re maximizing your interest rate by phoning in for promotions, I would stick with a credit union, Oaken or EQ.
What are these paying today, January 9 2017?
- Oaken Financial: 1.5%
- EQ Bank: 2%
- Credit Unions: Vary
What Am I Doing With Our Roof Fund?
Well, since right now I can get 3.25% at Tangerine until the end of March 2017, that’s where the roof money will be parked. What I’ll do in April, though, is hard to say!
Have you found a good spot to park your cash? Please share your views with a comment.