Mylo and Wealthsimple are two of the best home-born and proud Canadian fin-tech companies that help you save and invest.
Here’s what they do – Both of these companies will automatically round up every purchase you make using your credit and debit cards (bank accounts) and invest the spare change in the portfolios you decide (growth, conservative, etc).
There’s no investment knowledge required, and you don’t have to change your lifestyle. In this article, let’s look at what Mylo is and compare it to Wealthsimple. Why do you need either? What are the important features and benefits (use cases) Mylo Offers other than the auto-investing program and vice versa?
You might have heard of Wealthsimple, it is the #1 most trusted and used auto-investing tool across Canada. To be frank, Wealthsimple is way superior to the likes of Mylo (Functionality wise, Simpler UI, Wealthsimple Trade, etc). Now that was a statement I just made, but does that make Mylo any less small in terms of people liking or using it? Absolutely not. I’ll show you why in this article.
Do I prefer Wealthsimple over Mylo?
To be fair and honest, I have used both for longer periods of time – again it all depends on what features you need and what works for you. Maybe you may be into Halal Investing, which others might not? All I am saying is simple – What I might like might not be good for you.
In this review of Mylo, I’ll be as honest as I can to help you decide. At the end of the day, it is your hard-earned money that should be useful to you, when you need it.
A quick note here – there are numerous other articles on this blog about Wealthsimple, BMO’s Smartfolio, InvestorLine, Wealthsimple Vs. Mylo, so do check them out when you get some time. I’m sure you will enjoy the content. Finally, with Mylo, you turn your spending habits into saving habits. Let us get started.
What Is Mylo?
Mylo was created with the social mission of helping Canadians achieve their financial goals. This online platform makes saving and investing accessible to everyone.
Mylo is an app that helps you save and invest. Mylo automatically rounds up every purchase you make and invest the spare change. There’s no investment knowledge required, and you don’t have to change your lifestyle. With Mylo, you turn your spending habits into saving habits.
Here’s a fun fact – Over half of Canadian millennials have less than $1,000 in savings, regardless of their income. Mylo’s actively working to fix that with a simple, automatic, and stress-free solution for saving money and building wealth.
It starts with roundups, but micro-saving is just the beginning. Mylo uses machine learning in conjunction with financial and transactional data to make personalized recommendations that help our users make smart decisions with their money.
Mylo was launched as an investment app in July 2017.
Today, the app has already been downloaded by over 500,000 Canadians from coast to coast.
What Is A Mylo Roundup?
A roundup is what Mylo calls the spare change on your credit and debit card transactions.
Automatically investing roundups is an easy way to save, and they add up quickly! Simply link your chequing account (funding source) and your debit and credit cards (roundup sources) to your Mylo account, and the system automates the process for you.
For example, If you spend $3.25 on a coffee using a linked credit or debit card, Mylo’ll automatically round up your purchase to the nearest dollar ($4.00) and put 75 cents aside in your Mylo account.
Every week on Monday, Mylo will add up all your roundups from the previous week, withdraw the total from your funding source (debit and credit card), and invest the money in your investment account. If you activate the in-app multiplier, you can accelerate your savings by multiplying your roundups by 2X to 10X.
How Does The Mylo Roundup Work?
Let me give you an example here. Just to make sure you understand what Mylo is all about.
When you buy a coffee you’ll pay 1.30 or 1.50. These auto investment apps will round up to the nearest dollar amount, in this case, $2. So, the system automatically adds $0.70 to your investment portfolio.
Again, that’s the basic plan I’m talking about – rounding up your purchases. You have other advanced levels where you can increase the round-ups and also bump up money every now and then.
Now just imagine, this keeps happening with all transactions throughout the day on all your bank accounts linked – you can link more than one bank account and multiple accounts within a single bank account – debit, credit cards etc.
How Do I Connect My Bank Account To Mylo?
Mylo needs a funding source to start rounding up your purchases.
Your investment account is funded by the bank account that you designate as your funding source, typically a chequing account.
If you want to use a savings account as a funding source, simply update your information in the app under Account and Banks.
You can fund your Mylo account by connecting it with a funding source, such as a chequing account, as well as any credit and debit cards you regularly use to make purchases. Every time you make a purchase with your cards, Mylo will round up the price to the nearest dollar and invest the spare change.
You can reach your financial goal faster by making a deposit in your Mylo account anytime. First, click on the goal in which you’d like to make a deposit. Next, hit the orange plus sign and select an amount to add to your goal.
How Does Mylo Work?
Mylo asks for a couple of starter questions during signing up.
Your answers provide the information that your portfolio manager needs to understand – your financial situation, your risk profile and your financial goals.
Using this information, your portfolio manager will recommend an investment portfolio that reflects your unique situation. Since your investment account is fully managed by a registered Canadian portfolio manager, you do not need any prior investment knowledge to use Mylo.
Is Mylo Safe To Use?
First of all, before answering this question you need to understand that there is a certain level of risk associated with any type of investment. In the case of Mylo, Tactex Asset Management invests your money in a well-diversified portfolio of low-cost ETFs, so your investment is far less volatile and risky than it would be if you were picking specific stocks on your own.
All the ETFs that you’ll be investing in are held in trust by a custodian at Mylo, which is insured by the Canadian Investor Protection Fund (CIPF).
The custodian for these funds is Fidelity Canada Clearing and our trustee is TMX Trust, who is a wholly-owned subsidiary of the Toronto Stock Exchange Group (TSX).
The only risky element you need to note here is that – while the funds in your Mylo account are insured and safe, your investment account itself is not CIPF insured.
Also, all Mylo accounts are audited by an international accounting firm annually.
Mylo Roundups For More Than One Financial Goal?
Mylo rounds up your purchases and will put the same amount of spare change in every financial goal that you have created. Now, imagine you are saving for a vacation and also donating to a charity.
If you buy a coffee for $4.50, Mylo will deposit 50 cents on both goals.
In other words, you’ll be putting $1 aside on a $4.50 purchase.
You can also disable or accelerate roundups for specific goals.
If you want to focus on your donation goal, for example, you can temporarily pause roundups on other goals. If you want to reach a goal faster, you can multiply roundups (by 2X to 10X) for an individual goal.
Is Mylo Really Free?
Mylo costs $1 a month and Mylo Advantage costs $3 a month. That’s it. No matter how much you invest. To make investing affordable and accessible to all, Mylo invests in exchange-traded funds (ETFs).
The companies that manage these funds typically charge a Management Expense Ratio (MER) that range from 0.05% to 0.37% for regular portfolios and 0.20% to 0.60% for SRI portfolios. These MERs are among the lowest in the industry.
Mylo does not make any money from MERs and will always invest your money in the most efficient investment vehicles.
Why Does Mylo Charge A Monthly Fee?
Your Investments at Mylo are managed by Tactex Asset Management.
The Mylo app is free to use, but your portfolio manager, Tactex Asset Management, will charge a low, flat fee of $3 a month for access to unlimited registered accounts, including TFSAs, RRSPs and any accounts made up of Socially Responsible Investment (SRI) portfolios.
That’s it. No matter how much you invest.
To make investing affordable and accessible to all, Tactex Asset Management invests in exchange-traded funds (ETFs). The companies that manage these funds typically charge a Management Expense Ratio (MER) that range from 0.05% to 0.37% for regular portfolios and 0.20% to 0.60% for SRI portfolios.
These MERs are among the lowest in the industry. Mylo does not make any money from MERs and Tactex Asset Management always invests your money in the most efficient investment vehicles.
Here’s what Mylo has to say about charging a Monthly Fee to end users:
“We Charge a flat monthly technology fee so we can develop Mylo to serve you better.
We never charge hidden fees or surprise costs, unlike other investment services, and we pride ourselves on working hard to keep costs as low as possible”.
How Mylo Invests Your Money?
Every Mylo account out there is managed by a Canadian portfolio manager at Tactex Asset Management, a subsidiary of Mylo Financial Technologies Inc.
So what does the portfolio manager at Mylo actually do? Where does he actually invest your money?
As I said earlier, Investment accounts opened through Mylo are non-registered by default.
However, they have plans to allow registered plans for your TFSAs and RRSPs in the near future.
At Mylo, the portfolio manager invests your money using a diversified portfolio of low-cost ETFs that is modeled after the Modern Portfolio theory.
Is Mylo Really Worth It?
If you ask me, yes Mylo is definitely worth it! That’s because you have nothing to lose here.
All you have to do is invest your spare change by connecting a couple of your bank accounts and the investment will grow over time without you having to do anything.
It’s plain simple.
And the withdrawal process is simple too, you’ll never have any hassles as such, it is a premium Canadian company!
In this section let’s take a look if Mylo’s monthly charges are really worth it and how does it work.
Like I said before, Mylo charges a flat fee of $1 per month to use their financial investment savings platform. Now, this fee is irrespective of the amount of money you have in your account. Be it $100 or $50000; it is still going to be a flat fee of $1 per month.
What Is Mylo Perks?
Mylo Perks are exclusive deals and discounts from brands that you already love.
Each month, Mylo’ll bring you valuable cashback rewards that will help you save on the brands, services and products that you most commonly use.
What Is Mylo’s Socially Responsible Investing?
Socially responsible investing (SRI) is the term used to describe investing that supports companies trying to make a positive change in the world.
Traditional investing considers factors that have an immediate financial risk, whereas socially responsible investing considers factors related to doing social and environmental good, too.
What Is A Mylo SRI Fund?
The investment objective of the Mylo SRI Fund is to provide long term capital growth by investing in a manner consistent with addressing the world’s major social and environmental challenges such as:
Gender diversity in the workplace
To achieve this investment objective, the fund will invest primarily in low-cost exchange-traded funds (ETFs) and units and/or shares of other investment funds managed by third-party managers selected to provide a risk-return profile similar to a well-diversified portfolio of Canadian large capitalization equity securities.
Mylo’s SRI fund may also invest in securities of non-Canadian issuers. These particular investments will generally be no more than 40% of the net assets of the fund and the fund may engage in derivatives transactions to hedge against changes in currency exchange rates.
The fund may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes in a certain market or economic conditions.
How To Delete My Mylo Account?
If for whatever reason you wish to delete the Mylo Account, it’s easy to do so.
You have two options for deleting the Mylo App:
First, Email the Mylo support team at [email protected] with your associated “Mylo email ID” and you should be hearing back from the team pretty soon. But please bear in mind, once you delete your Mylo account, all your existing data will be forever gone, including the connected bank accounts and investments.
Second, log in to your Mylo account on the App, go to the live chat option and chat wit ha rep there to delete your account.
How Does Mylo Transfer Money From My Bank To Investment Account?
Mylo transfers money from your bank to your Mylo account weekly on Mondays.
Most Canadian banks impose a limit on your monthly transactions and charge for each transaction over this limit. To keep transactions at a minimum, we aggregate all of your roundups, boosts, and recurring deposits and transfer the grand total from your bank account to your investment account once a week on Mondays.
What Banks And Cards Does Mylo Support?
Mylo currently supports chequing accounts, debit cards and credit cards from all major Canadian banks including but not limited to:
American Express credit cards
Canadian Tire credit cards
Coast Capital Savings CU
Costco Capital One
First Ontario CU
PCF credit cards
Rogers credit cards
Simplii (formerly PC Financial)
TD Canada Trust
Valley First CU
What Is Mylo’s Round-Up To Give Program?
Mylo will process your donations once a month so that they save your roundups in your charity goal as cash before sending them to your selected charity.
Oh yeah, you pick the charity you want to give to. This means there is no investment risk related to any of the funds you want to donate.
Also, All your referral bonuses will be deposited into the first goal that you created in the Mylo app.
This means that if you were saving and investing towards a goal before you create a donation goal, the $5 bonus will be deposited into your original goal.
If you want to donate the $5 to your selected charity, simply withdraw the money from your original goal and boost your donation goal with the same amount.
How Can I Withdraw Money From Mylo?
You can request a withdrawal anytime.
Mylo’ll process withdrawal requests every Friday, so depending on what day of the week you request your withdrawal, it can take between 2 to 8 business days for your money to be deposited back in your funding source.
There are never any fees or penalties related to withdrawing money from an account, whatsoever.
How Does Mylo’s Free Next Day Withdrawals Work?
Next-day withdrawals are only available for Advantage accounts: TFSAs, RRSPs or any investment account made up of a Socially Responsible Investment (SRI) portfolio.
Mylo uses something called EFTs (electronic funds transfers) to process your withdrawal requests within one business day.
With Advantage accounts, you’ll have faster access to your funds, and best of all, withdrawals are still free.
Pros Of Investing Through The Mylo App
What Are the Pros of Investing through Mylo? Let’s discuss them here in this section.
Did you know that Mylo has 5 types of portfolios? What are the portfolio’s for?
Each portfolio at Mylo is built to reflect various risk-reward profiles and aims to help you achieve your financial goals.
Your portfolio manager uses the information collected during your sign-up process to provide you with an investment profile and assigns you one of five diversified portfolios comprised of a mix of stocks, bonds and savings funds, suited to your personal goals.
|Conservative||Conservative Moderate||Moderate||Moderate Aggressive||Aggressive|
Mylo Money Market Fund
Mylo Fixed Income Fund
Here are the ETFs currently being used to construct Mylo’s portfolios. Please note that these are subject to change based on the portfolio manager.
|High-Interest Savings ETF||PSA||0.16%|
Mylo Vs. Wealthsimple
Wow! Clash of the titan! First of all, both Mylo and Wealthsimple are Canadian companies. Both are excellent in-terms of services and investing your money for growth.
Personally speaking, I use both these Canadian Apps to save and invest money.
I am a big fan of both these platforms, with a slight edge to Wealthsimple.
You can probably try out both for different needs, for example – WealthSimple for TFSA and Mylo for roundups. Look at the user interface, menus, use the app, let the investments grow over time (automate it), give it at least 6 months to a year, then see which ones doing better and ditch the other if you don’t like.
You can find my detailed comparison, listing down the differences here. You can join any of these two platforms, both are great in their own ways. Our ultimate goal should be to keep more money invested and saved, rather than spent on unwanted stuff.
Don’t forget money invested early, grows faster over time.
Pros Of Wealthsimple Over Mylo
Here are some of the advantages Wealthsimple has over Mylo:
Over $5B in investments and actively counting – More than 175,000 people trust over $5 billion with Wealthsimple companies – Wealthsimple, Wealthsimple Trade etc
Your data and all the transactions are securely encrypted – Wealthsimple uses the latest state-of-the-art data encryption when handling your financial information or for data processing and storage and two-factor authentication (2FA) protection while logging in to the system. All of the millions of transactions performed are highly secure and encrypted.
Wealthsimple Insurance and protection – All the accounts under Wealthsimple have standard deposit protection, making your investments so much safer, in case something goes wrong.
Powerful fund backing – Did you know that Wealthsimple is backed by ~$265M in investments from some of the world’s largest financial institutions? That’s because all the world’s heavyweights trust this platform and believe in what Wealthsimple does.
What Is A Wealthsimple Basic Account?
Now, this is the basic account type for newbies into the investment world or for the ones who are planning to explore more on how Wealthsimple’s platform works before pumping in more money into the system.
Features and Benefits Of The Wealthsimple Basic Account:
Investment Deposit Range – 0 to 100K CAD
You’ll pay 0.5% in management fees
You get expert financial advice round the clock
Auto-rebalancing of your portfolios (Without your intervention)
You’ll be able to auto-deposit money from your bank’s chequing account and credit cards from multiple banks
dividend Reinvesting – The dividends you earn from ETFs are automatically re-invested back to your portfolios to truly see the magic of compounding. All of your deposits are reinvested into the growth mode and that’s the compounded effect we are talking about. Through this, your investments will grow a lot faster.
What Is A Wealthsimple Black Account?
First of all, the Wealthsimple black account if not for investment beginners. You need to invest at least $100,000 in deposits or transfer from an existing TFSA or RRSP account. The advantage you get is, you’ll pay lower fees and get premium benefits when you invest $100k+ across your Wealthsimple accounts.
Also, another thing to note here is – All the WealthSimple Basic plan features are included here. In addition to the Basic Plan, you’ll also :
Pay lower fees – Deposit more, pay less. When you net $100,000 or more in deposits across your accounts, your Wealthsimple Invest management fee drops to only 0.4%.
Maximize your tax efficiency – Get a break on your taxes with access to tax-efficient features like tax-loss harvesting and tax-efficient funds
Access VIP airline lounges – Travel in style with access to more than 1,000 airline lounges in over 400 cities with a complimentary Priority Pass membership.
What Are The Different Wealthsimple Account Types?
Before we begin, let me tell you that Wealthsimple has 9 types of accounts.
1. RRSP Account: A registered retirement savings plan (RRSP) is an account designed to help Canadians save for retirement. While the investments are held in your RRSP, you won’t have to pay tax on any interest, dividends, or capital gains you earn. There is a limited amount you can contribute to an RRSP every year.
2. Spousal RRSP Account: A spousal registered retirement savings plan (Spousal RRSP) is often used to lighten the tax load for couples with big income disparity as it avoids a higher-income earner from having a large pile of retirement savings in his RRSP while the lower-income earner has a small pile. The limit to the amount you can contribute to an RRSP remains the same even if you have an RRSP and a Spousal RRSP to contribute to!
3. TFSA Account: A tax-free savings account (TFSA) encourages long-term savings by providing tax benefits: any income earned in a TFSA is tax-free, even when you withdraw it. There’s a limit to how much you can contribute each year.
4. Non-Registered Account: A personal (or joint) account in which you can contribute as much, or as little, as you like. All the interest, dividends, and capital gains earned in a non-registered account will have tax considerations. You would most likely have this type of account once you’ve maximized the contribution room in your RRSP and TFSA.
5. Smart Savings Account: A savings account with interest that compounds monthly.
6. RESP Account: A Registered Education Savings Plan can be used to save for a child’s education. You can contribute a lifetime maximum of $50,000 per child, and the government will match a certain amount.
7. RRIF Account: Your RRSP must be converted into a Registered Retirement Income Fund (RRIF) by the end of the year you turn 71.
8. LIRA Account: You would have a Locked-In Retirement Account (LIRA) if you have a pension from a former employer but are not retired. You can’t contribute to a LIRA, but you do have control over the investments in your account.
9. Corporate Account: A corporate investment is opened under your business’s name and, much like a personal account, allows your business to invest money so it can grow.
Lack Of Funds In My Bank Account To Cover Mylo Roundups?
Almost all Canadian Banks will charge you a fee when overdraw is in effect.
If there’s only $10 in your bank account, for example, and you withdraw $20 at an ATM, you may be charged for withdrawing too much money. This charge is called non-sufficient funds or NSF fees and can cost you upwards of $40. Please note that this fee is charged by your bank and not Mylo.
To protect you from NSF fees, Mylo prevents transfers between your funding source and investment account when they see that there isn’t enough money in your bank account.
However, Mylo also recommends that you pause roundups when the balance in your account is very low.
Mylo is a goal-based saving and investing platform. The App is great, intuitive and easy to use.
Wealthsimple and Mylo are two of the best financial technology born and proudly Canadian products.
Having a goal will motivate you to save, and it also gives your portfolio manager some important information about how they should invest your money, including what kind of account makes the most sense for you and what investment strategy they should use.
If you have a TFSA, RRSP or SRI investment account, next-day withdrawals are included at no extra cost. We use EFTs (electronic funds transfers) to process your withdrawal requests within one business day.
Definitely give Mylo or Wealthsimple a try today! I can assure you won’t regret the automated savings.
Thanks for reading! Let me know your thoughts and comments below.
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- The Mylo App is especially great for you if you find it difficult to put down significant sums of money at once to invest or save
- As per the company, they employ the same security and encryption measures that your bank uses
- No prior Investment knowledge is required on your part given that your portfolio manager does all the asset allocation and re-balancing for you
- Desktop Version could have been better
- Mylo Advantage is the only premium version of Mylo and comes with a $3 monthly fee
- Could have more Investment Portfolios
Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.