Comparing the Interest Rate for a Business Savings Account at Tangerine versus the Big Banks

Posted on 2014 06 27 by BetCrooks

Tangerine recently started offering a Business Savings Account. You can’t use it for writing cheques or paying bills so it seemed like a simplistic offering. About the only thing it offers you is a modest interest rate of 0.35% as of April 30 2017 ~~1% (at the time this was written.~~) It left me wondering just how low the interest rate is that is offered by the Big Canadian Banks for their business savings accounts: So I checked.

A Few Words of Caution About Business Savings Accounts

The rates described here were posted online or obtained by telephone on June 26 and 27, 2014. They can and will change so please check again with a bank of interest before making any final decisions. (The idea of this article was to check whether any banks are offering particularly high or low interest.)

Most of these accounts have fees. The fee structures can be quite complex which makes it difficult to include them here. Since my primary goal is to compare the rates to that offered by Tangerine (which is not charging any fees for its Business Savings Account at the time this was written) I won’t detail any bank account fees unless that bank is offering a much better interest rate than Tangerine. Always check for details about fees before opening a new account: fees change frequently.

Which Bank Business Savings Accounts Offer the Highest Interest (on $24 000)?

I only checked into the following 6 banks. Credit unions and other banks may have better offers so you may want to shop around before opening a new account.

Many banks offer increased interest rates on higher balances which makes it more difficult to compare: You should have a good idea of your average minimum monthly bank balance to pick a bank offering the best rate for your business.

So, for a basic Business Savings Account, the banks that offered the highest interest
on an assumed monthly minimum balance of $24 000,
from best to worst were:

Tangerine Business Savings Account
~~(around $240 a year)~~
On April 30 2017, at 0.35% per year, it would only earn about $84 per year.
CIBC Business Investment Growth Account
(April 30 2017 0.30% on balance of 24 000) $72
Scotiabank Money Master for Business Account
(April 30 2017 0.05% on balance above 4000) $9.50
BMO Premium Rate Savings Account
or TD Business Savings Account
(April 30 2017 0.05% on balances 10 000 – 59 999.99) $7
RBC Essential Business Savings Account
unknown: you have to phone in for the current rate
(~~around $45 a year if I heard the correct information about the tier: Please check before opening an account and see the details below.~~)

Why Might Tangerine Not Be the Best Idea?

If your chequing Business account charges you for each cheque or outbound electronic transfer of funds, you need to consider the fee you will pay to move your money to/from Tangerine. Although Tangerine does not charge a fee for deposits or withdrawals, the bank managing your business chequing account may charge you for both. If the fee is too high, it will make Tangerine a less attractive option.

That said, Tangerine is currently April 30 2017 ~~(June 2014)~~ offering 0.35% 1% annually on the entire balance.

That’s significantly higher than what most of the Big 5 banks is offering on a small balance. However CIBC is offering a very similar rate and should be looked at closely to see what other costs or benefits it offers.

The Details of the Interest Rates Offered on Business Savings Accounts

All of these rates were posted online or obtained by telephone on June 26 and 27, 2014 and again on April 30 2017. They can and will change.

Sources for 2014 Information only:

BMO 2014
Source: http://www.bmo.com/home/personal/banking/rates/bank-accounts

BMO AgriInvest Account 2014
1.2% on the entire balance

BMO Business Premium Rate Savings Account 2014

Up to 9 999.99	0.1%
10 000 to 59 999.99	0.35%
60 000 to 249 999.99	0.55%
250 000 to 499 999.99	0.65%
500 000 up to 4 999 999.99	1.2%
5 000 000 up to 50 000 000	1.2%
50 000 000.01 and more	no interest is paid

NOTE: Interest is paid on the portion of the balance within this tier.
That means that if you have, say $65 000 in your account, they only pay the 0.55% on the $5000 not on the total $65 000.

CIBC 2014
Source: https://www.cibc.com/ca/rates/business-bank-accts-rates.html#CIBC+Business+Interest+Account

CIBC AgriInvest Account 2014
1.0% on the entire balance

CIBC Business Interest Account 2014

Up to 9 999.99	0.1%
10 000 to 99 999.99	0.35%
100 000 to 249 999.99	0.50%
250 000 to 999 999.99	0.60%
1 000 000 and up	0.65%

NOTE: Each of these rates includes an annual bonus interest rate of 0.10%.
I’m not sure exactly what that means. It sounds like 0.10% of the posted interest rate is dependent on meeting some other condition which is not clearly listed. Check before opening an account!

RBC 2014
RBC wins the prize for being the most difficult bank to get the information from. Instead of posting their rates online they make you telephone to get them. You can’t even get them from their Live Chat ops!

RBC AgriInvest Account 2014
I never did get rates from their operator for this account. Sorry. Please phone for current rates! 1-800-769-2520.
0 to 4 999.99
5 000 to 9 999.99
10 000 to 24 999.99
25 000 to 99 999.99
100 000 to 249 999.99
250 000 and over

RBC Business Essentials Savings Account 2014
I had to telephone to try to get the rates for this account. I couldn’t even use Live Chat.

The operator I spoke with wasn’t sure of the rates and had to put me on hold to check.

I think I may have mis-heard her answer: It sounded like the rate was 0 until $10 000, but then she started with the rate for balances of over $100 000. I’ll give RBC the positive benefit of the doubt for this article and assume the 0.32% rate starts at $10 000 not at $100 000. Eventually I will call again or perhaps they will wise up and start posting their rates like all the other big banks.

0 to 9 999.99: 0%
10 000 or 100 000 to 499 999.99: 0.32%
500 000 to 999 999.99: 0.37%
over a million: 0.47%

ScotiaBank 2014
Sources include: http://www.scotiabank.com/ca/common/pdf/commercial/fees_interest_schedules.pdf

ScotiaBank should win a prize for offering the largest number of types of business accounts. I’ll let you decide whether that should be a “good” prize or more of a “rotten tomato” kind of prize.

ScotiaBank Business Interest Account 2014
Source: http://www.scotiabank.com/ca/en/0,,1117,00.html

0 to 4 999: 0%
5 000 to 24 999: 0.1%
25 000 to 99 999: 0.25%
100 000 to 249 999: 0.3%
250 000 or more: 0.35%

ScotiaBank Business Investment Account 2014
Source: http://www.scotiabank.com/ca/en/0,,1117,00.html
For customers with surplus credit balances of 25 000 to 50 million.

Under 25 000: 0%
25 000 to 999 999: 0.95%
1 million to 50 million: 1.1%

Scotia Power Savings for Business 2014
Source: http://www.scotiabank.com/ca/en/0,,1071,00.html
For customers with surplus balances of 25 000 to 2 000 000.

Under 25 000: 0%
25 000 to 2 000 000: 0.95%

ScotiaBank Money Master for Business Account 2014
Source: http://www.scotiabank.com/ca/en/0,,1071,00.html

Under 5 000: 0.100%
5 000 or more 0.2000% and higher rate will be paid on the entire balance if it exceeds $5000

TD 2014
Source: http://www.tdcanadatrust.com/products-services/small-business/rates.jsp

TD AgriInvest Account 2014
1% on the total daily closing balance

TD Business Savings Account / Business Investor Account 2014
0 to 9 999.99: 0.1%
10 000 to 99 999.99: 0.25%
100 000 to 499 999.99: 0.45%
500 000 and up: 0.6%

Tangerine (formerly called ING Direct Canada) 2014
Source: http://www.tangerine.ca/en/rates/
Business Savings Account 1.0%
No minimum balance.

Should You Consider a Business Savings Account at Tangerine? 2014

That’s a really complex question. Only you know how much cash your business has to keep in short-term savings. Setting up any business bank account takes a fair amount of paperwork as well. Still, it’s worth considering if you have a high minimum monthly cash balance in your business account that is not earning any interest.

Related Reading
I’m not sure this is related to anything yet! Hopefully I’ll have some other business banking articles soon.

Join In
Do you have a Business Savings account as well as a transaction/chequing account? Has it made itself worthwhile? Please share your views with a comment.
image of thin green double line

How to Connect a Tangerine Account to a Bank Account at Another Big Bank

Posted on 2014 06 09 by BetCrooks

I set up my Tangerine Savings Account, over 7 years ago when it was called an ING Direct Investment Savings Account, and I linked it to my regular chequing account at a Big Canadian Bank. Recently, I decided to link it to a joint chequing account my husband and I have at a different Big Canadian Bank. I want to be able to move my money overnight from the Big Bank to the Tangerine account even though they will put a hold on the money once it lands at Tangerine. I could move the money by writing a cheque on the joint account and using the Cheque-In photo deposit app to cash it into my Tangerine Chequing Account. But I’d prefer not to waste a paper cheque, since the Big Bank charges us for each paper cheque even if it doesn’t charge us to use one. And I’d prefer the money to go straight to my savings not route through the Tangerine chequing account. So today I decided to connect my Tangerine Savings Account to this joint chequing account at the Big Bank.

How Many Bank Accounts at Other Big Banks Can I Link to my Tangerine Account?

According to the Tangerine website as of June 2014, you can link your account to up to 3 bank accounts at other financial institutions.

I know that there are many bargain hunters who link to PC Financial and periodically transfer all their savings from one to the other to benefit from short-term-interest-rate bonus incentives. Personally, I haven’t bothered with that. Yet. ; )

What Info Do I Need to Link my Bank Account to Tangerine?

For your account at a Big Canadian Bank (or other financial institution) you’ll need to know

the transit number
the bank number
the account number
whether it’s a US or Canadian dollar account

What’s my Bank Number?

Well, if you have a chequing account this is easy to check. (Pun intended.)

At the bottom of your cheque is a serious of odd marks with numbers between them. If you squint at them for a while, you’ll realize that near the beginning 5 of them are your bank account’s transit number. Then there is an odd dash that is divided up into a few segments. Then there is a 3-digit number. That’s your Bank Number. Then there’s another symbol, mine looks like neutral Smiley face. Then there is your bank account number.

In this ING Direct cheque, the transit number is 00152 and the bank number is 614. (You didn’t really think I was going to include my account number too, did you?)

If you don’t have a chequing account, or if you can’t decipher your cheque, you can
ask your bank what its Bank Number is; or
check online lists.

Common Bank Numbers in Canada

Some common Banks have the following Bank Numbers:

Bank of Montreal: 001
The Bank of Nova Scotia: 002
Canadian Imperial Bank of Commerce: 010
Royal Bank of Canada: 003
The Toronto-Dominion Bank: 004

You can see that either BMO invented these numbers or that CIBC was a very late arrival on the Canadian banking scene when it started as the Canadian Bank of Commerce in 1867.

Do I Need to Send in a Cheque to Link to my Tangerine Account?

No.

You don’t need to send in a cheque to link an account if you already have your Tangerine account set up BEFORE you try to make this connection.

For example, when I first opened my Tangerine Savings account I sent in a cheque from my Big Bank chequing account to link the two. Now, though, I am linking to a different account at a different Big Bank without sending in a cheque.

Linking a Tangerine Savings Account to a Big Bank Joint Chequing Account

Sign In to Tangerine

Open your browser and go to www.tangerine.ca
Click on the link: I’m a Client, let me in!
Type the appropriate info in the Enter your Client Number, Card Number or Username text field.
Never click to select Remember me. Why would you want to give a criminal half of the info they need to break into your account?!
Click on the Go button.
Type the answer to your secret question in the Answer text field.
Click on the Next button.
Type your PIN in the Personal Identification Number text field.
Click on the Go button.

Add the New Account to Your List of External Accounts

UPDATE: October 1, 2017. Tangerine has revised its website, so I’ll have to revise my procedures!

Click on your abbreviated name at the top right side of the screen.
Click on Profile & Settings.
From the links across the top of the Profile & Settings page, click on: External Accounts.
Your existing account links are displayed.
If, like me, you already have 3 accounts linked you cannot add another! Fortunately, I have an account linked which I do not need any more. So I will permanently remove that link. To remove the link, I will click on the Delete button for that line.I read the warning about possibly breaking an Pending Transfers. Then clicked on the Delete button again. A confirmation message is given with the Transit and Account numbers but not the Institution number. Weird. I clicked on the Done button.
Click on the button Add account button.

The Add External Account Page

Read through the information.
If you’re willing to go ahead
- Type the transit number for your Big Bank account in the text field: Transit number
- Type the number for your Big Bank or Credit Union etc, in the text field: Institution Number (yes, this time they capitalized Number)
- Type the account number for your Big Bank or Credit Union etc. account in the text field : Account Number
- Type the account number for your Big Bank or Credit Union etc. account in the text field: Re-enter Account Number to Confirm
- Ensure the correct currency, Canadian or US dollars, is selected for that external bank account.
Click to select the box beside the statement “I confirm that the information provided above is for a personal bank account in my name” if and only if you are trying to link to your own personal account and not that of a friend, relative, business or other entity. You cannot use this page to link to anyone’s account except your own personal account.
Click on the Next button.

The Review the External Account Information Page
Cool!

A pop-up window lists the bank name and address for our joint chequing account at the Big Bank. It’s correct too!

If the details are correct, click the Submit button.

The Account Added Page

Read the info.

Basically it says sometime in the next two business days, Tangerine will deposit two small amounts of money into my external/Big Bank bank account. I have to write down those amounts, then log in to Tangerine and report what they were. If I get it right, they will finalize connecting the two accounts. (This is what Google does too, when you tell them where to deposit your pay from AdSense.)

Click on the Done button.

I can also see that beside the listing for my Big Bank account, which has been added to my list of external accounts, there is a Cancel button.

It should switch to a Confirm button after they have sent me the deposits. I’ll need it after they deposit the money in my account.

For now, though, I’m done.

Sign Out of Tangerine Safely

If you have no other banking, under your abbreviated name, click on the Log Out link.
For increased security, clear your browser cache and close your browser session.

Check Your Email Alerts

I received an email notification that I had requested to add a link to a new external bank account.

Start Checking and Waiting (Beware: Sexist Content Included)

Start checking your Big Bank or Credit Union etc bank balance hourly to see if Tangerine has made the two test deposits yet.

Note: realistically the deposits will be credited when your account file is updated overnight. So you only need to check once per day. If they are not there yet, they won’t be until at least the next day.

As one of my more annoying teachers in Grade 8 used to say: “Patience is a virtue; possess it if you can; found seldom in a woman; and never in a man.”

How’s that for sexist! And it was a He who kept quoting this.

Related Reading

Join In
Have you connected your Tangerine account to the maximum 3 other external bank accounts? Do you send your money flying through the electronic ether on a daily whim? Or do you prefer to shuffle your money with a paper trail and always use a cheque to move it from one account to another? Please share your opinions with a comment.
image of thin green double line

Financial Crooks

An Honest Crooks Shares Financial Tips and Investing Experiences

Tag Archives: Bank of Montreal