I kept getting this ad whenever I open my Simplii Financial banking app promoting a 5% interest rate for savings or deposits. Sounds like a good deal until I read the fine print. It is only a promotional offer which ends by April 30 2023. What the heck! I feel this is the cat and mouse game played between the customers and the banks. Or a tug of war. The banks think that very few customers would read the fine print of the short promotional period. Most people are so busy. Even if they realize, they might not bother to find another bank with better interest rate and move the money to.
That’s why I saved my emergency fund with another bank Motive Financials with 3% interest rates. I still keep Simplii Financial because of easy access to cash at every CIBC branch with an ATM. I have been a customer for 18 years. It was PC Financials before and then acquired by CIBC. My experience was generally good with Simplii except the low interest rates for deposit. If I need cash urgently, I can do a e-Transfer from Motive Financials to Simplii.
I just did a search for saving accounts with good interest rates just out of curiosity and found this comparison on Moneysense.ca. It seems that most with the 4% or high interest rate are only during promotional period of several months. Then, it dropped to around 1.5% or lower. One caught my eye was Oaken financial. 3.4% interest rate for deposit and insured by CDIC – Canadian Deposit Insurance Corporation. I have not used it myself. No idea how the customer experience is though.
It seems that the tides have turned. Due to the inflation and interest rates hikes, consumers have less money saved than pandemic period during which people received emergency relief fund and less opportunity to spend. Now the banks have to raise interest rates for deposits to attracts more savings.
Hope you save enough for emergency fund.
Worthfy Financial Literacy Counselling 