EQ Bank’s U.S. Dollar Account will change the landscape for foreign currency bank accounts in Canada for the better.
If you earn income in USD or have searched for places to park your US dollars vacation fund or savings, you understand the struggle.
Some options offered by the big banks involve opening a USD chequing account and paying a monthly maintenance fee when you don’t keep a minimum balance. For example, I pay $4.95 per month for my personal USD account when the balance falls below $3,000.
It’s not just the fees though. I also don’t earn interest on this balance and haven’t earned any interest for a while.
Well… it paid 0.01% interest for a bit before scrapping it entirely. Not much of a difference, eh?
Even when you open a dedicated U.S. Dollar Savings Account, the interest rates are generally in the 0.01% to 0.10% range. And you better be prepared to pay a fee for every transaction.
It is this combination of dismal interest rates and transaction fees that goes hand-in-hand with the big bank offerings that make the EQ Bank US Dollar Savings Account exceptional.
What is EQ Bank?
EQ Bank is a popular online bank launched in 2016. It is owned by Equitable Bank, a Schedule I bank with more than $36 billion in assets.
EQ Bank has more than $5 billion in deposits and offers its customers access to innovative financial products including:
- Savings Plus Account: A hybrid account (chequing + savings) that pays 1.25% on every dollar and has no monthly fees. This free account also includes free Interac e-Transfers, unlimited bill payments, and free Electronic Funds Transfers. A 1.25% interest rate is up to 125x what many big banks are offering right now!
- TFSA Savings Account: Pays 1.25% interest that’s tax-free and has no monthly fees or minimum balance requirement.
- RSP Savings Account: You can easily set up a retirement savings account and earn a competitive interest rate.
- Guaranteed Investment Certificates (GICs): You can invest your money at guaranteed rates for a length of time that suits your needs (3 months to 10 years).
EQ Bank U.S. Dollar Savings Account
Similar to the CAD-denominated Savings Plus Account, the EQ Bank US Dollar Account offers a high interest rate.
You will earn 1.00% interest on every dollar and pay no monthly fees.
What this means is that you no longer get to just hold USD (and avoid FX conversions and markups), but you can also watch your money grow over time.
Below is a summary of what you can expect from this account:
- 1%* interest rate
- No monthly account fees
- Free and unlimited USD to USD transfers within Canada
- Easy process to fund your USD account using Canadian dollars
- Fast and competitively priced international money transfers using USD dollars via Wise (no hidden fees)
- Eligible for CIDC protection
How To Open an EQ Bank US Dollar Account
The process for opening an EQ Bank US Dollar account is straightforward and takes only a few minutes.
To start, you must first open a free Savings Plus Account online.
The requirements for this account are that you must:
- Be a Canadian resident
- Be at least the age of the majority in your province
- Have a Social Insurance Number
Once your EQ Bank Savings Plus Account is set up, you can easily open your US dollar Account directly from your dashboard.
EQ Bank is available using a web browser or their mobile app.
Benefits of an EQ Bank US Dollar Account
The main benefit of this account is that you earn interest rates that beat the big bank’s hands-down.
Think 1.00%* vs. 0.01%!
In addition to this, transfers from your account to other accounts within Canada are free.
You can also send US dollars to recipients in the United States or abroad using Wise (formerly TransferWise), one of the cheapest ways to send money abroad.
Lastly, funds deposited in this USD bank account are eligible for Canada Deposit Insurance Corporation (CDIC) protection.
Downsides of an EQ Bank USD Account
EQ Bank is not available in Quebec, so residents of this province are unable to take advantage of this service.
This account only applies to personal savings which is a bummer as it would be nice to get similar great rates for USD business savings accounts.
Related: USD Account Options for Canadians.
EQ Bank USD Account vs. Alternatives
Wondering what the big five banks are offering on their US Dollar account? As of August 30, 2021, here’s what I found:
- TD U.S Daily Interest Chequing Account: 0.01%
- RBC U.S. High Interest Savings: 0.05%
- BMO U.S. Dollar Premium Rate Savings Account: 0.05%
- CIBC US$ Personal Account: 0.05%
- Scotia U.S. Dollar Daily Interest Account: Up to 0.05%
The Tangerine US Dollar Savings Account has a 0.10% interest rate.
All these rates pale in comparison to the 1.00% interest rate you get with an EQ Bank USD Account.
You can deposit USD or CAD from your linked Canadian financial institution and move CAD or USD between your EQ Bank savings accounts.
When you transfer US dollars from your EQ Bank US Dollar Account to a US dollar account abroad, you use the Wise international money transfer service and pay a highly competitive fee.
You need to first open a free Savings Plus Account. When this is fully set up, you can then open your US Dollar Account. None of these steps involves a fee – nada!
The USD money in your EQ Bank account is eligible for coverage up to $100,000 per category. The coverage combines the deposits you have across your individual Savings Plus Account, GICs, and US Dollar Account.