high interest savings account | Financial Crooks

NOTE: As of December 2016, EQ Bank had reduced its interest rate to 2%. Please check the EQ Bank website for their current interest rate.

OK, so having just started opening an account at Zag Bank to get 2.5% interest for a few months, I’m now changing direction and opening a daily interest savings account at EQ Bank after I checked it out a bit to get 3 percent interest indefinitely, although I’m sure it won’t last the entire year.

NOTE: Unlike some lucky (?) financial writers I am getting absolutely nothing from Zag Bank or EQ Bank for writing these articles. I’m just hoping to get a higher interest rate on my own hard-saved dollars and I’m documenting my trials and tribulations for your edification and amusement.

Who Can Open a Daily Interest Savings Account at EQ Bank?

Now, on January 23, 2016 the rules say you must

be 19 or older
be a Canadian Resident
not live in Quebec
have a Social Insurance Number
have a personal cheque pre-printed with your name, for a Canadian dollar account at a Canadian financial institution that you can make payable to yourself for at least $1 to open the account

You cannot use a credit card cheque.

You cannot use a void cheque.

Why Do All These e-Banks Seem to Need Me to Send in a Cheque from My Own Chequing Account?

These e-Banks are using the other banks’ security systems to ensure you are who you say you are.

In other words, you are not presenting your personal id such as a Driver’s License with a photo or a Passport when you are opening these e-Bank accounts. So they are demanding you provide proof from another bank that you are who you say you are.

The other bank or credit union issued you cheques in your name after identifying you properly.

If it turns out you applied fraudulently under a false name when opening your e-Bank account, then the e-Bank intends to defend itself it court by shifting the blame to your chequing account bank or credit union for failing to properly identify you. It’s a cover their butt tactic.

How Else Do e-Banks Verify Your Id?

Most of these banks will also ask you a string of questions based on your credit history report. In theory, only you should know those details and be able to answer correctly.
Zag Bank uses credit history questions as part of their account setup practices. EQ Bank said it was going to but I haven’t been asked them yet, so I’m not sure when they will be asked.

What Do I Need to Get Started Opening My e-Bank Account at EQ Bank?

What should I have handy before I start this

your SIN
a valid email address NOTE Your email address will be your login ID!
a password for signing in to your bank account with a minimum of 7 alphanumeric characters

You will also have to be able to access your email quickly to get a passcode that they will email you. The code expires a few minutes after it’s sent.

Getting a Savings Account at EQ Bank

Go to the EQ Bank website and make sure the security settings say you are at the Equitable Bank site.

Click on the Join Now button.

The Step 1 Page

Type the required information in the following fields:

Email address (this will be your Login name!)
Password
Confirm Password
First Name
Middle Name (optional)
Last Name
Address
City
Postal code
Mobile number (optional, which is good because I don’t have a Smart phone) (Or a Smart fridge.)
Other phone number
SIN
Date of birth (dd/mm/yy or select from calendar)
Occupation

From the drop-down list select your Province

Do NOT click on the circle beside No for the question Are you a U.S. person? If you do, it slides over to say YES you are a U.S. person for tax reasons. It’s not a check box.

Click on the Next button.

Step 1 Second Page

Answer the question: “Apart from you (or your joint account holder) will anyone else use or benefit from this account?
If your answer is NO just leave the circle beside NO untouched. (If you click on it, it actually changes your answer to YES.)
Answer the question: “How do you intend to use this account?”
From the drop down list select Personal Savings or the applicable answer.
After you have clicked through and read the Terms and Conditions and the Account Agreement, click to check the box beside:
I have read and agreed to the Terms and Conditions and Account Agreement.
If you want to get ads and other communications, click to check that box.
Click on the button: Open Account

The Step 2 Page

Your new account number will be displayed. Make a note of it somewhere safe!
Sign in to them email address that you provided to EQ Bank.
Open their note to read it and find out your one time passcode.
Type the Passcode in the text field: Enter your six-digit passcode
Click on the button: Verify

Completing Your EQ Bank Account Setup

To completely open your account, you must send in a cheque to EQ Bank either by using a photo cheque deposit app or by mailing it in.

Your cheque must

have your name pre-printed on it
be for an account at another Canadian bank or credit union, not a foreign one (credit card cheques are not acceptable)
must be for an amount of at least $1 (This is because they will actually cash the cheque to prove the account is active and in good standing)
not be a void cheque (So you can’t print a void cheque off at, say, Tangerine)
be made payable to yourself
be signed by you like any other cheque

You can use the EQ Bank app to deposit it OR

Mail it to EQ Bank at their Toronto mailing address which will be provided on the enrollment screen.

Before closing the window, you may want to read the other EQ Bank documents. If so, click on the link provided.

NOTE: EQ Banks says your new account will become active 5 days after they receive and deposit your cheque. They will advise you by email when your account is fully active.

Will it work? Stay tuned!
UPDATE: February 10, 2016: My account is fully activated at EQ Bank and I’m using it in various ways. It all went fine, if a bit slowly.

Related Reading

Join In
Are you tired of opening new bank accounts to chase a better interest rate? Please share your views with a comment.

OK this is getting silly but now there’s another new e-bank option that is offering a 3% per year interest rate on its savings account. That’s better, for now, than the 2.5% being offer by Zag Bank. The rate is, of course, subject to change without notice so everyone expects it to drop quite a bit fairly soon. Still, it’s a good rate while it lasts and since the money is in a savings account and not a GIC, it can be transferred out if the rate drops and a better rate is offered somewhere else.

What Is EQ Bank?

EQ Bank is the newest offering of the Equitable Group. According to their website: “EQ Bank is brought to you by Equitable Bank, a bank with over four decades of experience in the Canadian market.” Equitable Bank was founded in 1970 as The Equitable Trust Company. It is a wholly-owned subsidiary of Equitable Group Inc. That group has been offering mortgages and GICs through various parts of the company for many years.

What Bank Accounts Is EQ Bank Offering in January 2016 And What Are the Fees and Options?

EQ Bank itself is an e-bank.

It does not have branches.

You do not get a debit card.

It may offer more options in the future but right now it only offers:

a high rate of interest on daily savings
interest is calculated daily and paid monthly
You can pay bills from the account for no fee
You can set up a bill payment to be made in the future
Bill payment requests are processed on the next business day. So if you “pay a bill” on a Friday, it will not actually start getting paid until Monday.
You can make 5 free transfers using the Interac transfer system per month
No minimum balance is required
You can talk to an agent by phone or by online chat
There is no fee for unlimited daily transactions
You can deposit a cheque payable to yourself into the account using a photo App on your Apple or Android device (only) just like at Tangerine, PC Financial and a few of the Big Canadian Banks
Funds deposited in the savings account are covered by CDIC
There are no ABMs or ATMs for this bank at this time; you have to move your money into and out of the account by electronic transfers between linked accounts, by Interac e-Transfers, or (for moving out only) by paying a bill
There are no cheques for the account.
There are no paper statements for the account.
You cannot deposit cheques or transfers in foreign currency into your account. So if you get a cheque in US Dollars, for example, you can NOT deposit it into your account at EQ Bank.
On January 19, 2016 it did not seem possible for a resident of Quebec to open an account (although there may be a way to legally do it as Tangerine and PC Financial have both figured out ways that involve visiting another province to sign up in person.)

Can I Open a Joint Savings Account at EQ Bank?

Joint accounts were not available on January 19, 2016.

What Do I Need to Open a High Interest Savings Account with EQ Bank?

You will need

a chequing account at another Canadian financial institution
a cheque with your name pre-printed on it, for at least one dollar, made payable to yourself, at another Canadian financial institution. EQ Bank will link your new account with the account identified on the cheque. Once the link is created you can electronically transfer money in and out of that chequing account from your EQ Bank account.
a Social Insurance Number

How Long Will It Take to Open an Account at EQ Bank?

It will take at least 5 business days after they receive your cheque. During January 2016, they have been swamped with new applications so it has taken longer than 5 business days for some customers.

Are There Any “Hidden” Fees at EQ Bank?

They are not particularly hidden. You can check the fees on the website at https://www.eqbank.ca/personal-banking/features-rates/savings-plus-account-fees-and-features

As of January 19, 2016, the notable fees are

$1.50 for your sixth and any further Interac e-Transfers during one month

Is An Interac e-Transfer the Same as an EFT Between EQ Bank and my Regular Bank?

No.

EFT or Electronic Funds Transfers

An EFT or Electronic Fund Transfer is the usual way you would move money from your EQ Bank account to your bank account at another bank. The accounts must first be linked by providing a cheque from your non-EQ bank account to EQ Bank. Then you can request a transfer in to or out of your EQ Bank account by using certain commands on the EQ Bank website.

If you have an account at Tangerine, you can also use the Move My Money feature at Tangerine to move money in to and out of your EQ Bank account once you have linked the accounts.

Similarly, you can move money in or out to EQ Bank from PC Financial if you have linked the accounts.

An EFT usually takes place on the business day following when you make the request. So if you asked to transfer money from EQ Bank to BMO on Friday, January 19, it would usually not transfer until Monday, January 22, and would not usually show up in your BMO account until Tuesday or Wednesday.

Interac e-Transfers

An Interac e-Transfer is a way to send money to anyone’s bank account using email. You tell EQ Bank how much money you want to send out of your account and the email address of the person you want to send it to. Usually you include a security question in your email that the person receiving the email must answer correctly before they are allowed to deposit your money into their own account. They have to answer the question, then they have to type in their bank’s number, their branch’s transit number and their bank account number to complete the transfer. The transfer could take place as quickly as one hour after the receiver deposits your money.

There are limits to how much money you can move by Interac daily, weekly and monthly.
I’ll definitely be testing the Interac e-Transfer option after I get my account opened: it costs money to use this option at Tangerine and PC Financial so I’ve never tried one.

As you can tell from that comment, I will be trying to open an account at EQ Bank very soon. Wish me luck!