Wealthsimple is Canada’s largest and most popular robo-advisor. Well known for its low-cost automated investment portfolios, the company is now also aiming to establish its place among financial institutions that offer Canadians some of the best savings rates in the country.
Interest rates on savings accounts have been in the doldrums for the better part of a decade, with accounts at the Big 5 banks offering clients no ‘real’ returns when inflation is taken into account. However, with the rise of online-only banks like EQ Bank and Tangerine, and digital wealth managers like Wealthsimple, savers now have a chance at earning premium interest rates.
**Wealthsimple Smart Savings is no longer being offered to new clients and has now been replaced by Wealthsimple Cash, a savings and chequing hybrid account that offers 2.40% interest rate and a host of other perks. Read my Wealthsimple Cash review.
Wealthsimple Smart Savings – Features and Benefits
Whether it is to keep your general savings or to hold your emergency funds, here are some of the benefits of a Wealthsimple Smart Savings account:
1. High-Interest Rates: The account pays a premium to the savings rate being offered by the big banks. Currently, the Smart Savings account offers a 2% interest. This rate is not an introductory or teaser rate and is standard on your deposits up to $100,000.
2. Zero Fees: The posted interest rate is what you get and there are no hidden fees. Wealthsimple’s Smart Savings comes with unlimited free withdrawals.
3. Deposit Insurance: Your funds are protected by the Canada Deposit Insurance Corporation up to $1,000,000. Wealthsimple splits up your money between multiple CDIC member institutions including TD, RBC, CIBC, National Bank of Canada, Equitable Bank, Bank of Nova Scotia, ADS Canadian Bank, and B2B Bank.
4. Joint Savings Accounts: Joint Smart Savings are available and are independent of individual Smart Savings accounts meaning that you can earn the posted high-interest rate on up to $100,000 for both accounts. CDIC protection for Joint Smart Savings is up to $500,000.
5. Wealthsimple Black Perks: If your assets (investment portfolio and/or savings) exceed $100,000, you become eligible for premium benefits including:
- Access to VIP airline lounge at more than 1,000 airports around the world using a complimentary Priority Pass membership.
- Lower fees (0.40% vs. the regular 0.50%) on your investment account. No fees are levied on Smart Savings.
- Free tax-loss harvesting service.
- Free financial planning
6. Automated Savings: You can easily automate your savings using the Wealthsimple Overflow feature. Choose your preferred savings schedule and amount, and they take care of the rest.
Want to start saving in a high-interest account? Open a Wealthsimple Cash Savings account here. It only takes 5 minutes!
If you prefer to open a Wealthsimple Investment Account and save on investment fees, you can sign-up here. Wealthsimple is offering my readers a special opportunity to invest up to $10,000 FREE for 1 year.
High-Interest Savings Accounts in Canada
The interest rates offered on savings accounts at the Big 5 banks are ridiculously low. You’d be surprised that some savings accounts still offer as low as 0.05% per year! When your money earns this kind of low-interest rate, it loses some purchasing power (after you factor in inflation rates).
For high-interest savings rates, Canadians increasingly have to look at online-only banks and credit unions. Here are some of the best savings rates available today:
EQ Bank Savings Plus Account: Offers 2.45%. This account functions like a hybrid between a savings and a chequing account. It comes with unlimited free transactions, no monthly fees, zero minimum balance, and mobile cheque deposits.
Wealthsimple Cash Savings: Offers 2.40%. This account will also offer free withdrawals, bill payments, ATM transactions, no FX fees, and a tungsten (metal) debit card.
Tangerine Savings Account: 2.75% 6-month promotional rate and 1.10% thereafter. It comes with zero fees, unlimited transactions, and an automatic savings program. They also offer TFSA and RRSP savings accounts.
Wealthsimple Smart Savings: Offers 2%, no minimum balances, zero fees, and free unlimited transactions. Access to premium wealth management service at a low cost. *This account is no longer being offered.
Credit Unions: There are a bunch of credit unions offering great savings rates in Canada including Motive Financial, Implicitly Financial, Ideal Savings, Hubert Financial, and Achieva Financial.
Wealthsimple Smart Savings FAQs
How long does it take to withdraw funds? It takes two business days to move money from your Smart Savings to your bank account. You can withdraw funds at any time without penalty.
What are the fees? Wealthsimple charges a 0.25% fee which has already been deducted from the posted interest rate. So what you see is what you get i.e. the 2% is what your money earns for you after fees have been accounted for. For their investment accounts, you pay 0.50% per year for assets less than $100,000 and 0.40%, if your assets exceed $100,000.
What’s the interest rate for Smart Savings? You currently earn 2% on deposits of up to $100,000. If your account exceeds $100,000, the excess amount earns interest at a slightly lower rate (weighted average), depending on what their partner banks are offering.
What other accounts does Wealthsimple offer? In addition to Smart Savings, Wealthsimple offers investment accounts for TFSAs, RRSPs, RESPs, LIRAs, RRIFs, corporate and joint accounts. They also offer Wealthsimple Trade which is a brokerage service that allows you to buy and sell thousands of stocks and ETFs commission-free.
How do I open a Wealthsimple account? Registering for a new account is easy and only takes about 5 minutes. Get started here.
Downsides of Digital Banking
The few downsides for accounts like the Wealthsimple Smart Savings apply to other banking you conduct with online-only banks and are:
Limited Face-to-Face: If you prefer to conduct all your banking directly in a physical branch, online-only banking may seem strange at first. That being said, most financial transactions can now be completed online from the comfort of your home, hence, the increasing popularity of financial institutions like Wealthsimple.
Bank Transfers may take longer. Currently, if you want to move money from your Smart Savings account to your chequing account at your traditional bank, it takes 2 business days. This will likely not be a big deal for most people, however, it is worth noting.
On the flip side, the advantages of digital banks outnumber their disadvantages, with benefits including better interest rates, zero fees on savings and chequing accounts, interest earnings on chequing balances, lower fees on other banking services, etc.
It should be apparent by now that I’m all for maximizing the returns you can earn on your money. For some of the best savings interest rates in Canada, you need to look beyond the big banks. Take advantage of the higher rates available from financial institutions like Wealthsimple and EQ Bank and watch your money grow.
Wealthsimple Smart Savings Account Review: High-Interest Savings in Canada
Wealthsimple Smart Savings account offers one of the best high-interest savings accounts in Canada. This review shows the benefits of the account including high-interest rates, zero fees, free unlimited transactions, and automated savings.