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One way I’ll know my work is done as a personal finance columnist is when people stop acting like big banks are the only safe place to park savings.

A recent note from a reader tells me this concern is as strong as ever. This individual is frustrated by the l-o-w interest rate offered by his big bank on $100,000 in savings. He found an alternative bank with a much better rate, but he’s having trouble making the switch.

“I am rather leery about moving this amount to another bank and would appreciate your point of view on going through with this,” he wrote in an e-mail.

The interest rate on his big-bank savings account is 0.05 per cent – yes, you read that correctly. Barely anything. The alternative bank this reader said he’s thinking about is EQ Bank, which as of early November paid 1.5 per cent.

My take can be summed up in a pandemic personal finance update I wrote during the spring. The headline: Why you should clean out your big-bank savings account.

Let’s review this particular case. Money parked at EQ can be considered safe because the bank is part of Canada Deposit Insurance Corp, which covers eligible deposits of up to $100,000. I’ve done business with EQ and find its website and mobile app to be user-friendly for moving money to and from my chequing account. You can also pay bills from your EQ accounts, which is very handy.

I presented this reader’s quandary on Twitter not too long ago and generated lots of replies, which you can read here. Personal finance commentator Preet Banerjee offered a smart suggestion: Move half the money and then see how the difference in interest feels after a few months.

About that 1.5 per cent from EQ: As of early November, there were a few alternative banks paying higher rates and some paying less. Given the economic uncertainty out there as a result of the pandemic, low rates are here for a while. We might even see savings rates fall a bit from current levels.


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Rob’s personal finance reading list

Seniors, remember to file your taxes

Tens of thousands of seniors are at risk of losing benefits because they haven’t yet filed their 2019 tax returns, the federal government recently warned. John Stapleton, an expert on financial planning for low-income people, says seniors who don’t file risk seeing their guaranteed income supplement payments interrupted in January. Mr. Stapleton said more than 30 per cent of Canadian seniors 65 and over receive or are eligible for GIS payments, on top of their Old Age Security payments. Thousands had not yet filed their tax returns as of last month, which is a problem because these returns provide the information essential for calculating and paying their benefits. Both partners must file in the case of senior couples because it is their combined income that determines their GIS benefits.

Lies, damn lies and real estate listings

A veteran realtor lists some common “exaggerations” found in real estate listings. Watch out for words like “rare,” “unobstructed” and “spa-like.”

Retirement planning – where to start?

This post from long-time personal finance blogger Robb Engen offers a helpful overview of financial matters to focus on for retirement. Now for a look at the retirement lessons one woman learned from having parents who followed the financial rule of living below your means.

Oil companies take on climate change

A look at how Canadian oil and gas companies compare to their global peers in making changes to adapt to climate change.


Guest Q&A

Today’s guest is Terry Goodtrack, president and CEO of AFOA Canada (Aboriginal Financial Officers Association). AFOA was founded as a not-for-profit association in 1999 to enhance Indigenous management, finance and governance practices and skills. It also delivers workshops on financial literacy for youth and retirement planning for aboriginal Canadians. Here’s an edited transcript of our Q&A:

Q: What is your approach to promoting financial literacy for Indigenous people?

A: We are trying to turn financial vulnerability into financial wellness. I think the eight areas of this model are equally important and interrelated:

AFOA

Q: Can you point out some national financial companies that you think are doing a good job of serving Indigenous customers?

A: If we are referring to financial institutions, I would mention TD, RBC, First Nations Bank, Peace Hills Trust and Scotiabank. If we are referring to investments, I would mention the following:

  • Beutel Goodman & Company Ltd.
  • Dixon Mitchell Investment Counsel
  • Fiera Capital Corporation
  • Jarislowsky Fraser Limited
  • Leith Wheeler Investment Counsel Ltd
  • Lincluden Investment Management
  • Letko Brosseau & Associates
  • Ridgewood Capital
  • T.E. Wealth
  • Worth Allaye-Chan Investment Counsel Raymond James

Q: How do you suggest Indigenous people find a financial planner or an adviser who understands their needs?

A: At an individual level, I like the idea of ensuring the person is independent of the products they sell. I think ensuring the person’s reputation and performance should be taken into consideration. Good referrals are a start as well; however, due diligence is also important.

Q: One of the investing matters people struggle with is choosing between tax-free savings accounts and registered retirement savings plans. What’s your perspective on this for Indigenous people?

A: I think an understanding of why you would want to use these products and what they can do is important. First of all, you have to have earned income as defined by the Income Tax Act for an RRSP. If a person does not have earned income, then this is not the product for that person. The TFSA is a good product since you do not have to pay taxes on interest or dividend income as an example. With the TFSA, you have to have extra funds available to take advantage of it. Many Indigenous people live paycheque to paycheque and cannot take advantage of this opportunity. However, there are Indigenous people who can take advantage of a TFSA and should.

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.


Stress Test, Season Two

Good news podcast fans. Stress Test, the young-adult-focused personal finance podcast I’m recording with Globe personal finance editor Roma Luciw is preparing to launch for a second season. Listen to the trailer and season one now – and subscribe to get season two in your feed.


The money-free zone

A song I keep coming back to, sad vibe and all. Khala My Friend, by a band called a Amanaz. Traditional Zambian music mixed with rock.


ICYMI

What I’ve been writing about
  • On the eve of the Aeroplan relaunch comes a new credit card that rewards the stay-at-home life
  • What investors need to know to make it through the uncertainties ahead (for Globe Unlimited subscribers)
  • Three ways for investors to load up on ETFs without paying any commissions (for Globe Unlimited subscribers)

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:

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