The introduction of Wealthsimple Cash has brought good news to Canadian savers. With a savings rate of 0.90% and chequing account capabilities, Wealthsimple’s latest offering is primed to be competitive in the online banking world.
Wealthsimple Cash is not the only interesting news we have heard relating to high-interest savings rates. EQ Bank also recently upped rates on the EQ Bank Savings Plus Account.
Wealthsimple Cash is a one-of-a-kind financial account. It offers a great savings rate, has no monthly account fee or minimum deposit, offers bill payment, waives FX transaction fees, and will reimburse any ATM withdrawal fees.
This Wealthsimple Cash review covers everything you need to know.
What is Wealthsimple Cash?
Wealthsimple Cash is a savings and chequing account combined into one. In its previous iteration, this account was known as Wealthsimple Save.
The no-fee Wealthsimple Cash account pays a high-interest rate of 0.90% and comes with transfer, withdrawal, and payment capabilities that are traditionally associated with a chequing account. Essentially, this account is a hybrid between a savings and a chequing account.
Opening a Wealthsimple Cash account is easy and you can manage multiple Wealthsimple accounts via one platform.
Wealthsimple is Canada’s largest and most popular online wealth manager. Founded in 2014, Wealthsimple now has more than 175,000 clients and over $5 billion in assets under management.
Benefits of Wealthsimple Cash
A Wealthsimple Cash account is not your typical savings account. It also offers features and perks that are first of their kind in Canada for a spending account.
Currently available benefits of the account include:
1. High-interest rate: This account offers one of the best savings rates in Canada at 0.90% (non-promotional). This rate beats some of the best rates offered by the big banks by 85 basis points (0.85%) or more.
You can read more about the best savings rates in Canada here.
2. No monthly account fees: Save on account maintenance fees which can run up to a couple of hundred dollars when you match it up against a comparable chequing account at a traditional bank. Wealthsimple Cash also has no minimum deposit amount.
Benefits of the account that are coming soon include:
3. Free ATM withdrawals: You can use your account to make free bill payments and e-Transfers. In addition, you will be able to withdraw cash from ATMs across Canada for free. Wealthsimple will reimburse any ATM charges up to a limit.
4. No FX transaction fees: The account will waive foreign transaction fees incurred when you make purchases abroad or in foreign currencies. This is easily a saving of 2.5%.
5. A top-of-the-line metal cash card. You will be able to use your tungsten Visa card at ATMs. The card works like a prepaid or debit card.
6. Direct deposit: You can set up your account to directly deposit your paycheque.
7. Wealthsimple Cash is compatible with Apple Pay and Google Pay.
How To Open a Wealthsimple Cash Account
The great thing about a Wealthsimple account is that you can manage a variety of accounts on the same platform and you can also access these accounts using their mobile app.
For example, I’m able to view both my Wealthsimple Invest and Wealthsimple Cash for Business accounts when I log into my Wealthsimple account.
To open an account, you can sign up here and get a $50 cash bonus when you fund it with at least $500.
The online account opening process takes only a few minutes.
When the account balance across your Wealthsimple investment and cash accounts reaches $100,000+, you start to enjoy Wealthsimple Black privileges including:
- Lower management fees on your investment portfolio (0.40% vs. 0.50%)
- Tax-loss harvesting and tax-efficient funds
All Wealthsimple accounts also enjoy their Roundup and Overflow features.
Is Wealthsimple Cash Safe?
Wealthsimple Cash account deposits are protected by the Canadian Investor Protection Fund (CIPF) up to $1 million. This is made possible through membership via Wealthsimple’s custodial broker, Canadian ShareOwner Investments Inc. (ShareOwner).
As per CIPF’s website, if a member firm becomes insolvent, they will provide compensation for the value of the missing property as follows:
“For an individual holding an account or accounts with a member firm, the limits on CIPF protection are generally as follows:
- $1 million for all general accounts combined (such as cash accounts, margin accounts and TFSAs), plus
- $1 million for all registered retirement accounts combined (such as RRSPs, RRIFs and LIFs), plus
- $1 million for all registered education savings plans (RESPs) combined where the client is the subscriber of the plan.”
ShareOwner is also a member of the Investment Industry Regulatory Organization of Canada (IIROC).
Wealthsimple Cash vs. Wealthsimple Smart Savings
Wealthsimple Smart Savings was Wealthsimple’s first savings product. I reviewed the account here.
In 2019, Wealthsimple Smart Savings was rebranded as Wealthsimple Save for new clients and recently upgraded to Wealthsimple Cash in January 2020.
If you had previously opened a Wealthsimple Smart Savings account, you can open a new Wealthsimple Cash account and transfer your funds over if you so wish.
Some of the differences between Wealthsimple Cash and Wealthsimple Smart Savings are:
Interest Rate: The interest rate for Smart Savings was tiered based on your account balance. The offer by Wealthsimple Cash is a standard rate of 0.90%.
Fees: Wealthsimple Cash has no fees whereas a Wealthsimple Smart Savings account incurred a 0.25% management fee. The posted interest rate for Smart Savings is net of the fee.
Note that while your funds in Wealthsimple Cash are deposited with Canada’s largest banks, this account created for you at one of the Big-Six banks is not covered by CDIC.