Background on Interest Rates in Canada:
Canadians, like other folks, are always on the hunt for high interest-bearing products. In the search to unearth the best deals, it’s important to understand the current economic climate in Canada. Trading Economics, a respected economics authority, indicates that the Canadian interest-rate is currently 1.75%. The Bank of Canada decided to maintain the interest-rate at 1.75% when last it met on December 4, 2019. FYI, this is the highest interest rate in Canada since the Global Financial Crisis of 2008.
Yet, by historical standards, this interest-rate is relatively low, and is hardly an enticement for savers to deposit their funds in fixed-interest-bearing accounts with Canadian banks. The bank rate is currently 2.0%, and the deposit rate is 1.50%. Canada’s interest-rate topped out at 16% in 1991, and dropped to a record low of 0.25% in April 2009. The BOCs decision to leave the interest rate at 1.75% is designed to support monetary policy accommodation.
With inflation on target to reach its 2% figure, and the economy inching towards full employment, accommodation is deemed the best approach. The Bank of Canada is the most important element vis-a-vis interest rates. With the Canadian economy on the mend again, unemployment is at multi-decade lows, and Canada boasts the strongest growth among G7 countries.
Anyone with a variable interest rate obligation naturally pays the price when interest rates rise. By the same token, rising interest rates can prove beneficial with certain bank savings deposits. Higher interest rates mean that customers earn more interest on their deposits. One such example of a guaranteed high-yield, no risk, fixed-interest-bearing account is that offered by EQ Bank of Canada. Assessments confirm that high-yield, low-risk investments are certainly worthy of consideration.
Canadian Banks Roll Out High Interest Rate Options
Financial analysts evaluated multiple Canadian banks as viable investment options. Studies were conducted, and detailed assessments concluded – including an EQ Bank review. This particular case study is an interesting one. EQ Bank eschews high-overhead costs and the construction of bank branches; all activities are geared towards offering customers the highest possible interest-rate return on their money.
As such, EQ Bank – Equitable Bank – provides accounts with no monthly fees, and it is federally regulated as a Schedule One Bank. With some 800+ employees on board and assets valued at over $32 billion, this decades-old company offers clients a variety of products and services, including deposit options, credit facilities, home equity lines, and mortgages, et al. The EQ Banks Savings Account is one of its most popular options, with no minimum balances, no monthly fees, and no hidden expenses.
The Savings Plus Account offers a highly competitive 2.30% interest rate with flexible banking options for clients. This offer allows customers to enjoy unlimited transactions on their accounts, no minimum account balance, and no everyday banking fees. As one of Canada’s pre-eminent high interest savings accounts, this option offers an entirely online savings account too. With digital banking facilities available, clients don’t need to concern themselves with banking fees. Plus, customer support is available 7 days a week from 8 AM through midnight Eastern Time. This online bank’s interest rate is determined based on the total value of a customer’s closing balance. It is paid monthly and it’s important to note that interest rates are variable, and can change at EQ Bank’s discretion.
Deposit protection is afforded, courtesy of the CDIC (Canada Deposit Insurance Corporation). As a CDIC member, EQ Bank deposits are protected up to the maximum amount specified by the CDIC, for up to 5 years. This online bank allows customers to send money, pay bills, and earn interest. By restricting costly investments in land-based bank branches, EQ Bank is ideal for clients wanting to build a financial portfolio with their own money. The rates are competitive, leading to large-scale savings. EQ Bank recently partnered with leading online money transfer service, TransferWise, allowing customers to enjoy substantial cost savings on international money transfers. This online bank is geared towards mobile users, with Android and iOS functionality.
Safety Considerations Prioritized
EQ Bank is owned and operated by Equitable Bank (founded in 1970 as The Equitable Trust Company), and it is a CDIC Member. With over 45 years of experience in the industry, customers have benefited from the collective know-how of brokers using Equitable Bank products. This award-winning company is the recipient of the 2018 Best of Finance Prize for Banking and Investing with the Best Savings Account. Also in 2017, EQ Bank won the Best of Finance Award, and the 2017 Finance Awards, among others.
With notable op-eds in leading financial services platforms like MoneySense, EQ Bank’s savings account is highlighted as an attractive investment option for customers. The bank’s slogan – We Don’t Build Branches – attracted a net total of 17,000 customer signups, and an 89% increase in online traffic. The safety aspect is assured, given that customers know exactly what they’re getting at the time that deposits are made. The rates are per annum, and may be subject to change without notice (at the bank’s discretion). Setting up an account is relatively easy, but account holders must be Canadian residents and must meet the province’s age of majority. At the time of writing, the EQ Bank Savings Plus Account was not available in the province of Québec. As per the account agreement, ID verification is mandatory. Canadian residents must submit a Social Insurance Number for tax purposes.
Interest rates and calculations may change without prior notice, but customers will be advised with notifications through the SMC (secure message centre) on site. Most EQ Bank Savings Plus Account features are free, but international money transfers through TransferWise will incur fees. The dollar limit maximums depend upon the method of transfer, and the payment processor that was used. There are certain maximum balances per customer, depending upon when the account was opened (before February 21, 2016 the balance is $500,000, and after that date the balance is $200,000).
When measured against stock-market volatility, cross currency exchange rate fluctuations, and other high-risk international investments, the stability of a fixed-interest-bearing 2.30% return on a savings account is considered an attractive investment option for customers.
