Imagine charging you to DEPOSIT your money! Then they take your money and invest it and make much more money than you do! For that reason, I say, INVEST in bank stocks; DO NOT have large sums on deposit for two reasons:
- You make almost no interest compared to index funds
- You get charged interest at the highest tax rate; same rate as if you worked to earn that money. However if you max out your TFSA account even if it is just a high-interest savings account, then you are protecting your savings from TAXES!
There are two+ virtual or online banks in Canada with the highest interest rates They are Achieva at achieva.ca both owned by Cambrian Credit Union. Achieva will give you 1.7% [changes from time to time] in a Hi Interest Daily Savings Account.
Unlike Ontario banks and credit unions in Manitoba EVERY BIT OF YOUR MONEY is insured! That’s a plus especially if you wish to keep over $100,000 in a savings account. I think they know that it would be extremely unlikely for any bank to go belly-up in Canada due to the regulations on them holding a certain per cent of the savings of their account-holders in case there was a run on the funds.
I found Achieva which appears to be bigger as it is owned by Cambrian Credit Union, some 54,000 members strong, established in 1959. Achieva also offers additional services such as the same MasterCards offered by Meridian and other credit unions. They also offer Credential Direct brokerage and Life Events Planner which is basically a bunch of calculators to plan various life events. I do not believe you get anything extra by paying higher fees to brokerages. There are cheaper ones in Canada. Think Questrade and Virtual Brokers. [more later about them]
Royal Bank, for one example, offers a “high” interest savings account where you can REALLY get excited! It earns 0.650%! (November 2015). ON top of that, every time you turn around there is a bank fee to match every movement! 🙂
Think about it! Wouldn’t you like to get 62% more on your savings? Well, join one of these banks and you will! 🙂 It’s a no-brainer.
I signed up online for a Hi Interest savings account and a TFSA savings account which gets the same rate.
Tangerine – My Orange Key is 40661012S1
From now until December 31st 2015, for every friend you successfully refer who opens their first Tangerine Account with an initial deposit of $100 or more using your Orange Key®, you’ll earn a Bonus of $50*, and so will they. That’s double our regular $25 Bonus!
Achieva.ca – Your Referral Petal is: V336405388
Share your Referral Petal with your friends and family and earn up to $100! Every time someone opens an Achieva Daily Interest Savings Account with $250 or more and uses your Referral Petal, you’ll both receive $25.
Banks do have a reputation for fee-ing you to death, which by the way is why they make good investments in their stocks but NOT in using them for daily savings.
January 2015 Addon: Moved my savings to Achieva and have been making good interest ever since!