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 has 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 and Tangerine) among Canadians definitely has some correlation with 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 also offer cash bonuses on sign-up and no-fee, interest-earning, chequing accounts.
My EQ Bank review is positive and covers all you need to know about the bank including why I believe the bank is safe and legit.
Who is EQ Bank?
EQ Bank is a trademark of Equitable Bank, a federally regulated Schedule I bank with over 900 employees and $35 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 Review
EQ Bank offers 5 accounts (registered and non-registered) that customers can use to earn better-than-average interest rates on their cash deposits.
1. EQ Bank Savings Account Plus Account
This is the high-interest savings account offered by EQ Bank, with a current interest offer of 1.25%*.
The interest rate of 1.25%* 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 1.25%*. Interest is calculated daily and paid out monthly.
- Zero Minimum Balance
- Zero Monthly Fees
- Unlimited Free Interac e-Transfers®
- 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
- Customer Service that is available 7 days a week (8am – midnight EST)
- Cheap international money transfers
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.
For example, you can easily pay bills, transfer money between accounts at different banks, set up recurring or pre-authorized debits, deposit cheques, use electronic fund transfers, etc.
EQ Bank also offers a joint savings accounts you can co-own with a spouse or friend.
2. EQ Bank Tax-Free Savings Account
EQ Bank’s TFSA account offers one of the best interest rates on TFSA’s in Canada. Interest earned on your account is tax-free for life and you can make withdrawals at anytime without penalties.
For 2020, the TFSA contribution limit is $6,000, and the annual TFSA limit stays at $6,000 in 2021.
Benefits of an EQ Bank TFSA include:
- High-interest rate of 2.30%*
- Zero account fees
- No minimum account balance
- CDIC-protection up to $100,000
- Easy online sign-up
- Free withdrawals and tax-free returns
- It supports recurring automatic contributions
If you have been eligible to contribute to a TFSA since it was launched in 2009, your total contribution room in 2021 is $75,500.
3. EQ Bank Retirement Savings Plans
EQ Bank’s Retirement Savings Plans (RSPs) are great if you are looking for a low-risk place to park some retirement savings.
Similar to an RRSP, taxes are deferred on your account until you start making withdrawals. You also get tax deductions for contributions you make to your RSP.
Your RRSP contribution room is determined by your earned income and any unused contributions you have carried forward from previous years.
The annual RRSP contribution limit for 2020 is 18% of your income up to $27,230. In 2021, the maximum RRSP contribution limit is up to $27,830.
Some of the great features of an EQ Bank RSP Savings Account are:
- High-interest rate of 2.30%*
- Zero monthly account fees
- No minimum balance requirement
- CDIC-protection up to $100,000
- Easy online sign-up and access to a versatile mobile app
- Supports recurring contributions
How To Sign Up For an EQ Bank Savings Account
To open an account, you must be a Canadian resident, meet the minimum age of the majority in your province (at least 18 or 19), and have a Social Insurance Number (SIN).
You will need to provide a government-issued ID such as a driver’s license, passport, or permanent resident card.
If your government-issued photo ID does not show your current address, a proof of address document such as a recent utility bill, income tax assessment, or Canada Child Benefit statement may be required.
EQ Bank conducts a “soft” credit check during the sign-up process. This check does not affect your credit score.
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 and GIC accounts are not available to residents of Quebec.
4. EQ Bank Non-Registered GICs
A Guaranteed Investment Certificate (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 may 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: 1.50%
- 6 months: 1.30%
- 9 months: 1.25%
- 1 year: 1.30%
- 2 years: 1.30%
- 3 years: 1.40%
- 4 years: 1.60%
- 5 years: 1.80%
Some of the great perks offered by EQ Bank’s GICs include:
- Competitive High-Interest Rates
- No-Fee Banking
- A Versatile Mobile Banking App
- Real-Time Updates and a Contact Center that is available 7 days a week (8 am – midnight EST)
5. EQ Bank TFSA and RSP GICs
You can choose to hold GICs in your RSP and TFSA accounts instead of cash. EQ Bank’s TFSA and RSP GIC rates are:
- 3 months: 2.30%
- 6 months: 1.80%
- 9 months: 1.65%
- 1 year: 1.50%
- 2 year: 1.30%
- 3 year: 1.40%
- 4 year: 1.60%
- 5 year: 1.80%
EQ Bank Joint Savings Account
EQ Bank recently introduced a joint savings account that allows you to team up with up to 3 other people.
This option is great for those who want to track and manage their finances together with a friend, partner, spouse, or roommate, while earning high-interest rates.
Your joint account enjoys the same benefits and features as the individual savings account, including 1.70% interest rate, free and unlimited bill payments, Interac e-Transfers and electronic fund transfers.
In addition, you can have up to $500,000 maximum balance per customer.
EQ Bank vs. Tangerine and 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 16, 2021):
- EQ Bank: Up to 2.30%* (currently one of the best all-year rate)
- Tangerine Bank: 0.10%
- Wealthsimple: 0.75%
- Motive Financial: 1.25%
- ICICI Bank: 0.50%
- Simplii Financial: 0.10%
- RBC: 0.05%
- Scotiabank: 0.05%
- CIBC: 0.05%
- TD: 0.05%
IS EQ Bank Safe?
EQ Bank is a trademark of Equitable Bank. Equitable Bank is a member of Canada Deposit Insurance Corporation (CDIC) and this means your funds are eligible for deposit insurance, subject to maximum coverage limitations.
This coverage is generally up to $100,000 per insured category and per depositor.
CDIC insures GICs as well as long as they do not exceed a maturity term of 5 years. This coverage also extends to TFSA and RSP accounts.
EQ Bank and TransferWise
EQ Bank recently partnered with Transferwise so it could offer its customers access to cheaper international money transfer options.
Canadians lose billions of dollars every year in fees they pay to transfer money abroad. Using your EQ Bank Savings Plus account, you can now easily send money in 17 currencies to 46+ countries for less.
The real (mid-market) exchange rate is used and the small upfront fee you pay to Transferwise is often up to 8 times cheaper than what you would pay to the big banks.
You can transfer up to $9,500 every 24 hours using EQ Bank and TransferWise.
What About Your Other Banking Needs?
There are other reasons why you use a bank. For example, you may want to open a mutual fund account or trade stocks and ETFs. 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 for both registered and non-registered accounts.
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.
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 and the lack of a debit card.
None of these should be of much concern to you if you plan to use EQ Bank mainly for your general, TFSA or RRSP savings. With the EQ Bank Savings Plus, you get unlimited free transactions and bill payment and this feature can help you save on banking fees.
As of this review date, some of the best non-promotional savings rates I found across Canada are offered by EQ Bank at 1.25% to 2.30%. This better rate speaks for itself and it means more money in your pocket.
EQ Bank Frequently Asked Questions
Who Owns EQ Bank?
EQ Bank is owned by Equitable Bank which is a federally regulated Schedule I Bank that has over 900 employees and over $34 billion in total assets under management. Equitable Bank is a wholly-owned subsidiary of Equitable Group and is listed on the Toronto Stock Exchange as EQB.
Does EQ Bank Offer a TFSA Account?
Yes, EQ Bank has a TFSA savings account that holds both cash and GICs.
Does EQ Bank have an App?
Yes, EQ Bank has an app that makes your online banking easy on the go. They recently relaunched the app on App Store and Google Play with new and innovative features including fingerprint ID and facial recognition sign-in, as well as an overhauled user-friendly dashboard.
Does EQ Bank Offer an RRSP?
EQ Bank recently introduced Retirement Savings Plan Accounts you can use to save towards retirement similar to an RRSP. It holds both savings and GICs.
Does EQ Bank have a Debit Card?
No. However, their savings account works similar to a chequing account in that you can deposit cheques, set-up direct deposits, pre-authorized debits, bill payments, Electronic Funds Transfers, and more.
What are EQ Bank’s GIC Rates?
They offer some of the best GIC rates available in Canada today. You can check them out here.
Does EQ Bank have a Referral Program?
EQ Bank occasionally offers its customers an opportunity to earn cash bonuses when they refer friends to sign up. For example, they may offer $25 cash bonuses per friend or family that sign up using your code.
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.