“Ok, so I’ve got… $4,000, give or take. And I need… OK, about $20,000. In a year. Good. This is fine.”
That was me when I sat down about 18 months ago to get real about saving up for my half of a down payment on a home with The Boyfriend.
And when I say “this is fine,” I hope you know this was the gif I was referring to, and how I actually felt about the goal.
See, at the time I was probably saving about $600 a month towards the goal of someday-home-ownership.
That sounds like a lot, right? But over the course of a year, it would mean I’d end up with a grand total of $11,200 – a whopping $8,800 short of my goal.
I knew I had to give myself every advantage, and optimize the heck out of every part of my finances to make it happen. That’s one of the biggest reasons why I moved my house down payment savings account over to EQ Bank.
EQ Bank is an online-only bank that currently offers Canadians 2.3% on their everyday savings, and I’ve been a huge advocate of their service since I started using them right around the time I got serious about my house savings.
They’ve been there for me, casually paying me dozens of dollars a month in sweet, sweet interest, and today I want to break down exactly how it all worked – and how much I actually earned in interest over the past year.
First up, interest
When I first started banking with EQ Bank, they were still offering 3% interest on savings accounts, and I got in just before they
broke the internet set up a wait list to get an account.
Sure, that amount went down to 2% shortly afterwards, but let’s be real: The “high interest” savings at most banks doesn’t even come close to 1%. So since I wanted to keep my money safe – I needed to use it in a year, after all – and bump up how much I was earning on it to help my down payment goal, this was my go-to solution.
EQ Bank’s interest rate is back up to 2.3% these days (yay for my emergency fund and tax savings that live there now!) but if all these percentages seem a little vague, here’s what that actually meant for my savings over the past year.
Literally, cash money
Over the course of my journey from $4,000 in savings to $20,000 in savings for my down payment, I contributed $15,956.41 (and if you’re wondering how I managed that, this is the best explanation I can give you).
If you’re over there doing some air math, you’ll realize that contributing $15,956.41 left me $343.59 short of my goal. So where did that extra few hundred dollars come from?
Interest. (Obviously. I mean, we’re not surprised by this, right? We knew this was coming?)
Still, even if that wasn’t much of a big reveal, it does end up working out to about half of the amount I was contributing monthly before I started ramping up my savings rate – and it’s not nothing.
In fact, if I’ve learned anything from the entire home buying process, it’s that if you can get over $300 for doing what feels like nothing? Take the money. You will 100% need it to cover something, because buying a house is the opposite of cheap.
Keeping my eye on the prize
Were there times during the year when I thought to myself hey, maybe instead of saving a bananas amount of money towards the house, I should do literally anything else instead? Yes.
I mean, obviously. I’m human. Delayed gratification isn’t our natural state.
But I’m a big believer in setting tangible, SMART goals, and reaching them. Who am I to argue with the effectiveness of writing down your goals?
Luckily, EQ makes it easy to keep your goals top of mind. In each account you have, you can set up a savings goal, and every time you look at your account, it’ll remind you how close–or how far–you are from hitting it.
Here’s an example, if you wanted to save up $20,000 by August of 2020 (not unreasonable, but also not a crazy-long timeline either).
From one window, you can nickname your account (which I am a huge fan of, by the way) and add in a savings goal. Once you do that, you’ll see your goal progress every time you look at the account.
If that’s not an incentive to find an extra $50 a month to save… I don’t know what is.
Your money is totally covered
One of the biggest things I tell people about why EQ Bank makes sense for some of my bigger savings accounts is that it’s a safe place to keep your money. Usually, I’m referring to the fact that no, I am not here for putting money I need in the next five years into the stock market (that’s bad news bears, personified) but there’s also the whole CDIC thing.
CDIC – aka the Canada Deposit Insurance Corporation – insures any money you deposit at member institutions, up to $100,000. That way, no matter what happens, that money is safe. All of the major banks are members, and so is EQ Bank – so if you’ve got under $100,000 with any member institution, you’re covered.
Bottom line: this is where I keep my big savings
When EQ Bank approached me to collaborate on this article (because this is clearly a collab, you guys are not surprised) I was thrilled about the opportunity, because if you’re a Canadian who has asked me where I recommend saving things like a house down payment, or an emergency fund, that you might need in the next little while?
I have consistently said EQ Bank since I started using them.
Sure, I did take my house down payment out of my account, but it’s only because I used it to pay for the new-to-me room I’m sitting in as I type this (photos coming once I get everything fully set up!)
I’m really happy that there’s an option out there for Canadians to save their money, access it anytime they need to, and still earn a really competitive interest rate to top up their savings goals.
And I mean, selfishly? I’m just happy it’s an option for me.
So as a special treat for my readers to get your own savings started – for whatever you want to save for this summer! – new accounts opened have the chance to win one of 10 $150 deposits into your new savings account. That’s a good kick start to just about any goal!
PS. If it wasn’t clear, this post was a paid collaboration between me and EQ Bank, but all opinions – and financial details, lol – are mine!