I opened a savings account the other day with a newish player called Saven Financial that pays 2 per cent. It took me about two minutes to get the account going and another couple of minutes to download and enable Saven’s mobile app.
That is how much effort is required to capitalize on the happy side of rising interest rates. The latest generation of alternative banks and credit unions have an online account application process that near instantly gets you a functioning online account and app.
You’ll still have to contend with the pathetically slow flow of money between banks – up to five days, Saven advises. But getting started on your way to top rates can be just minutes away.
As part of my job, I have opened accounts with a wide variety of online banks. Saven was added to the list because it’s new and because it had the best high interest savings account rate as of recently. Find the highest rates for yourself by trying these three resources:
1.) HighInterestSavings.ca: A database of alternative banks and credit unions offering the best rates. Click the “Rates” column heading and get all the listed players ranked from best to worst rates. That’s how Saven’s 2 per cent rate emerged ahead of a bunch of competitors offering 1.5 to 1.7 per cent. This website also has a great GIC rate database.
2.) Cannex: A broader comparison of savings rates that includes big banks. Some newer players like Saven and motusbank are not listed.
3.) Your bank: Big banks rarely rank among the leaders on rates, but they have been offering unusually good bonus rates on GICs and temporary promotions on savings. For some people, the convenience of dealing with their usual bank compensates for not getting the best rate.
High rates do not add risk in savings accounts and GICs if you’re covered by deposit insurance. Banks should be members of Canada Deposit Insurance Corp., while credit unions offer their own provincial deposit insurance plans.
Of course, I checked out Saven. It’s a division of FirstOntario Credit Union, which is insured through the Financial Services Regulatory Authority of Ontario. Under this plan, non-registered deposits are covered for up to $250,000, while coverage for registered deposits like RRSPs and TFSAs is unlimited.
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Rob’s personal finance reading list
Three smart ideas for your HELOC
Good, old-school advice on your home equity line of credit in light of rising rates. Use it for a home reno? Nope – guess again.
Auto-pilot ETFs for retirement investing
A look at a new exchange-traded fund option for people building up their investments for retirement – target date funds that automatically adjust their mix of assets to get more conservative as you age.
Facing up to the cost of having kids
An interesting Reddit discussion prompted by this question: “How much did the financials of having children impact your decision to have them or not?” For my wife and me, the answer is not at all. We bought a first home and started a family in the mid-1990s. Back then, both kids and houses were routine for young adults early in their careers. Now, not so much.
The Toronto area’s cheapest home has sold
OK, it’s a renovated caboose, not a house, and it’s not connected to water or sewage lines. But what did you expect for a selling price of $45,000?
Q&A
Q: Is it best to wait to age 70 to start taking CPP?
A: Here are some of the latest stories we’ve run on this much-discussed topic:
Should retirees struggling with soaring inflation still delay taking CPP until age 70?
Few Canadian seniors are deferring retirement benefits, when doing so could mean tens of thousands of extra dollars
The case for deferring your CPP benefits is stronger than ever
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
A video series for novice investors on basic concepts like risk, diversification, fees and more. From the B.C. Securities Commission.
The Money-Free Zone
I just listened to the 1966 Chambers Brothers album Time Has Come Today for this first time … and the second and third. Fans of 60s soul, it’s that good. Here’s the Chambers’ signature song, Time Has Come Today.
What I’ve been writing about
- Betrayed by bonds and worried about stocks, investors are turning to GICs
- The best financial advice in advance of retirement? Work on your marriage
- Now more than ever, owning a house is not a retirement plan
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Are your parents giving you money? • Why it’s time to stop shaming the renting lifestyle • Is now the right time to buy a house? • Why are young Canadians leaving the cities they love? • Eating in: How COVID has shifted our food spending • Crisis-proof your finances? • Can you afford to live downtown? • The cost of kids
- ✔️ The housing file: The housing boom is ripping apart the financial fabric of Canada • Shut out: A well-qualified millennial home seeker throws up his hands after losing multiple bidding wars • Big city housing affordability is over – now what? • She sold her Toronto house to retire somewhere cheaper, but it didn’t work • How young adults and the whole country win with a tougher mortgage stress test for home buyers • Can’t afford your house? It’s likely not your fault
- 📈 Investing: Robo-advisers have grown out of the novelty stage. Here’s help in finding one right for you • The 2021 ETF Buyer’s Guide: Best Canadian equity funds • The 2021 Globe and Mail online brokerage ranking: Who’s best for investing … and answering the phone • Are these the stock market returns of a lifetime? • On the cusp of retirement and wondering about an ETF that pushes the limits on aggressiveness
- 💰 Your money: The five most important numbers for checking the health of your personal finances • Today’s freakishly low mortgage rates can’t last. What will pandemic home buyers do when they rise? • There’s a cost in money, isolation and family stress when seniors choose to remain in their own private homes • Taking CPP early can cost you $100,000 and limit your long term options • Fleeing the city for the suburbs? Watch out for higher property taxes, more cars and other costs
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob Carrick