EQ Bank Assessment

I’ve recently revised my review of EQ Bank, now featuring their new prepaid Mastercard, which doubles as a debit card. For those who may not be aware, EQ Bank is a digital banking institution known for offering consistently attractive interest rates. There’s no need to hunt for promotions with EQ Bank, as their rates are persistently competitive.

Ensuring the safety of your funds is crucial, but equally important is the quality of customer service. EQ Bank is dedicated to delivering a superior banking experience that assists Canadians in achieving their savings objectives more swiftly. Below is my assessment of EQ Bank’s Personal Account.

EQ Bank

A frequent complaint among Canadians is the insufficient interest rates offered by savings accounts. EQ Bank’s 2.5%* rate is accessible to all users, not just limited-time offers, making their account very appealing. While the high-interest rate is certainly eye-catching, the account’s additional benefits are also noteworthy.

With no monthly fees, unlimited daily transactions, and no minimum balance required, these features are common in online banking, yet traditional banks have often been slow to adopt them. The higher operational costs of physical banks, with their retail locations and staff salaries, contribute to this. EQ Bank, however, operates entirely online, allowing them to pass on cost savings directly to their customers.

The EQ Bank Personal Account merges features typical of checking accounts with those of savings accounts. Users can deposit checks (including mobile deposits) and set up direct payroll deposits. Additionally, customers can link an external bank account for easier fund transfers.

Accessing your money is straightforward as you can link your EQ Bank account to your usual bank account, though it may take up to two business days for transfers. To expedite access to your funds, you can utilize the unlimited free Interac e-Transfers®, which allow you to receive money in 30 to 60 minutes.

These features should excite both savers and investors alike. You can park your funds and earn guaranteed interest (after taxes) with zero risk. With EQ Bank, interest is paid monthly, with no holding periods.

Despite EQ Bank having been around for some time, potential clients may be wary of the high rates offered. Fortunately, EQ Bank is a subsidiary of Equitable Bank and a member of the Canadian Deposit Insurance Corporation, ensuring your money is insured up to $100,000.

It’s important to note that when you open a new account, EQ Bank will perform a soft credit check to verify your identity. This check does not impact your credit score, so it shouldn’t be a cause for concern.

One limitation is that EQ Bank’s services are not available in Quebec.

EQ Bank Card

• No monthly fees
• Free ATM withdrawals at any Canadian ATM
• Cash back on every purchase
• Earn interest on your balance
• No foreign exchange fees

A common criticism of EQ Bank in the past was the inability to withdraw cash from ATMs. This concern has been addressed with the introduction of the EQ Bank card, a no-fee reloadable Mastercard that requires you to transfer funds to the card beforehand. Once loaded, you can withdraw cash from any ATM in Canada without incurring fees. While ATMs might impose a fee for withdrawals, EQ Bank will refund those costs afterward.

This prepaid card is particularly attractive as it charges no foreign exchange fees for purchases made abroad. Though Mastercard does include a minor markup in its exchange rates, you won’t incur the typical 2.5% fee charged by most credit cards.

Additionally, funds loaded onto the card earn interest at the same rate as that of 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 launched both RRSP and TFSA accounts, distinct from the HISA account. However, it’s essential to open a Personal Account with EQ Bank to set up either an RSP or TFSA account.

Both the RSP and TFSA options are limited to savings accounts and GICs, meaning investments in stocks, mutual funds, or ETFs are not allowed within these accounts. Standard contribution and withdrawal limits apply to both account types.

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

Why Choose EQ Bank?

Many individuals are reluctant to switch banks due to the often cumbersome nature of the process, but EQ Bank shouldn’t be seen as a complete replacement. Instead, it complements your everyday banking needs.

Whether you’re saving for a vacation, education, or a new pair of shoes, the EQ Bank Personal Account allows you to create unlimited sub-accounts tailored to your goals. The ability to set savings objectives for each account is a valuable feature, enabling you to track your savings progress effectively. Best of all, your funds are not locked; you can withdraw them whenever you wish.

While the account is themed around savings, you can also conduct daily transactions directly through the mobile application, including fund transfers and bill payments. EQ Bank does not permit overdrafts, so you won’t incur extra fees due to insufficient funds; rather, the primary concern would be the lack of available money.

There’s no hidden catch. Though EQ Bank provides above-average interest rates, their business model involves lending your deposits at higher rates to others. This is a typical banking practice, but being a digital bank allows EQ Bank to operate with lower overhead compared to traditional banks.

EQ Bank does support pre-authorized payments, making it easy to manage daily expenses using one of the best travel or cash back credit cards in Canada while automatically settling the bill from your EQ Bank account. This way, your money is withdrawn just once a month, allowing you to earn maximum interest while enjoying credit card rewards simultaneously.

Although EQ Bank has no physical branches, customer service is reachable via live chat, phone (from 8 AM to midnight), or email.

EQ Bank Joint Accounts

After a few years, EQ Bank has finally rolled out joint accounts, making them useful for those who wish to share an account. Joint accounts can accommodate up to three people, which is ideal for situations like allowing elderly parents to conveniently access funds with the help of their adult children.

These accounts also enjoy the same interest rate, and it’s important to note that CDIC treats joint accounts separately from individual accounts, providing an additional $100,000 in insurance coverage.

Is EQ Bank Safe?

I have mentioned this previously, but it’s worth reiterating. EQ Bank is a secure option and unlikely to face insolvency. Trust in EQ Bank is bolstered by its ownership under Equitable Bank, a financial institution that has been established since 1970 and is a member of the Canada Deposit Insurance Corporation (CDIC).

Depositors at any CDIC member institution are covered up to $100,000. For those needing more insurance, opening a joint savings account with a spouse could provide an additional layer of protection.

While no bank is entirely risk-free, this applies to all financial institutions. A higher interest rate from EQ Bank doesn’t imply added risk; personally, I’ve chosen EQ Bank for the bulk of my cash savings.

EQ Bank Refer a Friend

Recently, EQ Bank launched a referral program where new customers can receive $20 upon signup. The referring individual also earns $20, with escalating rewards based on the number of referrals.

• $20 for your first three referrals
• $30 for the next four referrals
• $40 for any subsequent referral

You can earn a maximum bonus of $500 after referring 15 individuals, provided they deposit at least $100 into their EQ Bank Personal Account within 30 days of activation.

EQ Bank GIC

Another significant product offered by EQ Bank is Guaranteed Investment Certificates (GICs). GICs are investment tools that ensure a return; however, you must commit your funds for a predetermined period. Typically, longer terms offer higher interest rates. GICs can be beneficial for those confident they won’t need to access their money for an extended time. While I won’t specify current rates due to their variability, available terms 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 required.

How Does EQ Bank Compare to Others?

While digital banks share many similarities, I tend to categorize them into tiers.

Motive Financial is a close competitor regarding interest rates, and LBC Digital initially offered aggressive rates, though they have since decreased.

Banks like Tangerine and Simplii are owned by larger institutions (Scotiabank and CIBC, respectively), providing ATM access but with significantly lower interest rates.

A standout feature for EQ Bank is their superior international money transfer options, thanks to a partnership with Wise (formerly Transferwise), ensuring excellent exchange rates.

Personally, I utilize EQ Bank for my primary banking needs but also maintain an account with Tangerine due to established history. I’ve linked my EQ Bank account to my Tangerine account for easy transfers. Ultimately, you don’t need to pick just one online bank; select those that best fit your needs.

Final Thoughts

In conclusion, I have a favorable impression of EQ Bank. The interest rate significantly exceeds the average daily rate, and the ability to access your funds using a physical card is a clear advantage. It’s evident that EQ Bank values its clients’ financial wellbeing and their business.