My EQ Bank review has been updated and it now includes the new prepaid Mastercard which also serves as a debit card. For those unfamiliar with EQ Bank, they’re a digital bank that’s been providing consistently high-interest rates. There’s no need to chase promotions with EQ Bank since what they offer is consistently competitive.
The safety of your money is always important, but so is the customer service experience. EQ Bank is focused on providing a better banking solution that will help Canadians reach their savings goals faster. Here’s my EQ bank review of their Savings Plus Account.
- $20 referral bonus (must fund account with $100 within 30 days)
- 2.5%* Interest rate
- No everyday banking fees
- Unlimited day-to-day transactions
- No minimum balance required
- Unlimited free Interac e-transfers®
- Free electronic fund transfers
- CDIC Member
One of the biggest complaints from Canadians is the lack of a reasonable interest rate with savings accounts. Since EQ Bank’s rate of 2.5%* is available to everyone and not just a limited time rate, it makes the account very attractive. The high-interest rate is obviously an attention grabber, but the other benefits of the account are quite good too.
No monthly fees, unlimited day-to-day transactions, and no minimum balances are common in the online world, but for whatever reason, have been slow to adapt by the big six banks. To be fair, bricks and mortar banks have much higher operational costs since they have retail locations and staff to pay. EQ Bank is branchless and completely digital so the savings are passed on directly to their clients.
The EQ Bank Savings Plus Account combines features found in chequing accounts with savings accounts. You can deposit cheques (including mobile cheque deposits) and set up a direct deposit from your payroll. You can also link an external bank account to EQ Bank, so moving around your money will be easy.
Accessing your money is pretty straightforward since you would link your EQ Bank account to your regular bank account, but it does take up to two business days to transfer any funds. If you want to speed up the process you can get access to your money within 30 to 60 minutes by using your unlimited free Interac e-Transfers®.
All these features should have both savers and investors excited. You can simply park your money and get a guaranteed return (minus taxes of course) with zero risks. With EQ Bank, your interest is paid monthly, and there’s no holding period.
Although EQ Bank has been around for a few years, some potential clients tend to be suspicious of the high rates being offered. The good thing is, EQ Bank is owned by Equitable Bank, a member of the Canadian Deposit Insurance Corporation so your accounts are protected up to a maximum balance of $100,000.
One thing to note is that when you open up a new account, EQ Bank will perform a soft credit check to confirm your identity. This does not affect your credit score, so it shouldn’t be a big deal.
Despite all of these great features, EQ Bank is available in all provinces and territories except Quebec.
EQ Bank card
- No monthly fee
- Free withdrawals from any ATM in Canada
- Cash back on every purchase
- Earn interest on your savings
- No FX fees
One of the biggest complaints about EQ Bank in the past was that you couldn’t withdraw cash from ATMs. Well, that’s no longer an issue as the EQ Bank card has been announced. This no fee reloadable Mastercard requires you to transfer funds to the card first, but then you’ll be able to withdraw funds from any ATM for free. Technically speaking, the ATMs will charge you a fee to withdraw the funds, but EQ Bank will reimburse you for those funds after.
What makes this prepaid card highly appealing is that there are no foreign exchange fees when making purchases with the card. Mastercard does add a slight markup that’s built right into the exchange, but you won’t pay the standard 2.5% fee that most credit cards charge.
In addition, any money loaded onto the card earns interest at the same rate as the EQ Bank savings account rate.
Other accounts available from EQ Bank
EQ Bank has finally introduced RRSP and TFSA accounts. These are separate products from the HISA account. Note that you do need to open an EQ Bank Savings Plus Account if you want to set up an RSP and TFSA account.
Both the RSP and TFSA will be limited to a savings account and GICs. What that means is you won’t be able to invest in stocks, mutual funds, ETFs, etc., within these accounts. The standard rules apply to both these accounts e.g. contribution and withdrawal limits.
The USD account has become quite popular since it also pays interest on your deposits
Why use EQ Bank?
Many people are hesitant to switch banks (we all know they don’t make it easy), but EQ Bank shouldn’t be viewed as a replacement. It’s meant to complement your daily banking needs.
It doesn’t matter if you’re saving for a vacation, school, or a new pair of boots, the EQ Bank Savings Plus Account allows you to open an unlimited amount of sub-accounts to meet your needs. The added option of setting savings goals for each individual account is a bonus since you can clearly monitor the progress of your savings. Best of all, your money is never locked in with the EQ Bank Savings Plus Account. You can withdraw your money whenever you need to.
Saving is obviously the theme of the account, but you can also do day-to-day transactions directly from the mobile app including transferring funds and making bill payments. EQ Bank does not allow your account to go into overdraft so you won’t need to worry about being charged extra bank fees; it’s the lack of available money that I’d be concerned about.
There’s no catch. Even though EQ Bank gives you an above-average interest rate, they make their money by lending out your deposits to other people at a higher interest rate. This is standard practice for any bank, but since EQ Bank is a digital bank, they have less overhead compared to traditional banks.
EQ Bank does allow is pre-authorized payments. This means you can do all your daily spending with one of the best travel credit cards in Canada or one of the best cash back credit cards in Canada and then set your card to be automatically paid from your EQ Bank account. By doing this, your money is only withdrawn once a month from your EQ Bank account so you’re basically earning the maximum interest and getting credit card rewards at the same time.
Despite the fact that EQ Bank has no physical locations, you can contact customer service through live chat, phone (from 8am – midnight), or email.
EQ Bank joint accounts
It may have taken a few years but EQ Bank finally has joint accounts which are obviously handy for people who want to set up an account with someone else. Best of all, EQ Bank joint accounts allow up to 3 people which is perfect for a variety of reasons such as elderly parents who want their adult children to have easy access to their funds.
The same interest rate applies to joint accounts. It’s also worth mentioning that CDIC considers joint accounts separate from your main account, so you get another $100,000 insured by them.
Is EQ Bank safe?
I already covered this above, but I want to go over it again. EQ Bank is safe and it’s unlikely to go out of business. The reason you can trust EQ Bank is that they’re owned by Equitable Bank. In case you didn’t know, Equitable Bank has been in operation since 1970 and is a member of the Canada Deposit Insurance Corporation (CDIC).
Any person who has their money deposited at a CDIC member will have their accounts protected up to $100,000 under CDIC protection. If you need more deposit insurance, you could have your spouse open a joint savings account which would give you another $100,000 in protection.
To be clear, it’s still possible for a bank to fail, but this applies to all banks. Just because EQ Bank is giving its customers a higher interest rate, that doesn’t mean they’re riskier. I personally use EQ Bank to park the majority of my cash savings.
EQ Bank refer a friend
Just recently, EQ Bank introduced a referral program where the person signing up gets $20. If you’re the one making the referral, you also get $20, but that amount increases depending on how many people you bring aboard.
- $20 – For your first 3 referrals
- $30 – For your next 4 referrals
- $40 – For any additional referral
The referral bonus is capped at $500, so that means you’ll reach the maximum after 15 referrals. Remember, you only get the referral if the person who is signing up for an EQ Bank Savings Plus Account deposits at least $100 into their account within 30 calendar days of account activation.
EQ Bank GIC
EQ Bank’s other major product available is guaranteed investment certificates (GICs). GICs are a type of investment that guarantees you a return. The “catch” is that you need to lock in your money for the time you specify. The longer you lock in your money, the higher the interest rate you get. Investing in a GIC can be beneficial if you know you won’t need that money for a set period of time. As EQ Bank’s GIC rates are always changing, I won’t list what’s available now, but the terms are as follows:
- 3 Months
- 6 Months
- 9 Months
- 1 Year
- 15 Months
- 2 Years
- 27 Months
- 3 Years
- 4 Years
- 5 Years
For you to purchase an EQ Bank GIC, you must have an EQ Bank Savings Plus Account.
How does EQ Bank compare to others?
To be realistic, all digital banks are similar, but I do like to separate them into tiers.
Motive Financial is their closest competition when it comes to interest rates, but they’re pretty similar. LBC Digital is another bank that came in with aggressive rates when they launched, but their rates are a bit lower now.
Then there are banks such as Tangerine and Simplii which are owned by bigger banks (Scotiabank and CIBC respectively) who give you access to an ATM network, but their interest rates are much lower.
One feature that EQ Bank excels at compared to similar online banks is international money transfers. EQ Bank is partnered with Wise (formerly Transferwise) to offer some of the best exchange rates.
I personally use EQ Bank for all my personal banking, but I also use Tangerine because my wife and I have old accounts there. I’ve linked my EQ Bank account to my Tangerine account so I can easily transfer money between the two. You don’t need to use one online bank, just pick the ones that make the most sense for you.
Overall my EQ Bank review is positive. The interest rate is higher than average daily rates and you can access your funds with a physical card. It’s clear that EQ Bank respects its clients’ money and values their business.