I have a very boring and very predictable answer when people ask me where they should stash things like their house down payment savings.
“Are you in Canada? Then my answer is EQ Bank, no question.”
I recommend them in comments and emails and posts so often for a reason: they’re who I actually used to store all my big savings goals. That included our house down payment savings and our closing costs, and these days, it’s where I keep my tax savings.
But instead of leaving it at that, I wanted to put together a full review of EQ Bank to help break down why I recommend them, and address some of the most common follow-up questions I get when I do.
EQ Bank Review: You might be wondering…
- What is EQ Bank?
- Who can use EQ Bank?
- Who should use EQ Bank?
- What’s the experience like?
- What should you do after using EQ Bank?
- What’s the best part about EQ Bank?
- What’s the worst part about EQ Bank?
- How much does EQ Bank cost?
- Any hidden fees or tricky parts?
What is EQ Bank?
EQ Bank is an online-only bank that offers high-interest savings accounts (called EQ Bank Savings Plus Account) and guaranteed investment certificates (GICs).
If you’ve heard of them before, it’s probably for their ultra-competitive interest rates: they pay 1.70% interest* on your everyday savings, and more than that on their GICs depending on how long you lock your money in for.
Who can use EQ Bank?
Anyone who lives in Canada can open an EQ Bank account, except residents of Quebec at the moment.
Who should use EQ Bank?
I’m just going to call it right now: if you are saving for a short-term money goal at your big bank, literally any short-term money goal, you should have an EQ Bank account.
Saving for a house down payment? EQ Bank account.
Saving an emergency fund? EQ Bank account.
Saving for taxes if you’re a freelancer? EQ Bank account.
Saving for a big vacation or a wedding? EQ Bank account.
Literally any time anyone asks me where to keep their short-term savings, I always tell them to open an account with EQ Bank for two main reasons.
The first one is obviously the interest rate. If you have a lot of money just sitting in account, because it’s supposed to be sitting in an account, it might as well earn you more money.
But there’s a bigger benefit than the dozens of dollars you could be making every month (yes, dozens, seriously). If you have that much money and you want to make sure it stays in savings, it’s much easier on a psychological level to forget it’s there when you don’t see it every day.
For accounts you’d really rather not tap into on a monthly basis, separating them out into your EQ Bank account and hiding them behind one extra login can be the difference between spending them and finally sticking to your savings goals.
What’s the experience like?
Really, really easy to use.
Because EQ Bank doesn’t try to be everything to everyone, the interface is gloriously simple. It’s savings accounts. You can add and withdraw money, you can set up clear savings goals, you can see your recent transactions, and keep tabs on how much further you have to go until you hit your goal.
Is it the most unbelievably slick interface in the world? No, but it’s pretty great, and it does everything you could want to do in a simple, straightforward way.
To set up an account, you’ll need to validate your identity, and the easiest way to do that is to connect your EQ Bank account with your existing bank account. Not only does this skip dealing with physical documents, it connects your existing account to your new EQ account.
What should you do after you’ve set up an account at EQ Bank?
Since I’m going to assume you opened an account to save some money—they’re savings accounts, after all—there are two key things you’re going to want to do once you’ve connected an account and authenticated with your existing bank account.
One, set up your savings goal. All you have to do is put in an amount you want to save, and the date you want to save it by. EQ Bank will keep track of your goal for you, show you a handy progress bar (motivating af!) and you’ll easily be able to see how you’re doing—and when you’re done.
Two, set up an automatic contribution. Once you’ve got an account with a goal, the best next step is to automate your savings. You can set up recurring savings contributions from your external account to align with your pay schedule, so you literally don’t have to think about it again until the money is saved up and ready.
What’s the best part of EQ Bank?
There is a lot that I like about EQ Bank, but I’ve got to say, the interest is baller. Right now, I’ve got two main savings accounts with them, holding my emergency fund and my tax savings.
Instead of paying bank fees to stash my money somewhere, EQ Bank is currently paying me about $25 in interest every single month.
Twenty-five dollars. Every month! That’s like one full Starbucks card reload!
The high interest rates you can earn on your savings are an easy way to optimize your money, and they’re nothing to sneeze at. The interest is paid out at the start of every month, so it compounds, too.
What’s the worst part of EQ Bank?
Because it’s a separate bank, transferring money to and from your “primary” bank will take a few days.
Just like it would from any bank to any other bank.
It’s really a very small hassle, but “how is the transfer process?” is something that I get asked more than anything else about EQ Bank. So here is the low down on moving money in and out.
Once you’ve linked the accounts, moving money into your EQ Bank account is as simple as setting up a one-time or recurring transfer in your EQ account. The great part is that while it’ll take a few days for the money to be available in EQ Bank, they recognize the transfer as soon as you make it—so you start earning interest right away. Sah-weet.
Moving money out is a similar process. You just set up a transfer from your EQ Bank account to your external account, and hit “Send”. It’ll take the same few days to actually show up in your other account, so make sure you plan accordingly.
When I withdrew money for our house down payment and closing costs, I made sure to transfer the money over a week ahead of time when it was being drawn from my chequing account. When I could put it on a credit card, I’d do that, initiate the transfer, and the money would be easily available before my credit card needed to be paid off.
PS. You also get unlimited free Interac e-Transfers® every month, so if you really do need the money omgrightnow? You can email transfer it to yourself and have it within minutes.
How much does it cost?
It’s freeeeeeeeee.
Seriously, it’s free. You can have up to four savings accounts, all of which are free, and you get five free Interac e-Transfers® every month. There’s no minimum account size, no monthly fees, and you have unlimited bill payments and EQ-to-EQ transfers if you want either.
You can link up to 10 accounts for free, and transfer money to and from your linked bank accounts for free.
Any hidden fees or tricky parts?
There was always one thing that I had to remind myself once I set up my automatic contributions from my chequing account.
While the savings contribution will show up right away in EQ Bank, it usually takes a day or two for the money to actually come out of your chequing account. So if you’re watching your bank account like a hawk, you’ll get paid, have your other automatic contributions come out, pay your bills, and see a number left over in your account at the end of payday.
You just have to remember that your other automatic contributions are going to come out a day or two later, so you need to remember that some of that “leftover” money is already spoken for.
But on the bright side there are no hidden fees!
Also this is a very minor hassle for how major some hassles can be with financial products.
Bottom line?
Can you tell I love EQ Bank? Because I really love it, and suggest it to every Canadian with a savings goal. There’s no reason you need to leave thousands of dollars sitting around earning pennies in interest for years at your regular bank when they could be earning dollars at EQ Bank—especially if getting that chunk of money out of sight will help you stick to your savings goals.
It’s a total win-win.
EQ Bank
Overview
EQ Bank is one of the best high-interest savings accounts you can find online in Canada, with free unlimited Interac eTransfers and high everyday rates on savings and GICs.
Is there a similar bank available to US or international readers? Sounds like a great place to be putting your dollars to work!
I haven’t used them, but I’ve heard good things about the CapitalOne 360 savings accounts, and about Ally, in the States! (My kingdom for the ability to use and test US accounts and fintech products!)
Do they have a deposit guarantee? If so is it on all funds or does it have a limit?
They do! They’re CDIC insured, and all of the information about it is right here: https://www.eqbank.ca/general-banking/deposit-insurance-information Deposits at EQ Bank are covered up to the CDIC insurance maximums, so you’re as safe as you’d be at any bank 🙂
Thanks. I’m going to open a savings account up. Is there a way to add someone as a beneficiary? What would happen if I passed away and the account wasn’t joint. I would like it to pass straight to my husband and not go to probate with my kids estate.
The only downside of EQ Bank is that at this stage they don’t offer registered accounts such as TFSA or RRSP.
Definitely – I’d happily toss my emergency fund into a TFSA because I have the contribution room, but in the trade-off between earning this much interest and how easy they make it to file the taxes on the (still small in the scheme of things!) interest you earn makes it still my preferred place to keep them 🙂
Hi Desirae! Thanks for the post. So the take away is that the high interest outweighs the tax shelter in a TFSA or RRSP?
Hey Soleil! I personally think so, because the difference in terms of math likely comes down to a few dollars here or there. If I pay ~25% in taxes on the small amount of interest I earn, it’s likely still higher than most other accounts, and the benefits of having it both a) in a totally different bank and b) very easily accessible without having to track my contribution room for a TFSA (OR get dinged with huge tax penalties to withdraw from an RRSP) are totally worth it to me. That, especially my comment about the RRSP, is because these are short-term savings like an emergency fund that I might realistically need to spend soon – it might be a different story for other types of savings!
Who can use EQ Bank? Anyone who lives in Canada can open an EQ Bank account, except residents of Quebec at the moment.
That definitely negates the answer you give at the top of the article. 🙁 Quebec is still a part of Canada too. It sounds like an interesting bank, hopefully it opens to Quebec residents soon!
Hi Gabrielle, I’m sorry the phrasing was unclear! That was just a shorthand way of saying everywhere except Quebec, as opposed to listing the other provinces. I hope they’re available to residents of Quebec soon!
My one disappointment is that EQ does not offer a joint account.
It’s so funny, I never even think of joint accounts because neither Tangerine nor EQ offers easy joint savings accounts so I forget that they’re an option elsewhere! That’s where I do all of my banking so I never even remember that it’s offered elsewhere.
I was also surprised you didn’t mention that (last I checked) EQ Bank doesn’t have the option for joint accounts. Although my partner and I are exploring having some separate savings accounts, we’ve typically also shared some of them, and this has made me pause with joining EQ Bank.
Definitely a consideration! None of my regular financial institutions (Tangerine, EQ, Wealthsimple) offer joint savings accounts as far as I know, so I’ve honestly just accepted that my fiance and I save in personal accounts for shared goals and update each other on progress occasionally. Not ideal, but that’s why I forgot to flag it! Not trying to gloss over anything, haha, just not something I personally noticed.
Hallo Desirae,
Out of curiosity, when you say you’re saving your ‘tax savings’ in your EQ account, what do you mean by tax ‘savings means’?
Thank you!
So sorry for the delayed reply! I save separately to pay taxes on my freelance income, so I keep that money at EQ Bank until I have to pay it to the CRA.
The only thing that annoys me with EQ Bank is their customer service. I logged into my account from Montréal (I live in Ottawa) because I needed to update some banking info and they automatically froze my account. Fair enough, I was logging in from a different city. But then I wasn’t able to get to the applicable customer service department until the next business day so had to wait three days (it was a long weekend) to regain access to my accounts. They also have this incredibly annoying thing where they ask you to spell out your full email address over the phone to access your information, and that can result in a lot of misunderstandings.
Sooo love my EQ account, love the interest I’m being paid, but they need to work on their customer service, especially if they’re going to freeze you out of your accounts all willy nilly .
Thanks for this review. Thinking of opening an account strictly for emergency fund purposes.
For EQ bank….. is there a maximum amount you can deposit and get the 2.30% interest on the full amount?
I’ve seen ppl say $100,000 is the maximum deposit amount?
So if you have more than $100,000 to deposit, how does the interest pay out?
I wish they had a TFSA account!!!! ;(
what is your opinion about Alterna Bank, compared to EQ Bank?
Motus bank now offers a 2.50% TFSA account.
I opened EQ Bank account hoping to purchase their 3month 3% GIC – for starters. Opened account and transferred funds on July 15 2019. Funds were not available until July 23 2019. As soon as funds got available attempted to buy GIC’s – system does not allow me to do it citing ‘technical difficulties’. So the promised 3% rate is diluted by 8 days delay from start. And I still can not buy it. Would be moving funds back we’ll see how that works.