We just added a new Canadian high-interest savings account to our index of financial products. It's the EQ Bank Savings Plus Account
which was recently launched by EQ Bank (a division of Equitable Bank).
With a current interest rate of 3.00%, it provides the highest rate of interest of any of the savings accounts currently available in Canada which we track in our index of financial products. In fact, the EQ Bank savings account offers a rate that is a full 1.25% higher than its closest competitors. MAXA Financial, Implicity Financial, AcceleRate, Hubert Financial and Oaken are all currently offering only 1.75%.
Although EQ Bank states on their website that this is not a temporary promotional rate, we believe that it is highly likely that this rate will not be sustained for long considering that the Bank of Canada's overnight lending rate currently sits at 0.5% and that the highest rates offered by any other financial instititution is currently 1.75%. It is likely that EQ Bank may very well follow an established pattern that we have noticed over the years: a bank will launch a virtual bank division offering a very high interest rate which is then gradually lowered once the bank has accumulated a sufficient quantity of deposits. Overall deposits are then maintained as customers either do not notice that the rate has been cut or are too busy to look into transferring their money out or cannot find any better rates elsewhere. A good example of this would be ING Direct (now Tangerine) which started off by offering very competitive interest rates on their savings account in the late 90's/early 2000's and then gradually reduced their rate until they were bought out by the Bank of Nova Scotia (at which time the competitiveness of their rates was further eroded). Let's hope that this will not happen too quickly at the new EQ Bank.
One of the nice features of our index of financial products is that we keep track of historical rates too and we display this information in a chart for everyone to see (this is information that is often not made public on the websites of financial institutions). So we will be able to see how the EQ Bank savings account rate trends over time and this will be displayed on our EQ Bank Savings Plus Account
So, is this an interest rate that is worth chasing? If you have the time to spend to open yet another bank account and you have a significant sum of cash to deposit, then we would say that it is likely worth the 5 minutes that EQ Bank says it takes to open their new account. Just keep in mind that it may take a while for EQ Bank to open your account since as stated on their website today:
"We've experienced an overwhelming response over the past few weeks. Unfortunately that has led to delays as we securely bring on all our new customers."
Also, be sure to keep on top of the current interest rate being offered by EQ Bank so that you can quickly move the funds out of the account if it is no longer offering the highest interest rate. An easy way to keep on top of current rates for all savings accounts is to visit our savings accounts
page which is updated every 24 hours.