EQ Bank Review: High Interest Savings & No Monthly Fees (2019)

EQ Bank is a Canadian digital bank that has been around since 2016 and is currently offering 2.30% interest rate on their EQ Bank Savings Plus Account.

Now that’s one of the highest interest rates in Canada and easily beats what all of the big 5 banks are offering.Thus, EQ Bank is one of the best high interest savings accounts in Canada.Let’s get started. 

What Is the EQ Bank All About? 

EQ Bank is a Canadian online bank that offers a high-interest savings account and offers one of the best high savings interest rates available today.

Since EQ Bank is relatively new, some potential clients tend to be suspicious of the high rates being offered.

It’s no secret that interest on savings accounts has been depressed since the last financial crises. After a decade of rock bottom interest and inflation rates due to weak global economies, real returns on cash deposits have either been negative or at best insignificant.

The increasing adoption rates of digital banks (like EQ Bank and Tangerine) among Canadians definitely has some correlation with the better savings interest they offer compared to the big banks.

In addition to the better rates, the savings accounts often also give depositors access to no-fee and no-minimum balance banking with unlimited free transactions. Some digital banks also offer cash bonuses on sign-up and no-fee, interest-earning, checking accounts.

eq bank

Who Are The EQ Bank?

EQ Bank is a trademark of Equitable Bank, a federally regulated Schedule I bank with over 600 employees and $25 billion in assets under management. Equitable Bank was founded in 1970.

As an online-only bank, EQ Bank has no brick-and-mortar locations, resulting in lower operating costs. These savings are what translate into the high-interest rates and no-monthly-fee accounts they are able to offer their customers.

The good thing is, EQ Bank is owned by Equitable Bank who has been operating in Canada for over four decades. EQ Bank is focused on providing a better banking experience that will help Canadians reach their savings goals faster. Here’s my EQ bank review of their Savings Plus Account.

EQ Bank TFSA Account 

If you are a Canadian resident 18 years of age or older with a valid Social Insurance Number (SIN), you are eligible to open a Tax-Free Savings Account. All the interest earned on your eligible contributions are tax free. The Annual TFSA eligible contribution limit is $6,000.

TFSA Investment Options

  • Short-Term Deposits – 30 through 364 days: Interest Paid at Maturity

  • Guaranteed Investment Certificates in terms from one to five years with interest payable* :

    • Monthly (Direct Deposit Only),

    • Quarterly,

    • Semi-annually,

    • Annually, or

    • Compounded annually

If you would prefer to not withdraw, you may reinvest the interest earned in the GIC at the contract rate:

  • At maturity the amounts can be automatically re-invested until a written request to withdraw the full or partial amount of the deposit is received

Minimum TFSA Deposit Amounts at EQ Bank

  • Short-Term Deposits $500.00

  • GICs $500.00

At maturity the principal amounts can be automatically re-invested until a written request to withdraw the full or a partial amount of the deposit is received.

Contributing to Your TFSA

  • Cheque Payable to Equitable Bank

  • Partial withdrawals from an existing Equitable Bank investment for contribution to an Equitable Bank TFSA (continuing the same terms) will be available at any time

TFSA Withdrawals

  • All withdrawals of principal must be requested in writing.

Canada Deposit Insurance Corporation (CDIC)

All products eligible for Equitable Bank’s Tax-Free Savings Account are eligible for coverage under CDIC’s deposit insurance program subject to CDIC’s limits and policies.

eq bank

Types Of EQ Bank Accounts

EQ Bank offers 2 main accounts that give customers a chance to earn better-than-average interest rates on their cash deposits. 

1. EQ Bank Savings Plus Account

This is the high-interest savings account offered by EQ Bank, with a current interest offer of 2.30%. The interest rate of 2.30% significantly beats rates on savings accounts offered by the big banks, and also easily ranks as one of the highest savings interest rates among their online-only banking competitors.

Some great features of the EQ Savings Plus Account include:

  • High-Interest Rates: Currently 2.30%. Interest is calculated daily and paid out monthly

  • Zero Minimum Balance

  • Zero Monthly Fees

  • Unlimited Free Interac e-Transfers

  • Unlimited Bill Payments

  • Free Electronic Funds Transfer

  • Free and Unlimited Day-to-Day Transactions

  • 10 Free Linked Accounts

  • Free Mobile Cheque Deposits

  • Mobile Banking App

  • Customer Service that is available 7 days a week (8 am – midnight EST)

A major feature I like about EQ Bank’s savings account is its versatility. Although they do not offer a checking account, you can use their savings accounts in a lot of similar ways, including to pay bills, transfer money between accounts at different banks, set up recurring or pre-authorized transfers and bill payments, deposit cheques, etc.

EQ Bank does not currently offer a dedicated TFSA savings account.

2. EQ Bank GICs

A Guaranteed Investment Certificate (GIC) is similar to a savings account and offers you a fixed percentage of interest that is paid on pre-determined dates. One of the main differences between a savings account and a typical GIC is that for a GIC, you may not be able to withdraw your funds until maturity.

GICs are a great way to save towards short-term goals since they come with very low risk and offer guaranteed returns. You also earn a bit more than when you just park your money in a savings account.

EQ Bank’s GICs have interest rates that are very competitive and they beat what is currently on offer by the competition. Here are their current GIC offers:

  • 3 months: 2.35%

  • 6 months: 2.45%

  • 9 months: 2.55%

  • 1 year: 2.70%

  • 2 years: 2.85%

  • 3 years: 2.95%

  • 4 years: 3.05%

  • 5 years: 3.20%

A summary of the great perks offered by EQ Bank’s GICs include:

  • Competitive Interest Rates

  • No-Fee Banking

  • Mobile Banking App

  • Real-Time Updates and a Contact Center that is available 7 days a week (8 am – midnight EST)

Signing up for an account with EQ Bank is pretty easy, and you should be ready to start saving within a few minutes.

Benefits of the Equitable Bank HELOC

Equitable Bank’s HELOC has a number of options for anyone looking to unlock equity in their residential property:

  • No annual fee on your Access Card

  • Complimentary initial set of HELOC cheques

  • No standard processing fee on your HELOC cheques

  • No fee for having a zero balance

  • No fee for the current month’s statement

  • Monthly payment as low as interest-only

  • Free online account access

  • Use your Access Card for purchases anywhere Visa is accepted, and for cash advances from ATMs displaying the Visa and/or Plus logos.

EQ Bank VS Others – Rates Comparison

When Canadians decide to bank with a digital bank, it is usually because they are seeking higher returns on their savings and/or they are fed up with paying ever-increasing checking account fees.

Here’s a quick look at the best savings rates on offer by some big banks and online-only banks as of today:

  • EQ Bank: 2.30% 

  • Implicitly Financial: 2.10%

  • Alterna Bank: 2.05%

  • Tangerine Bank: 1.25% (Promotional rate of 3% for 6 months)

  • Wealthsimple: 1.70%

  • Oaken Financial: 1.50%

  • Motive Financial: 1.50%

  • ICICI Bank: 1.35%

  • Simplii Financial: 1.25%

  • RBC: 1.05%

  • Scotiabank: 1.05%

  • CIBC: 1.05%

  • TD: 0.50%

How Safe is EQ Bank? 

EQ Bank is a trademark of Equitable Bank. Equitable Bank is a member of Canada Deposit Insurance Corporation (CDIC) and this means your funds are eligible for deposit insurance, subject always to maximum coverage limitations.

CDIC insures GICs as well as long as they do not exceed a maturity term of 5 years. The maximum GIC term offered by EQ Bank is 5 years.

How EQ Bank is Able To Offer Such High Interest Rates

Same reason that other digital banks are able to offer better rates than the big banks – lower overhead costs!

Since they do not have to build or manage branches across the country, overhead costs are greatly reduced. These savings are passed on to customers in the form of higher interest rates and no monthly fees.

Quick Recap About EQ Bank (FAQ’s)

Who owns EQ Bank? EQ Bank is owned by Equitable Bank which is a federally regulated Schedule I Bank that has over 650 employees and over $26 billion in total assets under management. Equitable Bank is a wholly owned subsidiary of Equitable Group and is listed on the Toronto Stock Exchange as EQB.

Does EQ Bank offer a TFSA account? No, EQ Bank does not currently offer a TFSA account.

The Bank has an App? Yes, EQ Bank has an app that makes your online banking easy on the go. They recently relaunched the app on App Store and Google Play with new and innovative features including fingerprint ID and facial recognition sign-in, as well as an overhauled user-friendly dashboard.

Does EQ Bank have a debit card? No. However, their savings account works similar to a checking account in that you can deposit cheques, set-up direct deposits, pre-authorized debits, bill payments, Electronic Funds Transfers, and more.

What are EQ Bank’s GIC rates? They offer some of the best GIC rates available in Canada today. You can check them out here.

Other Banking Needs

There are many reasons why you use a bank. For example, you may want to open a TFSA, RRSP, RESP or other registered and non-registered investment accounts. As such, EQ Bank is not a replacement for all your traditional banking needs.

The idea is to ensure your money is always working for you and that you can maximize your returns. EQ Bank is a great option for competitive savings and GIC interest rates.

Saving up an emergency fund? Saving for a home down payment, wedding, or vacation? Want to invest the conservative portion of your investment portfolio in a GIC while getting the best returns possible? These are all scenarios where an EQ Bank account could serve you well.

Investing accounts like RRSP and TFSA can remain at your other bank or if you want to save on fees on these as well, you can try the services of a Robo-Advisor.

Conclusion 

Depending on your banking needs, banking with EQ Bank comes with its own downsides. These downsides include a lack of access to a brick-and-mortar location if you are old school, some limits on daily electronic transactions, a lack of a TFSA account, and lack of a debit card or joint accounts.

None of these should be of much concern to you if you plan to use EQ Bank mainly for your general savings. As of this review date, the best non-promotional savings rate I found across Canada is offered by EQ Bank at 2.30%. This better rate speaks for itself and it means more money in your pocket.

Please let me know your thoughts and comments below. 

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