The savings accounts of Canadians have sprung a leak. As inflation tops eight per cent, anyone with money in the bank is seeing their savings drip away at the fastest rate on record because interest rates for savings accounts, still largely languishing at around one per cent, haven't kept up.
, anyone with money in the bank is seeing their savings drip away at the fastest rate on record because interest rates for savings accounts, still largely languishing at around one per cent, haven't kept up.
"When there is lower competition between banks, then it takes more time for them to adjust rates on deposit accounts.""When banks don't increase rates on deposits they're making more profits ... It's a very easy way to make profits, to have a low rate on deposit accounts." "Banks are very quick to pass on the higher interest rates on the borrowing side but are much slower to do so for those that are seeking to save," said Macmillan.
"As more Canadians are getting more comfortable shopping around or moving to a bank that they might not recognize as much, kind of the big five, big six banks will start to feel that competitive pressure, and increasingly start to change their rates accordingly." De Souza noted that credit unions offer higher rates in part because they're designed to serve members, and not just make a profit for shareholders like banks, but that there is still some hesitation among consumers.
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