EQ Bank Savings Plus Account
Interest rate of 1.5%
- Zero everyday banking fees
- Free transactions
- No minimum account balance
Today’s leading savings accounts offer competitive interest rates, minimal fees, accessibility and protection to keep just about any balance safe and growing. We rolled up our sleeves to review and rate different savings accounts to help you compare what’s out there.
A savings account is a bank account where you can safely store your money. It earns interest and is insured up to $100,000 by the Canada Deposit Insurance Corporation (CDIC) – which means you’ll get your money back in the rare event your financial institution goes under. Savings accounts are more restrictive than chequing accounts. You typically don’t get a bank card or cheques and you may have to pay every time you make a withdrawal.
If you answer yes to any of these three questions, then it’s time to get a savings account:
With no everyday banking fees and free transactions, open an EQ Bank Savings Plus Account and get an interest rate of 1.50%.
For savings accounts, the interest rate is probably the most important factor in growing the money you’ve stashed away, and it’s usually expressed as a yearly rate called the annual percentage yield (APY). While many banks and credit unions pay an interest rate somewhere around 0.10%, there are several digital banking providers and other providers that pay around 2.00% or more. On a $5,000 balance, that’s a difference of $95 each year.
Also, keep in mind that if the interest rate you earn is less than the rate of inflation, your savings are actually declining in purchasing power. Over the past decade, inflation has fluctuated from a low of 0.93% in 2013 to a high of 2.89% in 2011.
The primary cost of a savings account is often the monthly fee – if the account has one. Many financial institutions now offer free savings accounts, while others are willing to waive the monthly fee if you maintain at least a minimum balance. Be mindful of any monthly fees because they can quickly and easily wipe out the benefits of interest earned. For example, even with 2.00% interest, you’d need to keep at least $3,000 in your account just to break even on a mere $5 monthly fee.
The rate of interest you earn on your savings is set by your bank, though interest rates generally fluctuate with the broader financial market and can be influenced by the rates set by the Bank of Canada. Interest rates vary by bank and the type of savings account you choose.
Savings accounts typically accrue daily or monthly compound interest. With daily compound interest, your bank calculates interest on your balance each day using a specified rate. In effect, you end up earning interest on the interest you’ve already earned. Your bank then pays out the compounded interest monthly as a credit to your account.
Interest you earn on your savings account is taxed at the same rate as any earned income – and you’ll have to report it to the CRA.
Your money doesn’t sit in a savings account untouched. When you open an account, you give your bank access to lend your money out to others.
Banks reward you for that access with interest, even if those rates are slightly lower than the rate they charge borrowers. It’s how they stay in business.
And if the bank loses money on that loan, it doesn’t affect your account balance. Furthermore, the vast majority of banks, financial institutions and credit unions are insured by the CDIC, so even if they go out of business, you’ll get up to $100,000 back.
Your interest rate is your reward for allowing your bank to lend out your money. Make your money work hard with the highest interest rate you’re eligible for.
Most banks waive monthly fees on savings account as long as you maintain a minimum balance. If you’re paying a monthly fee with your account, it may be time to explore your options.
Accessibility depends on your preferences and personal savings goals. A basic savings account allows you to take out or move money nearly instantly, while you’ll pay a penalty to withdraw a money from an investment account (such as a GIC) that hasn’t yet matured.
If you find your savings balance building up but at a less-than-average rate, it could be time to switch to a high-yield or other account.
Savings accounts come in different shapes and sizes in order to meet the varying needs of savers across Canada. Check out each variant below and compare some of the best options for that type.
Based on our reviewing and rating a variety of savings accounts, this is our list of the best overall picks.
When a great interest rate is at the top of your list, these are the accounts to pick from.
Without the cost burden of brick-and-mortar branches, online savings accounts can offer higher interest rates without the fees.
Avoid paying tax on your earned interest – up to a set amount – when you put your money into a TFSA.
Get a little help setting money aside with these innovative apps that automate saving.
Put your money in the hands of a financial institution whose owners are its customers.
Put your business on the path to meeting its financial goals with an account tailored to the business world.
Help your kids learn the habit of saving early in life with an account fit for them.
Graduate your student’s savings account to one that can handle high school and college or university.
How you’ll apply for a savings account depends on the bank or financial institutions you’re interested in. Generally, you’ll follow a standard series of steps like this:
The amount of money you accumulate in your savings account will vary depending on your goals. Here are a few popular reasons for saving money and how much you might want to keep in your savings account.
Beyond the variations of savings accounts available on the market, you have more complex options that can offer higher returns if you meet specified conditions.
Locked in for a specified amount of time, a GIC can help you earn more interest in a shorter period of time. But your money won’t be accessible until the GIC matures – unless you’re willing to pay a fee.
After you’ve narrowed down the savings account that’s right for your needs and budget, get the most out of it with our easy tips.
Savings accounts are one of many tools you can leverage to reach your financial goals. They include everyday savings accounts offering low fixed interest (such as the ones offered by popular banks) to high-interest accounts with no additional fees (like the ones offered by many digital banking providers). For each, the earlier you start saving, the more time your money has to grow.
Each type of savings account is designed to serve a different financial need. And with so many options at your disposal, weigh the benefits and drawbacks of each option to find the best fit for you. If you know what features you’re looking for, check out our guide to the best savings accounts.
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Earn interest on your savings and pay no monthly account fees with this basic account.
Earn a high interest rate on your US savings and pay zero monthly fees to sign up for this account.
Earn a high interest rate on your US savings and get six free debits per month when you sign up for this cross-border savings account.
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