A Savings Account That Rewards Inertia

Canadians have few reasons to save these days. Cheap borrowing coupled with feeble returns on your savings deposits makes it hardly seem worthwhile to park your cash in a savings account. Some banks have decided to punish savers even further by charging fees just for moving your money around.

Gaining Momentum Through Inertia

But one bank has turned to the carrot rather than the stick approach to help its customers save. Scotiabank, which already boasts the best suite of rewards credit cards (including the top cash back card), in addition to its Moneyback chequing account, has raised the stakes with a new high-interest savings product called the Momentum Savings Account. Here’s how it works:

Using a unique incentive that rewards “inaction”, or our tendency to drift toward financial inertia, the Scotiabank Momentum Savings Account pays a bonus interest rate for customers who do not make a withdrawal in a 90-day period.

The account pays regular interest of 0.75 percent when you keep a balance of $5,000 or more. If you resist the temptation to withdraw from your account for 90-days, you’ll receive a 0.75 percent bonus, for a total interest rate of 1.5 percent.

Customers who open an account by June 15th, 2015 will get an additional 0.5 percent bonus, for a total of up to 2 percent until July 31st, 2015.

Momentum Savings also comes with an “Account Tracker” that customers can access online and through their mobile app. It provides a visual “countdown” to the extra interest payment, so you can see when you’ll receive the extra interest. With this tool, you can be strategic about when to withdraw from the account to ensure maximum savings.

Scotia Momentum Savings Account

How does Momentum Savings stack up against the competition? Here’s what the big banks and popular online banks offer for interest rates on balances of $5,000 or more:

Bank / Product Interest rate
Scotia Momentum Savings Account 1.50%
BMO Savings Builder Account 1.30%*
Tangerine Savings Account 1.05%
PC Financial Interest Plus Savings 1.05%
RBC High Interest e-Savings 0.80%
CIBC e-Advantage Savings Account 0.80%
TD High Interest Savings Account 0.75%

*Regular interest of 0.3% – plus 1% bonus when monthly balance increases by $200 each month

Final thoughts

It’s hard to get excited about high interest savings accounts in this low rate environment. But if you need cash within the next few years, whether for a house down payment, car fund, or tuition, unfortunately there aren’t many risk-free options available.

And instead of hopping around from bank-to-bank chasing the latest promotion, you’d like to find one place to stash your savings and earn a market-leading interest rate that’s attainable and doesn’t change.

With a Momentum Savings Account, you’ll get paid twice. Once for the initial deposit, and then again for simply keeping your money parked.

Isn’t that the ultimate point of a savings account anyway – a safe place to squirrel your money away for the future? It’s nice to be rewarded for the good habit of doing nothing.

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  1. Beth on May 11, 2015 at 5:15 am

    I find these posts informative, but i wish you were more transparent with your readers and let us know when something is advertorial or sponsored. The lack of balance in this article suggests it’s not a review. For instance, given the fees it costs to take money out of an account how long would it take for a move to pay for itself? Do you have to already have an account with Scotia? Is it worth going to your regular bank and asking them to match the rate? Is it even worth using this account when investments would be earning a lot more — or is this good for emergency fund, etc.? Is this available for a TFSA — if not, how much of this “extra” interest would you lose to taxes anyway? Also, does Scotia (like the other big banks) have a habit of starting out with decent interest rates and then clawing them back?

    I think what people love about personal finance blogs is that it’s a real person talking to them, not a lot of marketing speak or companies with agendas. I’m just saying be careful which side you stay on.

  2. Paul N on May 11, 2015 at 8:26 am

    I simply can’t get excited by any interest paid out that is less than 3.5 or 4%… There was a time I had this Canada Trust “Monthly interest T-bill” account, when I was saving up for my first house. I was receiving about $400.00 a MONTH on about $80K.

    For many years now, the rates have been simply a bad joke. Eaten by inflation, probably in the space of a week or a month before you even notice you received anything.

    • Beth on May 11, 2015 at 4:07 pm

      Yes! When I started my PC savings account many many years ago, the interest rate was 5%. And I saved for my university education with savings bonds — remember when they had good rates?

      The banks I deal with are constantly offering me lines of credit I don’t need. What I want is a good interest rate on my savings, not my non-existent debt.

  3. Louis D on May 11, 2015 at 9:13 am

    I uncovered People Trust Wich is better than all Banks présented above; 1.6% on régular account (online acces with a link to any Banks account ) and 2.25% on TFSA! no 90 days inertia

    It is being insure by CDIC as Well.


  4. Barry @ Moneywehave on May 11, 2015 at 10:51 pm

    Pretty interesting to see a bank offering more interest than they have to. Not sure if I would switch banks to tale advantage, but definitely a good think for existing customers.

    • Louis D on May 13, 2015 at 6:06 pm

      Interesting logic! If I follow it I may say that Scotia momentum is given more interest than they have to so I should go with the lowest one….

  5. Samantha @ LifeonCredit on May 12, 2015 at 2:59 pm

    All the products you have used in your comparison give you negative return after inflation. Why would I or anybody else keep any money in a savings account?

  6. Conrad on May 13, 2015 at 5:55 pm

    Check out Rosenort Credit Union in Rosenort Manitoba, Plan 24 saving rate is 2 % and TFSA is 2.35%. No terms

    • Louis D on May 13, 2015 at 8:01 pm

      But not insure by CDIC

  7. Davis on May 14, 2015 at 6:24 pm

    Oaken.com offers 1.75% on its savings account with CDIC insurance and no restrictions. This is better than Scotia’s restricted account. (I have accounts with both, but no other connection with them.)

  8. Joe on May 16, 2015 at 12:23 pm

    Or you could try one of the numerous MB or BC on line credit unions and get 1.9% (daily interest) or more without any fuss or gimmicks.

  9. alberta on May 17, 2015 at 9:46 am

    I was surprised that you are not so much as details person…your enthusiasm over the rates fails to indicate that these are based on a yearly basis…and that the %5,000.00 invested for 3 months will earn a wopping $24.90 or there abouts…Transparancy and accuracy in reporting will give you much more credibility..me thinks

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