Thinking of opening a high-interest savings account or purchasing GICs but aren’t sure which bank’s products will fit your needs? This review breaks down what EQ Bank has to offer, so you can decide if EQ Bank is the right fit for you.
Photo by Soroush Karimi on Unsplash
No-fee digital bank accounts have grown in popularity and availability in recent years. It’s easy to understand why: You can always access them from the comfort of your home; they charge few to no fees because they don’t need to cover the costs of brick and mortar locations; and these high-interest savings accounts usually come with great rates, which makes them perfect for building your savings.
EQ Bank’s Savings Plus Account is a fantastic offering in this category (for personal banking only; they don’t offer business accounts). This account charges zero fees for everyday services, and it’s flexible, allowing you to transfer money and pay bills (so it operates similarly to a chequing account). Plus, its interest rates are competitive.
Having a high-interest savings account at EQ Bank also has the advantage of giving customers access to their GICs and inexpensive international money transfers.
Get more information about the EQ Bank Savings Plus Account*
EQ Bank is one of the newer players on the Canadian banking scene (they opened in January 2016), but their parent company, Equitable Bank, is the ninth-largest domestic bank in Canada, and has provided financial services since 1970—so this digital bank is backed by decades of experience. And any money that is deposited into EQ Bank, up to $100,000 in Canadian funds, is insured by the Canada Deposit Insurance Corporation (CDIC).
If you’re thinking about banking with EQ Bank, here are some quick facts to consider:
Pros:
Cons:
After you open an account with EQ Bank, you set up a link to a conventional bank account that you already hold and use Interac e-Transfer or an Electronic Funds Transfer to deposit money from that linked account into your EQ Bank high-interest savings account. You can also deposit cheques directly into your EQ Bank account using their mobile app.
From there, you can simply allow those funds to earn interest; purchase GICs; use your EQ Bank account to fund international money transfers; or pay bills.
You can also do the reverse—transfer any money you need out from your EQ Bank account to your linked account.
There are no fees for any of these transactions.
Rates and fees current as of July 14, 2020.
High-interest savings accounts (HISAs) are great for saving money for specific short- or medium-term goals.
Maybe you want to purchase a car or are saving for a down payment for a house. Or, perhaps you’d like to put aside money for taxes you estimate you’ll owe. A high-interest savings account is a good option for these uses because any money you deposit in the account earns a higher rate of interest than a typical chequing account, and it remains accessible to you anytime you need it.
Many of the big banks offer around 0.05% interest on their savings accounts. EQ Bank’s current interest rate is 1.50%—40 times as much! This account can help you meet your savings goals faster. EQ Bank savings account even manages to edge out many high-interest savings accounts from other online and traditional banks.
Additionally, you can set and track the progress of up to four goals with their online tool, which is free for account-holders to use.
This account is also flexible in that, while it doesn’t offer the ability to write cheques or spend with a debit card, it does operate as a hybrid account since you can use it for such daily transactions as paying bills or transferring or receiving money, while earning a high rate of interest. It’s the best of both worlds.
Another handy feature of the Savings Plus Account* is how little it costs to bank with one. In fact, there are no fees for everyday banking like paying bills, transferring money by Electronic Funds Transfers or sending or receiving funds via Interac e-Transfer. And there’s no minimum balance required to avoid fees, either.
Using this account is convenient. It’s accessible from anywhere in the world via online banking or its mobile app, and you can use the latter to deposit cheques directly into your account.
A relatively new feature with EQ Bank, the Joint Savings Plus Account allows you to add up to three people to one account. This means that you can simplify your shared saving or spending and, as with all EQ savings accounts, there are great interest rates with no fees.
EQ Bank’s Guaranteed Investment Certificate (GIC) rates are among the best in the industry—the 3-month GIC rate is currently at 1.50%—but only people who’ve opened an EQ Bank Savings Plus Account can buy them.
Aside from that one condition, EQ Bank GICs* are very accessible, since the minimum amount is just $100 per GIC (the maximum amount is $100,000). You can buy up to 20 GICs, choosing in an array of term lengths (the minimum is 3 months, the maximum is 10 years), so you can choose one that suits the timeframe of your investing goals, or put together several to create a GIC ladder.
It’s important to note that EQ Bank’s GICs are non-redeemable, which means you’ll pay a penalty if you cash them out early.
Wondering how much you’ll earn by purchasing an EQ Bank GIC*? Check out the free tool on their site that calculates that amount for you based on the term (and interest rate) you choose, as well as your investment goal’s time horizon.
** EQ Bank GICs with a term greater than 5 years are not insured by CDIC until April 30, 2020.
Get more information about EQ Bank GICs*
To facilitate international money transfers for its clients, EQ Bank has partnered with TransferWise, a third-party money transfer platform. Everything is integrated, so you can easily create a TransferWise account through your EQ Bank online banking account or mobile app, provided you have an EQ Bank Savings Plus Account*. And you can check the status of your transfer on the International Transfer dashboard on the site or the app.
Even though EQ Bank works with a third party to process transfers, the bank is committed to low pricing and pricing transparency. You’re only charged once, and the exchange rate is calculated on what’s called the real exchange rate, which you can look up on a calculator on the EQ site. There is no markup or commission charged on this rate. Based on these factors, EQ Bank says, their international money transfers are up to ‘8 times cheaper than other banks’.
There are some restrictions. Currently, you can send a maximum of $9,500 (CAD) per transaction every 24 hours, to your choice of 70 countries and regions in 32 currencies.
If EQ Bank’s high-interest savings account, GICs and international money transfers are tempting you, read on to find out what the requirements are to sign up for an account, as well as the process, which is quite straightforward.
Opening a Savings Plus Account* at EQ Bank is fairly simple; however, in order to sign up, you need to be a Canadian resident, be of the age of majority where you live, and have a Social Insurance Number (SIN). Unfortunately, Quebec residents aren’t able to bank with EQ Bank.
You will also need government-issued photo ID, and if that piece of ID doesn’t list your current address, you will have to provide a proof of address document, such as a recent utility bill or your most recent income tax assessment (a full list of options is posted on the EQ Bank site).
In addition, the account you plan to link to your EQ Bank account must be with an approved financial institution. Those include the Big Six Canadian banks, as well as several others, such as Tangerine, Laurentian and Vancity credit union. A full list of approved banks is available in the FAQ section of the EQ Bank site.
The first step when applying to open an EQ Bank account is to visit their website to start the process. Make sure you have your Social Insurance Number ready; it’s required information for anyone opening a bank account that earns interest.
To verify your identity, they will perform a soft credit check, which won’t affect your credit rating. If they’re not able to confirm your identity that way, you’ll need to visit a Canada Post outlet to verify that you are who you say you are. When you do so, you’ll be asked to show a piece of government-issued photo ID. If that ID doesn’t list your current address, you will also have to show a proof of address document, as well as what’s known as a Canada Post DSS number, which will be emailed to you.
Once everything is set up, you’ll need to connect your current bank account to EQ Bank to verify your identity and simplify money transfers. Your other account’s banking details are not shared with anyone, including EQ Bank, and the process is completely secure.
Get more information about the EQ Bank Savings Plus Account*
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No joint accounts – always planning… never doing!
It is unfortunate that EQ doesn’t have joint accounts. We were going to transfer money several months ago, but due to no facility for a joint account, didn’t proceed.
Can you please provide an alternative option for Quebec residents since EQ Banking is not available for Quebec residents.
Hi Guys
It is much better for you to place your money in a mutual fund – much higher interest and you can get your money back at any time with 24 hr notice. I found EQB’s service terrible. They are trying to increase their liquidity by taking your money. Put your money elsewhere. There are better options.
It is inappropriate to compare a Savings account at EQ Bank with a Mutual Funds account at a regular bank. Savings account carries no risk and no fees. Mutual funds carry risk and the fees are generally around 2.5%. It is actually not appropriate to invest in mutual funds these days and EQ Bank does have a Joint Account. Simplify your life by:
1. Banking: Do all your banking at an online-only bank like EQ Bank, but maintain a cheap regular bank account for cash withdrawals
2. Investing: Invest your savings at a Robo advisor (like Nestwealth or Wealthsimple) if you need someone to hold your hand or go with QuestTrade or QTrade. After you Emergency Fund is funded contribute to the fullest in RRSPs, RESPs, TFSas and invest only using index-based ETFs
3. Credit Card: Have only one credit card that pays cash-back
Kim – comparing mutual funds to EQ’s HISA is like comparing apples to oranges. Mutual funds often come with high MERs (2-2.5%) that eat away at any return one may make, which is not guaranteed. EQ’s HISA on the other hand has no fees, so a person can easily calculate their return using 2% and this return is not as volatile. I can only assume you are a financial advisor or some other broker who makes money by selling people mutual funds. Btw, Balanced ETF Portfolios (VBAL and XBAL) are far better than mutual funds, since their MERs are often cheaper (VBAL = .25% and XBAL = .20%), which makes ROIs higher.
Sumar – completely agree!
Is there a minimum time the money has to be in your account to earn the 1.7% rate and is there a penalty or fee for withdrawing at any time.
Early redemption of GIC’s due to Compassionate Reasons.
Warning about EQ Bank
I checked with my different banks about early redemption of GIC’s for care and living expenses of this awful, terminal disease called Cancer.
Being terminally ill with Cancer means nothing to EQ Bank, and they will not redeem your GIC early.
My first reach out to all the banks was in June and the EQ Bank response was this:
“Thank you for being a valued customer at EQ Bank.
Sorry to read about your recent health concerns. For early GIC redemptions, customers would need to send us any details regarding their hardship in a cover letter or e-mail format to “[email protected]”. All GIC redemption requests are reviewed and determined by our management team. ”
Looked promising right?
They have finally (after many emails on my part, they tend to ignore a lot) 4 months later made their decision: “Our Management has reviewed your request for premature termination of your GIC, but unfortunately has declined your request.” They knew in advance they were going to deny my request!
So just a heads up for ANYONE, EQ Bank DOES NOT HAVE COMPASSION FOR DYING PEOPLE. Do not give them your money, because if you die sooner than expected, you will never see the money you put in their care. It is not as if I was asking for a loan or charity, THIS IS MY MONEY TO BEGIN WITH. I was prepared to pay an early redemption fee.
How sad and pathetic is a company that won’t allow you to redeem early for medications and living expenses when you are terminal. If they are in financial difficulty and just don’t have it, just be honest with people and let them know. Supposedly they are very well funded, so why won’t they let me have my money back to live on? Of all the banks I checked with they are the only ones who don’t care if you are dying or not, and will not early redeem! Their email address is [email protected] Please stay away from this bank!!
Do you have a similar situation with your bank, please post it so we know who to stay away from!
Stuart Martin
Something to keep in mind if jumping into this. Be very aware of the amounts of money you are transferring. If you are like me you have a reoccurring deposit transfer amount (from another bank) which is kept ON HOLD for a few days. Triple… quadruple check that none of the total amount funds you wish to transfer is on hold. Otherwise you will get an NSF. Rookie mistake I know, but hope to save someone the $45 Tangerine just charged me for my own money. 20 months of interest lost just in that little caricature action by Tangerine. Tangerine (Owned by Scotiabank now) sucks, big, big, big time! EQ Bank has great rates.
How can nobody even answer a damn email…chat doesnt work…and I have been on the Phone for 90 mins and counting…this is soo bad.I just need help cancelling a etransfer..(code 000014061410).
Terrible service I will be closing my account after I get my $1000 E-transfer back unreal