EQ Bank Retirement Savings Plan Review

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I’ve been a massive fan of EQ Bank ever since they came to the market with great interest rates, but admittedly, it was a bit disappointing that they didn’t have a Retirement Savings Plan (RSP) available. Well, that’s no longer an issue as the EQ Bank Retirement Savings Plan has just been introduced.

As you can imagine, it follows a similar model to the Savings Plus Account. As in, you’ll get a simple account that pays a respectable amount of interest with no monthly fees. Read my EQ Bank Retirement Savings Plan review now for everything you need to know about the account.

EQ Bank RSP features

  • RRSP Savings Account
  • 1.35%* everyday interest rate

The EQ Bank RSP is pretty basic and comes with two features. You can deposit money into your RRSP Savings account, which pays you a decent amount of interest. You also have the option to purchase RRSP GICs. The interest rates for GICs mirror the existing EQ Bank GICs.

You’re unable to purchase ETFs, mutual funds, stocks, etc., within your EQ Bank Retirement Savings Plan, so it’s really meant for people who are looking for fixed income investments. That could be for people who plan on using some money for the Home Buyers Plan or even people who have retired and want to earn some interest on their cash that’s sitting in the RSP.

Contributions are made online, but you need to reach out to the contact center if you need to make any withdrawals. You can also link your RSP to your Savings Plus Account.

You can only have one RSP plan set up with EQ Bank, and currently, there are no Spousal RSP and Locked in RSP/Retirement Accounts (LRSP/LIRA) available. There is a plan limit of $1,000,000.

To open an account, you must have an Savings Plus Account, which also has no monthly fees.

EQ Bank RSP contributions

The only way to make contributions to your EQ Bank RSP is to do it online from your Savings Plus Account, Joint Account, or via an electronic funds transfer.

You can also transfer funds from another RRSP account that’s with another financial institution but it requires a few steps. First, you need to initiate the transfer-in process online through self-service. After that, the contact center will complete the interbank process manually. Here’s a more detailed guide on how to transfer your RRSP to another financial institution if you’re interested.

EQ Bank RSP withdrawals

If you need to withdraw from your EQ Bank RSP, it needs to be done through the contact center. There is no online self service. Standard tax rules do apply. That said, you can withdraw from your RSP without having to pay taxes for one of the following reasons:

  • Home Buyers Plan (HBP)
  • Lifelong Learning Plan (LLP)

Any funds withdrawn would be sent to your Savings Plus Account or Joint Account. You can then transfer the money to wherever you’d like.

Tax documents

T4RSP and contribution receipts are typically available to clients in January. They are available online only, so you can just download them if you need a physical copy. All contributions and withdrawals are reported to the Canada Revenue Agency.

How does the EQ Bank Retirement Savings Plan compare to others?

Comparing the EQ Bank Retirement Savings Plan to others is not really easy to do as it depends on your goals. It’s fair to say that the EQ Bank RRSP Savings Account pays more than other savings accounts that can be held within an RRSP at other banks. Some people may also prefer the EQ Bank RRSP Savings Account over a money market fund since the interest rate is more predictable.

However, if you’re looking to invest in equities such as ETFs, stocks, and mutual funds, you can’t do it with the EQ Bank Retirement Savings Plan.

Why use EQ Bank?

Since the EQ Bank Retirement Savings Plan focuses on fixed income investments, it’s ideal for people who want to invest their money in low risk products. For example, if you’re planning to buy a home in the near future and plan to use the Home Buyers Plan, parking your money in the EQ Bank RRSP Savings Account guarantees that the money you have in won’t go down in value.

Now let’s say you’re approaching retirement and you want to ensure that your nest egg is safe. Many people start dedicating a portion of their portfolio to fixed income investments. The EQ Bank RRSP Savings Account or RRSP GICs are a great option to put your money.

Is EQ Bank safe?

Some people aren’t familiar with EQ Bank, so they wonder if the company is safe. In case you didn’t know, EQ Bank is a trademark of Equitable Bank, who’s a Member of the Canadian Deposit Insurance Corporation (CDIC). That means each eligible account is protected up to $100,000.

Under CDIC, your personal account, joint account, and RSP are all considered separate accounts. That means if you had all three, you would have up to $300,000 in coverage.

Final thoughts

When you look strictly at what the account is intended for, my EQ Bank Retirement Savings Plan review is positive. People who want to put their RSP in fixed income investments should consider opening an EQ Bank Retirement Savings Plan.

EQ Bank Retirement Savings Plan Review

About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi

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