EQ Bank is a Canadian online bank that offers a high-interest savings account and one of the best savings interest rates available today.
It’s no secret that interest on savings accounts have been depressed since the last financial crises. After a decade of rock bottom interest and inflation rates due to weak global economies, real returns on cash deposits have either been negative, or at best insignificant.
The increasing adoption rates of digital banks (like EQ Bank) among Canadians definitely has some correlation to the better savings interest they offer compared to the big banks. In addition to the better rates, the savings accounts often also give depositors access to no-fee and no-minimum balance banking with unlimited free transactions. Some digital banks as well also offer cash bonuses on sign-up and no-fee, interest-earning, chequing accounts.
EQ Bank Ratings Summary:
This is based on assessing several factors including Savings Account and GIC Interest Rates, Banking Fees, Customer Service Options, Convenience, and Overall Value.
About EQ Bank
EQ Bank is the direct banking arm of Equitable Bank, a federally regulated Schedule I bank with over 600 employees and $23 billion in assets under management. Equitable Bank was founded in 1970.
As an online-only bank, EQ Bank has no brick-and-mortar locations, resulting in lower operating costs. These savings are what translate into the high-interest rates and no-monthly fee accounts they are able to offer their customers.
EQ Bank Accounts
EQ Bank offers 2 main accounts that give customers a chance to earn better-than-average interest rates on their cash deposits. They are:
1. EQ Savings Plus Account
This is the high-interest savings account offered by EQ Bank, with a current interest offer of 2.30%. The interest rate of 2.30% significantly beats rates on savings accounts offered by the big banks, and also easily ranks as one of the highest savings interest rates among their online-only banking competitors.
Some great features of the EQ Savings Plus Account include:
- High Interest Rates: Currently 2.30%. Interest is calculated daily and paid out monthly.
- Zero Minimum Balance
- Zero Monthly Fees
- Five Free Interac e-Transfers per month
- Unlimited Bill Payments
- Free Electronic Funds Transfer
- Free and Unlimited Day-to-Day Transactions
- 10 Free Linked Accounts
- Free Mobile Cheque Deposits
- Mobile Banking App
- 24/7 Customer Service
A major feature I like about EQ Bank’s savings account is its versatility. Although they do not offer a chequing account, you can use their savings accounts in a lot of similar ways, including to pay bills, transfer money between accounts at different banks, setup recurring or pre-authorized transfers and bill payments, deposit cheques, etc.
2. EQ Guaranteed Investment Certificates (GICs)
A GIC is similar to a savings account and offers you a fixed percentage of interest that is paid on pre-determined dates. One of the main differences between a savings account and a typical GIC is that for a GIC, you may not be able to withdraw your funds until maturity.
GICs are a great way to save towards short-term goals, since they come with very low risk and offer guaranteed returns. You also earn a bit more than when you just park your money in a savings account.
EQ Bank’s GICs have interest rates that are very competitive and they beat what is currently on offer by the competition. Here are their current GIC offers:
- 3 months: 1.60%
- 6 months: 1.75%
- 9 months: 2.05%
- 1 year: 2.76%
- 2 years: 2.95%
- 3 years: 3.15%
- 4 years: 3.20%
- 5 years: 3.36%
A summary of the great perks offered by EQ Bank’s GICs include:
- Competitive Interest Rates
- No-Fee Banking
- Mobile Banking App
- Real-Time Updates and 24/7 Customer Service
Signing up for an account with EQ Bank is pretty easy, and you should be ready to start saving within a few minutes.
EQ Bank Savings vs Others – Rates Comparison
When Canadians decide to bank with a digital bank, it is usually because they are seeking higher returns on their savings and/or they are fed up with paying ever-increasing chequing account fees. Here’s a quick look at the best savings rates on offer by some big banks and online-only banks as of today (April 21, 2018):
- EQ Bank: 2.30%
- Alterna Bank: 2.05%
- Implicitly Financial: 2.00%
- Wealthsimple: 1.70%
- Zag Bank: 1.65%
- Oaken Financial: 1.50%
- Motive Financial: 1.50%
- ICICI Bank: 1.35%
- Tangerine Bank: 1.10% (Promotional rate of 2.50% for 6 months)
- Simplii Financial: 1.10%
- BMO: 1.40%
- RBC: 0.90%
- Scotiabank: 0.90%
- CIBC: 0.90%
- TD: 0.50%
Is EQ Bank Safe?
Equitable Bank which owns EQ Bank is a member of Canada Deposit Insurance Corporation (CDIC) and this means that your savings deposits at EQ Bank are insured for up to $100,000 should the bank ever go bankrupt.
CDIC insures GICs as well as long as they do not exceed a maturity term of 5 years. The maximum GIC term offered by EQ Bank is 5 years.
How is EQ Bank Able To Offer Higher Interest Rates?
Same reason that other digital banks are able to offer better rates than the big banks – lower overhead costs! Since they do not have to build or manage branches across the country, overhead costs are greatly reduced. These savings are passed on to customers in the form of higher interest rates and no-monthly fees.
What About My Other Banking Needs?
There are other reasons for why you use a bank. For example, you may want to open a TFSA, RRSP, RESP or other registered and non-registered investment accounts. As such, EQ Bank is not a replacement for all your traditional banking needs.
The idea is to ensure your money is always working for you and that you can maximize your returns. EQ Bank is a great option for competitive savings and GIC interest rates. Saving up an emergency fund? Saving for a home down payment, wedding, or vacation? Want to invest the conservative portion of your investment portfolio in a GIC while getting the best returns possible? These are all scenarios where an EQ Bank account could serve you well.
Investing accounts like RRSP and TFSA can remain at your other bank or if you want to save on fees on these as well, you can try the services of a Robo-Advisor.
Depending on your banking needs, banking with EQ Bank comes with its own downsides. These downsides include a lack of access to a brick-and-mortar location if you are old school, some limits on daily electronic transactions, and lack of a debit card or joint accounts.
None of these should be of much concern to you if you plan to use EQ Bank mainly for your savings. As of this review date, the best non-promotional savings rate I found across Canada is offered by EQ Bank at 2.30%. This better rate speaks for itself and it means more money in your pocket.