EQ Bank Evaluation

This updated review of EQ Bank now features their new prepaid Mastercard, which functions as a debit card as well. For those who may not know, EQ Bank operates as an online institution, consistently offering attractive interest rates without the necessity to pursue promotional deals, as their rates are predictably competitive.

Ensuring the safety of your funds is essential, but so is a positive customer service experience. EQ Bank aims to deliver a superior banking experience to assist Canadians in achieving their savings objectives more swiftly. Below is my take on their Personal Account.

EQ Bank

Many Canadians express frustration over low-interest rates with savings accounts. EQ Bank’s 2.5%* rate is accessible to everyone, making their Personal Account appealing without the limitations of short-term promotional rates. The inviting interest rate catches attention, but other features of this account are equally worthwhile.

While no monthly fees, unlimited transactions, and the absence of minimum balances are norms for digital banking, traditional banks have been slow to implement similar practices. It’s worth noting that conventional banks face higher operational costs due to physical branches and staff. In contrast, EQ Bank operates strictly online, allowing them to channel savings directly to their clients.

The EQ Bank Personal Account merges features typically associated with both checking and savings accounts. Users can conveniently deposit cheques, including mobile cheque deposits, and manage direct payroll deposits. Additionally, you can link your EQ Bank account with an external bank, simplifying the process of moving funds.

Accessing your funds is straightforward, as linking your EQ Bank account to another bank allows for transfers, typically taking up to two business days. However, using unlimited free Interac e-Transfers® can expedite access within 30 to 60 minutes.

These features should appeal to both savers and investors. You can securely store your funds while earning a guaranteed return (post-tax) without any risks. EQ Bank credits interest on a monthly basis, with no holding periods.

Although EQ Bank has been operational for several years, potential customers may still harbor skepticism towards the high rates offered. Comfortingly, EQ Bank is a subsidiary of Equitable Bank, which is a member of the Canadian Deposit Insurance Corporation, securing account protections up to $100,000.

It’s essential to mention that opening an account with EQ Bank includes a soft credit check to verify your identity, which doesn’t impact your credit score and should not be a concern.

Despite these exceptional offerings, it’s important to note that EQ Bank is not accessible in Quebec.

EQ Bank Card

• No monthly fees
• Free withdrawals from any ATM across Canada
• Cashback on all purchases
• Interest accrued on savings
• No foreign exchange fees

A notable past grievance regarding EQ Bank was the inability to withdraw cash from ATMs, but this issue has been resolved with the introduction of the EQ Bank card. This no-fee, reloadable Mastercard requires you to preload funds before withdrawing cash without incurring fees at ATMs. While ATM operators may still charge a fee for withdrawals, EQ Bank will reimburse those fees afterward.

Furthermore, a significant advantage of this prepaid card is the absence of foreign exchange fees for purchases made abroad. Although Mastercard applies a slight markup for exchanges, you won’t incur the standard 2.5% fee typically found on many credit card transactions.

Additionally, any amount loaded onto the card accrues interest at the same rate as the EQ Bank savings account.

Other Accounts Offered by EQ Bank

• EQ Bank Retirement Savings Plan
• EQ Bank Tax-Free Savings Account
• EQ Bank US Dollar Account

EQ Bank has recently rolled out RRSP and TFSA accounts, separate from the High-Interest Savings Account (HISA). It’s important to note that to establish either an RRSP or TFSA, one must first open an EQ Bank Personal Account.

Both RRSP and TFSA accounts will be exclusively focused on savings accounts and GICs, meaning investments in stocks, mutual funds, or ETFs are not permissible within these accounts. Standard contribution and withdrawal limits apply.

The USD account has gained popularity as it also provides interest on deposits.

Reasons to Choose EQ Bank

Switching banks can be daunting, but EQ Bank should be considered a complementary service rather than a replacement for your current banking setup.

Whether you’re saving for a vacation, education, or new gear, the EQ Bank Personal Account allows you to create unlimited sub-accounts for diverse savings goals, making it easy to track progress. Notably, your funds are accessible whenever you need them, with no locking period.

While the account promotes savings, it also supports everyday transactions through the mobile app for fund transfers and bill payments. EQ Bank prevents overdraft scenarios, eliminating unexpected banking fees; just ensure you have sufficient funds.

There’s transparency in EQ Bank’s operations. Although they provide above-average interest rates, the bank invests deposited funds at higher rates to generate income, a common practice across the banking sector. Their digital-only model contributes to reduced overhead expenses compared to conventional banks.

EQ Bank does accommodate pre-authorized payments. This feature allows you to handle daily expenses using a prominent travel or cashback credit card while automatically settling charges from your EQ Bank account, allowing you to earn maximum interest while also benefiting from credit card perks.

Despite there being no physical branches, customer service is accessible via live chat, phone (from 8 am to midnight), or email.

EQ Bank Joint Accounts

After some time, EQ Bank has now introduced joint accounts, which can be useful for those who wish to manage funds collaboratively. Remarkably, these accounts accommodate up to three individuals, making them suitable for various situations, such as allowing elderly parents easy access to their adult children’s funds.

Joint accounts benefit from the same competitive interest rate, and it’s important to note that CDIC insures them separately from individual accounts, thus providing another $100,000 in coverage.

Is EQ Bank Secure?

As mentioned earlier, EQ Bank is a secure option, with a low risk of insolvency. The bank is a subsidiary of Equitable Bank, which has been operational since 1970 and holds membership with the Canada Deposit Insurance Corporation (CDIC).

Deposit protection is guaranteed up to $100,000 for CDIC members. For additional insurance coverage, couples can establish a joint savings account separately, offering another $100,000 in protection.

While every bank carries some risk of failure, the appeal of EQ Bank’s higher interest rates does not equate to increased risk. I personally entrust EQ Bank with the majority of my cash reserves.

EQ Bank Referral Program

Recently, EQ Bank launched a referral program where both the referrer and the new account holder can earn rewards. If you refer someone, you’ll receive $20 upon their sign-up and deposit, and the rewards increase with more referrals.

• $20 – For your first three referrals
• $30 – For the next four referrals
• $40 – For any subsequent referrals

The referral bonus is capped at $500, which you can achieve after 15 successful referrals, provided each new accountholder deposits at least $100 within 30 days of account activation.

EQ Bank GICs

Another notable product from EQ Bank is guaranteed investment certificates (GICs), which offer a secure return. The trade-off is that your funds need to be locked in for a predetermined period. Typically, longer commitment translates to higher interest rates. For potential GIC investments, while current rates fluctuate, the terms available include:

• 3 Months
• 6 Months
• 9 Months
• 1 Year
• 15 Months
• 2 Years
• 27 Months
• 3 Years
• 4 Years
• 5 Years

To purchase an EQ Bank GIC, an EQ Bank Personal Account is necessary.

Comparative Analysis of EQ Bank

While all digital banks share similar attributes, I categorize them into tiers. Motive Financial stands out as EQ Bank’s closest competitor in terms of interest rates, whereas LBC Digital launched with aggressive rates that have since lowered.

Other institutions, such as Tangerine and Simplii, belonging to larger banks (Scotiabank and CIBC, respectively), offer ATM access but have significantly lower interest rates.

One area where EQ Bank shines compared to its online counterparts is in international money transfers, owing to their partnership with Wise (formerly Transferwise), ensuring competitive exchange rates.

I use EQ Bank for my personal banking, while maintaining accounts with Tangerine because of previous associations. I have linked my EQ Bank account to my Tangerine account for seamless fund transfers. Using multiple banks can provide the best financial tools tailored to your needs.

Conclusion

Overall, my experience with EQ Bank has been favorable. They offer a competitive interest rate along with convenient access to your funds through a physical card. It’s clear that EQ Bank prioritizes the financial well-being of its clients while valuing their business.