EQ Bank Savings Plus Account Review 2021

ElitePersonalFinance
Last Update: February 6, 2021 Loan Reviews

Online banks offering high-interest savings accounts have become very popular. Even a group of people called “rate chasers” that move funds from an account to an account always look for a slightly higher yield. The introduction of Equitable Bank’s high yield savings account is an exciting new account for “rate chasers” and average “savers” alike. They launched in January of 2016, available only in Canada (with the exclusion of Quebec), and offered 3% rates on these savings accounts. They expected to see 10,000 signups in the first year but saw over 17,000 in the first six weeks.

This account is called the Savings Plus Account, and it is an easy sell for most people. If you are looking for high yield savings account to place funds in and watch them grow, this account may be for you.

Who is Equitable Bank Canada?

Equitable Bank is a Canadian bank that has been around for over 40 years. They are the ninth largest independent bank in Canada. Equitable Bank currently has more than 500 employees and was awarded “one of Canada’s best employers” for 2016 by Aon.

Equitable Bank (also known as EQ Bank) is a digital-only bank. This means that they have no physical branches for customers to walk into. They allow only online banking through their website, over the phone, and via mobile apps.

Pros:

  • 2% interest rate on your balance.
  • No minimum balance.
  • No monthly fees.
  • Unlimited transactions, which includes.
  • 24/7 customer service.
  • 5 free Interact transfers monthly.

Cons:

  • No debit card.
  • No ATM cash access.
  • No joint accounts.
  • Not available to residents of Quebec.

Why No Debit Card?

Who would want to bank without instant access to their cash? How can you use your funds if you do not have a debit card? The answer to this is that EQ Bank does not want you to have instant access to your funds. Their goal as a bank is to help people like you save more money and prepare for your financial future. To do this, you need to set savings goals, move funds into savings accounts and then not touch them for long periods of time.

By not allowing you instant access to your funds when you may be out binge-shopping, you cannot make rash decisions and tap into your savings when you shouldn’t. To make a purchase, you would have to transfer the funds to another account and wait a couple of days or do an Interact transfer.

Adding these necessary steps makes it more difficult for you to make poor spending decisions. These accounts are really designed to complement your existing accounts and are not intended to replace them.

The best use of a high yield savings account is to set up automatic fund transfers every month and never touch the money again. This way, your savings are growing and not diminished by careless spending.
The Branchless Model.

What does it mean to be a branchless bank? EQ Bank has no physical locations for you to walk into. They are an online-only bank powered solely by their website and mobile app. They intend to make banking more convenient and cheaper at the same time.

How Can They Offer Such High Rates?

Equitable Bank holds many higher interest mortgage loans, the average rate of which is just over four percent. This gives them a small margin to work with. Also, EQ Bank has lower costs than many other banks because they don’t have expensive buildings and storefronts. They keep their operating expenses significantly down by existing only online. They are banking on these two factors allowing them to offer these high-interest savings accounts.

Comparison of Bank Rates

The top high-interest savings bank offers are:

  • EQ Bank – 2%
  • Alterna Bank – 1.95%
  • Luminus Financial – 1.75%
  • Oaken Financial – 1.75%
  • Outlook Financial – 1.7%
  • Achieva Financial – 1.7%
  • Steinbach Credit Union – 1.6%
  • Scotiabank – 1.5%
  • Meridian Credit Union – 1.5%
  • BMO Bank of Montreal – 1.25%
  • Canadian Western Bank – 1%
  • Tangerine – 0.8%
  • PC Financial – 0.8%
  • ATB Financial – 0.7%
  • TD Canada Trust – 0.55%
  • RBC Royal Bank – 0.55%
  • CIBC – 0.55%

Complaints About EQ Bank

When they first launched the new high yield account, they were inundated with applications and could not meet the demand. During the first few months, there were many complaints raised. These complaints included:

  • The slow response rate to signup application – many waited weeks after signing up without hearing anything from EQ.
  • No response to customer service emails.
  • No answer to customer service calls or long wait times on hold.

The company was not expecting the overwhelming amount of applications that they received upon the initial launch of this product from what we have read. They had over 17,000 signups in the first two months.

Andrew Moor, CEO of EQ Bank, stated that he was surprised by how many people were willing to embrace EQ without having heard of them before.

So clearly, they were just unable to keep up with the demand. Fortunately, they took the following steps to ensure customer satisfaction:

  • EQ Bank hired more customer service staff.
  • They limited the number of daily signups and created a sort of wait-list.

The Savings Plus Account Signup Process

The Savings Plus Account signup process claims to take only 5 minutes. Here are some of the requirements you need to sign up:

  • You must be 19 years of age or older.
  • You must be a Canadian resident.
  • It would help if you had a personal cheque ready to send in as a deposit.
  • You must have your Social Insurance Number.
  • It would help if you reside outside of Quebec – this is the only province that EQ does not operate in.

Funding your savings account:

For the initial funding of your account, you must send in a cheque from your primary banking institution, which will actually serve two purposes:

  • Your account will be funded based on this deposit.
  • The link between your two banks will be created based on this deposit, which will allow for bank transfers to and from EQ Bank at any time.

Overall, the Savings Plus Account from Equitable Bank is a great high-interest savings account, and it is not too good to be true. It competes with all of the biggest players in this space and serves its purpose very well.

There truly are no fees:

  • Deposits including mobile cheque deposits – FREE
  • Electronic funds transfer – FREE
  • Interac e-Transfers – 5 FREE monthly, and $1.50 each additional
  • Bill payments – FREE
  • Receiving Interac e-Transfers – FREE
  • Set and track savings goals – FREE
  • Opening or closing account – FREE
  • Transaction history inquiry – FREE
  • Non-sufficient funds fees for returned items – FREE
  • Assisted service transactions – FREE
  • Canceling transactions – FREE
  • Dormant account notice – FREE
  • Unclaimed balance for ten years – FREE

There are a few limitations to be aware of, including:

  • Cheque deposit limits of $25,000 per cheque.
  • Bill pay limits of $5,000 per bill.
  • An interface-Transfer daily maximum of $2,500.
  • Interface-Transfer weekly maximum of $10,000.
  • Interface-Transfer monthly maximum of $20,000.
  • EFT limit of $30,000 outbound and $100,000 inbound.
  • Insurance limit of only $500,000 per customer (also keep in mind that this includes your mortgage if you have a mortgage loan with EQ Bank).
  • No debit cards or cheques.

Interest is calculated daily based on the total closing balance and paid monthly based on these calculations.

If any fees are going to be introduced, EQ Bank promises to send out an electronic notice to customers at least 60 days before the change coming into effect. These notifications would come in writing via the secure message center on the website or mobile app.

We recommend that you decide what amount of cash you can dedicate to your long-term savings goals and consider investing it in this EQ Bank account. This should be money that you do not need anytime soon, and that is strictly in this account to meet your savings goals. Be realistic, and understand that it may take some time to open your account and get the funds in place.

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