Rob Carrick says a rate cut of the size recently made by the Bank of Canada is a blow to savers and people who park cash in their investment accounts
EQ Bank used that phrasing it an e-mail I received after the Bank of Canada lowered its overnight rate last week by half a percentage point, and so did Wealthsimple. EQ will pay 2 per cent on its personal account as of Oct. 29, down from 2.25 per cent; Wealthsimple started paying 2.75 per cent on its Cash account on Oct. 28, down from 3.25 per cent.
The same applies for investors parking cash in their accounts. Returns from investment savings accounts, which are basically savings accounts sold through your broker’s mutual fund platform, are now in the area of 3.3 per cent, down half a point. Expect similar declines from high interest savings exchange-traded funds and T-bill or money market funds.
EQ was once a high-rate leader, but it’s now mid-pack on rates and concentrating on adding features and functionality to its account lineup. EQ is micro-targeting some customers by offering 3.75 per cent interest as of Oct. 29 on accounts where eligible direct deposits like a paycheque have been set up, and it seems to be holding the line on rates for its “notice accounts,” where withdrawals must be made with prior notification.
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