Can my bank change my savings account interest rate without telling me?

Unfortunately, banks have plenty of flexibility to leave you in the dark.

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When interest rates drop, the growth of your savings slows — and it can happen without you even knowing it. Your account’s terms and conditions often allow your bank to change your interest rate without notification. Learning how to predict these changes and find out if they affect your account can help you stay on top of your finances.

EQ Bank Savings Plus Account

EQ Bank Savings Plus Account

2.00 % APR


  • Zero everyday banking fees
  • Free transactions
  • No minimum account balance

EQ Bank Savings Plus Account

With no everyday banking fees and free transactions, open an EQ Bank Savings Plus Account and get an interest rate of 2.00%.

  • Account fee: $0
  • Interest rate: 2.00%
  • Min. deposit amount to open account: $0
  • Account type: Savings
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Savings account interest rate changes

Banks are private businesses with the right to set and change interest rates as they please. However, these rate changes don’t come out of nowhere — the interest rate on your savings account usually fluctuates in line with the national prime interest rate.

This rate is set mostly by the Bank of Canada as a target by which banks set rates for both loans and deposits.

The Bank of Canada is Canada’s central bank. It establishes national monetary policy, controls the country’s currency and acts as the government’s financial agent, managing both public debt and foreign exchange reserves. Keeping an eye on the prime rate set by the Bank of Canada can help you predict when your savings account rate might change.

Banks aren’t required by law to base interest rates on the prime interest rate and can choose to set rates higher or lower instead. However, the prime rate indicates the direction that financial policy in Canada is going to take, so financial institutions pay attention to it. Nevertheless, this rate is just one consideration that banks look, at along with market conditions and the cost of borrowing from other financial institutions.

What this means for you

You may think your money is working as hard as possible, growing at the APY you signed on to when opening your account. But chances are good that the interest rate on your savings account has fluctuated without your knowledge.

Banks are given a lot of freedom in how they operate — including the freedom to change your APY without notification. Rather than receiving notifications whenever the interest rate is adjusted, you may notice it down the line on – say, a bank account statement reflecting the adjusted rate.

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The impact of an interest rate cut

Stacks of quarters visualizing dropping interest ratesAn interest rate cut of 0.25% or 0.50% may not sound like much. But even a small adjustment can result in a sizable difference to your savings balance.

Let’s say you’ve saved up $15,000 in an account with a 1.95% APY. If your bank drops that rate to 1.55%, you’ll lose $61.05 in yearly interest income that would otherwise go straight in your pocket.

The effect of compound interest can quickly multiply the amount of money you’re effectively missing out on. And with the potential for interest rates to continue dropping, the net effect of a lower interest rate put a dent in your savings goals.

How to stay aware of interest rate changes

Remain vigilant to make sure you’re earning the best possible interest rate on your savings account. Review your account’s terms and conditions to find out if your bank is contractually obligated to notify you of rate changes. If they aren’t, it’s up to you to keep track.

Check your monthly account statements to stay on top of your current interest rate. You’ll also stay aware of your total balance to the interest you’re earning, which will help you know when it’s time to shop around for a stronger rate.

Check out these savings account interest rates

Name Product Interest Rate Promotional Interest Rate Minimum Balance Account Fee
EQ Bank Savings Plus Account
Enjoy zero everyday banking fees, free transactions and no minimum balance with an EQ Bank Savings Plus Account.
Tangerine Savings Account
Earn 2.80% interest for 5 months (up to a maximum of $1,000,000) as a new Tangerine client. Offer expires July 30, 2020.
Wealthsimple Cash
Earn 1.4% on any money you invest and withdraw your funds at any time.

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How to earn the best interest rate on your savings account

Take control of your finances while ensuring that interest rate cuts minimally affect your savings bottom line.

Shop around

Review your savings account at least each quarter for the details you’ll need to compare other, potentially better options on the market. You’ll find a huge range of savings account products offering strong rates for growth, including high-interest savings accounts and saving bonds.

Consider a Guaranteed Investment Certificate (GIC)

GICs come with a fixed interest rate for the term of the deposit, which is also locked-in. GIC rates are often stronger than those for traditional bank accounts, earning you more on your investment with less risk.

Bottom line

Banks are not legally required to notify you when they decide to change your account’s APY. Pay attention to the rate in your monthly statements, and take your money elsewhere if you think you’re at an unfair rate.

Compare savings accounts and GICs from a range of banks to grow your money — and reach your financial goals — more quickly.

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