It wasn’t that long ago that I was able to get a decent interest rate on my savings plus accounts at my main personal bank. Decent meaning more than inflation.
Fast forward a few months, and we’re now in the midst of a recession. The Bank of Canada has lowered the bank rate to record lows, and as a result, the banks who were at one time competing with decent interest rates on GICs and other savings vehicles, are barely offering anything above 0%.
It’s like a war on savers.
It’s a challenge to find any sort of decent yield on fixed income or savings. GIC rates are at record lows, and as a result, the banks have lowered their interest rates across the board.
And that brings me to the point of this article.
I recently came across an ad for EQ Bank and its 1.70%** (effective August 21, 2020) high-interest savings account which is one of the best interest savings rates I’ve found. I was interested for myself, and even more so for my mother, who I help with her investments.
At the time, I wasn’t really looking for a new bank, but, in the back of my mind, the low-interest rates were bothering me (and my mother’s been bugging me to find her a better solution).
So, I signed up for an EQ Bank account, first for me, and then for my mother.
Why have I switched some of my banking to EQ Bank?
EQ Bank has a savings account called the Savings Plus Account that pays 1.70% on my savings.
At this point, I have switched most of my daily bank transactions over to EQ Bank, plus, considering the 1.70% interest on the high-interest savings account, I have left a decent float in my account.
Best of all, there’s no minimum deposit or everyday banking fees, EQ Bank provides unlimited Interact e-Transfers®, and deposits are CDIC insured, which in Canada, means that any deposit up to $100,000 is insured by the Canadian Government in the event of bank insolvency.
I’ve had my account open for the last two-months and considering my mother’s aversion to risk and the fact that she’s just looking to maintain her savings and not invest, I’ve opened an account for her as well.
Since EQ Bank doesn’t offer foreign exchange services, cheques, RRSP (registered retirement savings account), or TFSA (tax-free savings account), and everything is digital, for some people, they will still need to maintain an account at a regular brick and mortar bank. You can however set up bill payments, do direct deposits, and Interac e-Transfers®.
It’s also important to note that EQ Bank doesn’t have an online trading platform. For that, you’ll want to consider Questrade, or something similar (you can read my Questrade review here).
With regards to my mother, she’s using EQ Bank as a place to park money, pay her bills electronically, and she’s taking advantage of the 1.70% savings rate.
By the way, EQ Bank does offer a joint bank account option as well.
And with all of the above in mind, I will dive into the EQ Bank review.
What is EQ Bank?
Since I was only vaguely familiar with the bank, I had to look them up before “jumping in”.
EQ Bank is an online bank (digital-bank with no branches). They are a trademark of Equitable Bank. Equitable Bank is Canada’s 9th largest bank. Equitable Bank launched EQ Bank in 2016, and today, EQ Bank has over $3 billion in deposits.
ion in deposits, so, they’re a decent size player in the Canadian market.
EQ offers two products:
- High-Interest Savings Accounts called Savings Plus Account
- GICs – Guaranteed Investment Certificates
As I mentioned above, EQ Bank does NOT offer registered savings accounts, such as TFSA (tax-free savings accounts), or RRSPs (registered retirement savings plans). The account(s) that you open, and manage are savings accounts.
And that begs the question … what are the main benefits and features of banking with EQ Bank?
Is EQ Bank Safe, and is EQ Bank CDIC Insured?
For those of you not familiar with the CDIC (Canadian Deposit Insurance Corporation), it is a Canadian crown corporation, meaning, it is a not-for-profit federal institution designed to provide protection to consumers for bank deposits. Equitable Bank is a member of CDIC and your funds are eligible for deposit insurance
What does CDIC insure?
- savings, savings plus account, and chequing accounts
- Guaranteed Investment Certificates (GICs)
- Foreign currency (USD for example)
What does CDIC does not insure?
- mutual funds
- exchange-traded funds (ETFs)
- cryptocurrencies (bitcoin, etherium for example)
The reason I mention the above is to explain that EQ Bank, through its online bank platform, is CDIC insured. So, in the unlikely situation that something should happen to the bank, then your funds will be protected up to the CDIC limit.
How is the EQ Bank Customer Service?
Since EQ Bank is a virtual bank with no branches, in order to get service, you must call them.
In order to test the EQ Bank customer service, and speed with which EQ Bank answered their toll-free number, 1-844-437-2265, I called and then timed the length of time between the first ring, and the length of time it took to get an individual on the line. I did this twice, once during the morning at 10 am, and then another on a different day at 2 pm.
The hold times for both calls was about the same at approximately 10-minutes, and both interactions were very pleasant. I explained to the person that I wanted to do an international money e-transfer, and in both cases, they were helpful, even offering to walk me through how to do this online. I explain the EQ Bank Transferwise service below.
Benefits and Features of EQ Bank
As a summary of some of what I covered above, from an EQ Bank review perspective, they are as follows:
Pros:
Pros:- No everyday banking fees, no monthly fees – the Savings Plus Account has no monthly account fees. Interac e-Transfers® service are free as are bill payments.
- High-interest rates on Savings Plus Account
- Free Transfers – free Interac e-Transfers® and bill payments
- Inexpensive money transfers through TransferWise where you can transfer up to $9,500 every 24-hours
- Easy to use website
- Convenient mobile app (see the image of the mobile app above)
- Zero minimum balance
- Up to 10 free linked accounts
Cons:
- No foreign exchange services
- No physical branches or ATMs – not able to get physical money (currency)
- No debit card
- No credit card
- No registered products (TFSA, RRSP, RRIF)
- Not available in Quebec
How EQ Bank’s Transwise Service for International Money Transfers Works
In order to facilitate international money transfers, EQ Bank has a partnership with Transferwise. Transferwise is a fairly large firm that facilitates over $3 billion of money transactions per month.
You need to set up a Transferwise account through the EQ Bank portal, and once done, you can use the international money transfer services for all EQ Bank online transfers. There is a maximum amount of money – $9,500 per day (24-hour period) that you can transfer.
The bank uses the “real” exchange rate which is available on the EQ Bank site, and you can transfer up to 70 countries, and 32 currencies.
How to Sign up to EQ Bank
Click here to sign up for an EQ Bank’s Savings Plus Account, or Savings Plus Account You can follow the instructions below for a step-by-step.
EQ Bank’s Savings Plus Account – High-Interest Savings Account (HISA)
Most traditional savings plus accounts at most of the major banks have high-interest rates savings accounts, but, the paradox is that the accounts don’t pay “high-interest”. In fact, at 0.5% or less, I would barely call them an interest-bearing vehicle.
With EQ Bank you can do a free number of withdrawals and transactions, bill payments, Interac e-Transfers®, and transfer between accounts. Plus, you don’t need to maintain a minimum balance or a minimum amount of money in the account.
It is possible to connect your EQ Bank account with your daily bank account to allow for easy transfer between your accounts.
GICs – Guaranteed Investment Certificate
At the time of writing, in late July 2020, EQ Bank’s GIC rates were competitive, but, for the most part, less than the1.70% you can get on their high-interest savings account. For example, their rates are as follows:
- 1 Year EQ Bank GIC Rate = 1.5%
- 2 Years EQ Bank GIC Rate = 1.5%
- 5 Years EQ Bank GIC Rate = 1.8%
- 6 Years EQ Bank GIC Rate = 2.3%
- 10 Years EQ Bank GIC Rate = 2.7%
Considering they are offering1.70% on the HISA (high-interest savings plus accounts), if your investment horizon is short term, it makes sense to leave the funds in their HISA account. Keep in mind that the 1.70% rate isn’t guaranteed and can be changed at any time, whereas with the GIC rate, the amount is guaranteed.
Next, I’m going to review how to signup for the account:
How to Sign-Up to EQ Bank Account:
The process is really simple, actually. You create an account profile with your email address.
The system proceeds to the next screen where you enter the balance of your personal details.
Connect Your Bank Account to EQ Bank
As part of the signup process, EQ Bank will ask you to connect your existing bank account to their system (Note, the image below shows only 4 banks, but, there are many more on the EQ Bank portal).
Once you’ve verified your email address, your account is now open. The total setup time is under 5 minutes.
What Kind of Banking Can You Do With EQ Bank?
As you can see from the screenshot below, the bank savings offers the following inside their portal:
- Pay a bill
- Move money between accounts
- Send an Interac e-Transfer®
- Buy a GIC
Pay a Bill from Your High-Interest Savings Account:
Paying a bill through EQ Bank is the same as any other bank. First, you set up the biller, in my case have a dozen or so, and then you choose “pay a bill” from the left-hand menu option. You choose the amount, click NEXT, and then you’re done.
Interac E-Transfer®
EQ Bank offers no fee Interac e-Transfers®. Like the bill paying, the process to do an Interac e-Transfer® is quite straight forward.
Buy a GIC:
You can buy a GIC online as well. The process is quite straight forward. You choose the “BUY A GIC” from the left-hand menu, enter the amount and period, choose whether to pay the interest rates at maturity or annually, click SUBMIT, and you’re done. The minimum amount for a GIC is $100.
EQ Bank FAQs
Is EQ Bank Safe:
Yes, EQ Bank (and Equitable Bank) is safe. Similar to most Canadian banks, your cash and GICs are are eligible for deposit insurance. EQ Bank is brought to you by Equitable Bank, Canada’s 9th largest bank
Who Owns EQ Bank?
How Long Does an EQ Bank Transfer Take?
Does EQ Bank Have a Debit Card?
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