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EQ Bank: Your New High-Interest No-Fee Banking Solution

Over the last decade or more Canadian banking customers have had to accept two inevitable truths; interest rates on savings deposits would plummet and stay at historic lows, and banks would continue to raise fees on everyday bank accounts and services. All of this occurred while Canada’s big five banks hauled in record profits.

Savvy bank customers had to invent complicated workarounds to keep their hard-earned money safe, free of fees, and to earn a decent interest rate. That meant limiting transactions, maintaining high minimum balances, and bouncing from bank-to-bank chasing the latest short-term high-interest rate promotional offers.

If only there was a bank that offered one solution: a hybrid chequing-and-savings account that paid market-leading interest rates with no monthly fee, and no extra charges for moving your money around via e-Transfer or for paying bills.

EQ Bank

Enter EQ Bank – a new digital bank and offshoot of Equitable Bank – with its unique EQ Bank Savings Plus Account. This account offers an incredible 2.3 percent interest rate with no monthly fees and no minimum balance. The interest rate tops all financial institutions in Canada and is billed by EQ Bank as an everyday rate.

What is a digital bank? For starters there are no branches, which means banking online or via smart-phone or tablet. Without any bank branches there is much less overhead for EQ Bank and they’re able to pass along the savings to their customers in the form of higher interest rates and no monthly fees.

EQ Bank

Don’t let the name and high interest rate fool you into thinking this is just a savings account. The EQ Bank Savings Plus Account also comes with some chequing account functionality, offering unlimited day-to-day transactions, the ability to pay bills for free, and get up to five Interac e-Transfers for free each month. Clients can transfer money easily between an EQ Bank account and another bank via electronic funds transfer (EFT).

That sounds great, but is your money secure? Equitable Bank is a member of the Canadian Deposit Insurance Corporation (CDIC), and so deposits in the EQ Bank Savings Plus Account are insured up to the applicable limits.

Another neat feature that EQ Bank offers is the ability to open sub-accounts through something they call “savings goals”. Many people like to save for multiple goals, such as a house down payment, new car, a vacation, or even a new pair of shoes. You can set up recurring transfers from one account to the account with your savings goals, and EQ Bank will show you a progress bar to track how well you’re doing.

Where are the fees? There aren’t any – seriously, I looked. (Unless you happen to go over your five free monthly Interac e-Transfers, then it’s the standard $1.50 per transfer).

So what are the limitations? There are a few things to note; namely that neither cheques nor debit cards will be issued with new accounts at this time, and clients won’t be able to withdraw or deposit funds from an ABM. Instead, simply access your account through the mobile app or online and move your money around freely between your linked bank account and your EQ Bank account through EFTs and e-Transfers.

Cheque deposits are limited to $25,000 per cheque, bill payments to $5,000 per transaction, and if you’re looking for a place to park a million dollars in cash, you’re out of luck at this time – EQ Bank has a total account balance per customer limit of $500,000.

Opening an account is simple – it took all of five minutes for me to set up an online profile, download the mobile app from the App Store, write a cheque to myself from my existing bank (for a minimum of $1), and use the EQ Bank app to take a picture of the cheque and confirm the deposit. From there it takes five days for EQ Bank to verify your account, at which time they’ll send you an email to notify you when your account is open.

Final thoughts on EQ Bank

In an environment where 1 percent is considered “high-interest savings”, and 2 percent is considered a temporary bonus offer, EQ Bank and its 2.3 percent everyday interest rate will have savers salivating.

Finally, Canadians have access to a market-leading high interest savings account that can be used for more than just a place to park cash for the short-term while you look for a better deal.

Read more about EQ Bank and its 2.3 percent Savings Plus Account here.

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23 Comments

  1. darren on January 18, 2016 at 6:25 am

    This has gone from financial blog to an advertising blog

  2. David O. on January 18, 2016 at 6:42 am

    I found this article quite interesting. Another financial option I say.

  3. bsran on January 18, 2016 at 7:12 am

    Agree with darren, however, Robb also needs to earn something for his effort

  4. Dw on January 18, 2016 at 8:05 am

    Great rate but no tfsa or rrsp option yet. Hopefully have this option soon

  5. swas on January 18, 2016 at 8:06 am

    Do they have (or plan to have) a TFSA?

  6. Echo on January 18, 2016 at 8:41 am

    @swas & @dw

    I reached out to EQ Bank to see if they had plans to offer a TFSA and/or RRSP savings account option:

    “We’re giving it serious consideration right now but don’t have exact timing or offering details. Hoping to have more product info to share in the coming months.”

    So, stay tuned?

  7. Gail Bebee on January 18, 2016 at 8:47 am

    We have seen this before (e.g. ING, PC Financial). A new bank comes on the scene with incredible rates used as a customer-gathering marketing ploy.
    Note the fine print: the interest rate is subject to change at any time.
    Once EQ Bank has secured enough customers, I am almost certain that their rates will fall to those offered by the competition.
    So, enjoy the 3% while you can.

  8. Ashley on January 18, 2016 at 9:52 am

    I signed up on the first day too, if the interest rates fall in the near future there will be a big whoosh as customers flee, but they may have generated enough dozy customers by then who will stick around.

    It sounds a bit “too good to be true” but we will see. In the meantime I will enjoy my 3% for savings, ease of use, and the free ability to close my account when the time comes. Hopefully there will be no need.

    • swas on January 19, 2016 at 11:01 am

      Why not wait till they lower rates, then tell everyone “I told you so!”. It seems to me it’s too easy to be skeptical of such things. The bank has lower costs and thus has the ability to pass some gains on to customers. It seems to me that the ‘dozy’ customers are the ones sitting in the mainstream chartered banks earning minimal interest, with large required savings levels and assuming these EQ rates are temporary. Many who will move to this bank are, I believe, likely to be more concerned about the return they are earning than the average saver and are thus more likely to bail quickly if this turns out to be an introductory rate. It also seems likely that the EQ Bank knows that this could occur. I opened a TFSA at a little trust in Vancouver called Peoples trust in late 2014 and earned 3% interest. It has now declined to 2% as interest rates have continued to fall, but no reasonable person can expect a lender to maintain a floating rate in the face of changing macroeconomic conditions. If you want a guaranteed rate buy a GIC. In short, I expect that the 3% rate offered is probably valid. Will it change? Probably. If interest rates rise, it will rise. If they fall, it will fall. By the way, everything I’ve said here and $8 will get you a cauliflower at IGA.

  9. Ralph Smith on January 18, 2016 at 6:35 pm

    You should advise in your review that joint accounts are not allowed. This could be a restriction to many potential investors.

  10. Pat on January 18, 2016 at 7:56 pm

    You transfer your money by EFT, but aren’t there fees for that from the origin bank?

    • Ashley on January 19, 2016 at 10:05 am

      I would hope not, unless you have some kind of expensive bank account.

  11. John on January 20, 2016 at 12:07 pm

    Thanks Robb for bringing this to our attention! Will be signing up shortly.

  12. Katie on January 27, 2016 at 12:23 pm

    I signed up for this bank over a week ago – and they still haven’t finished the account opening process. Additionally, I have received no response to any of my inquiries to customer service.

  13. Ashley on January 27, 2016 at 12:58 pm

    I signed up on the very first day you could (Jan.14 or 15) and they cashed my cheque on Jan.25th. Now my account is supposed to be open in 5 business days, so by Feb. 1. Perhaps they were overwhelmed by the response to the account, perhaps they didn’t want to pay interest until Mar. 1, who knows. The key is to be a bit patient I think. Give it time to open and see how things go.

  14. Ashley on January 29, 2016 at 1:27 pm

    From an e-mail just now (FYI, my cheque cleared 4 days ago)…

    Over the last few weeks, we’ve received an overwhelming response to the launch of EQ Bank and the EQ Bank Savings Plus Account. You and many other Canadians have trusted us with your business, and we truly value and appreciate it.

    The EQ Bank team is working hard to get your account activated and you will receive your welcome email 5 business days after your initial cheque has been processed. We apologize for any inconvenience and we plan to have you on board very soon.

    We look forward to helping you and many other Canadians reach their savings goals.

    Sincerely,

    EQ Bank

  15. Ashley on February 1, 2016 at 8:40 pm

    Account is open.

  16. Markus on February 2, 2016 at 9:43 pm

    Hey Ashley,

    I just wanted to clarify your story. You deposited your cheque on Jan 14 or 15 and EQ Bank cashed it out on January 25th? So, it took them 10 or 11 days to cash out your cheque? And after that, it took them another week (Feb 1st) to have your account open?? So when do you actually start to make interest? Is it January 25th or February 1st?

    It just sounds like an awefully long time just to open an account!

    • Echo on February 2, 2016 at 10:05 pm

      Hey Markus, I signed up around the same time as Ashley (Jan 13) and must have got my account through before they got overwhelmed with sign-ups. I did receive an interest payment on Feb 1 for my January balance.

      According to EQ Bank’s twitter feed, as of Jan 28th, they were flooded with sign-ups and couldn’t keep up – (https://twitter.com/EQBank/status/692809395726475264)

      “Due to high demand, account activations are delayed. We have added extra staff to speed up processing times.”

    • Katie on February 3, 2016 at 12:28 pm

      I submitted my cheque on Jan 16 and the account is still not opened. It does seem like a long time, but I guess they are just overwhelmed.

  17. Greg on February 25, 2016 at 4:33 pm

    I’ve always thought about signing up for one of these “digital” banks which have no physical locations, dating back as far as when PC Financial came out with their bank, but I’m still not convinced if that extra % or two in interest rate will really make a difference to sacrifice the convenience of having a physical location to go to and talk to someone when you need them. Call me old fashioned, or not, but just my two cents. On another note, I’m surprised they’re secured with CDIC, but that’s good to hear.

  18. Echo on March 7, 2016 at 12:08 pm

    Just an FYI for this thread: EQ Bank places weekly limits on savings account sign-ups to help deal with excess demand – http://www.theglobeandmail.com//globe-investor/personal-finance/eq-bank-places-weekly-limits-on-popular-savings-account-sign-ups/article29047606/

  19. Leanne B on May 2, 2016 at 9:58 am

    Does anyone know of other banks that have accounts with free interac e-transfers? I would love to find one that offers a joint account option.

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