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Simplii high interest savings account review
Money.ca / Money.ca
Quick overview
High interest savings accounts can be a great place to store your money short-term. However, I’ve always thought the name is a bit misleading – what’s considered high interest, anyway? With the Simplii Financial high interest savings account (HISA), you get an attractive promotional interest rate of 6% for the first five months (this offer expires April 30, 2024.) Limits apply. After that, though, your interest drops drastically… unless you store a lot of money in your account. Read on to learn more about the benefits of the Simplii Financial high interest savings account, the drawbacks, and whether or not it’s right for you.
Who’s this account for?
High interest savings accounts are generally suitable for most Canadians and Simplii Financial’s is no exception. I like to think of HISAs as a hybrid of savings accounts and GICs – they’re a way to save for the short-term (similar to your regular, run-of-the-mill savings account) but they typically offer higher interest (similar to a GIC) than a standard savings account.
Generally, you might be interested in a Simplii HISA if you’ve got short-term savings goals. It’s a place to keep your emergency fund or a lump of cash you’re saving for a short-term purchase, like a trip. It’s highly liquid (meaning you can access the funds in a pinch) while also earning more interest than a standard savings account. After all, why shouldn’t your money help you make more money?
Open a HISA account nowSimplii Financial high interest savings account pros and cons
Pros
-
High interest rate of up to 5.5% (though you’ll need a lot of money to qualify for this rate. Like, a lot of money – we touch on this later)
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Money in the account is liquid (easy to withdraw)
-
Can use your card at any CIBC bank machine
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No monthly fees
-
No minimum deposit
Cons
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Tiered interest rates are low unless you have a lot of money
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You have to pay tax on money earned in a HISA
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Limited withdrawal options
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Inactivity fee of $20 per year
How to open a Simplii high interest savings account
Opening a Simplii HISA is, well, simple.
- Visit Simplii.com
- Click accounts
- Click high interest savings account
- Click the Open an account button
- And go through the steps
You’ll have to answer a few personal questions, including your citizenship, what you’d like to use the account for, and some other personal details, including your name, date of birth, address and social insurance number (SIN). Your SIN is used for tax purposes and providing it is standard for accounts like this.
Simplii high interest savings account
Let’s dive a little deeper and get to know the Simplii high interest savings account. The first thing you’ll want to know is what is Simplii Financial’s high interest savings account rate, right? And the answer is: It depends. Simplii has a tiered rate structure that offers higher interest the more money you have saved.
| Balance | Savings rate |
|---|---|
| $0.00 to $100,000.00 | 0.4% |
| $100,000.01 to $500,000.00 | 0.65% |
| $500,000.01 to $1,000,000.00 | 1.25% |
| $1,000,000.01 and up | 5.5% |
It’s important to keep in mind that high interest savings rates, like mortgage rates, fluctuate over time. So, you’ll want to check back often to see what rates are offered. As for how interest is earned, it’s calculated daily and deposited into your account monthly.
You can deposit money into your account at any CIBC ATM. As for cheques, they can be deposited either at a CIBC ATM or via the Simplii app. Withdrawing money is a bit more complicated since the HISA doesn’t have e-transfer or debit capabilities. To withdraw money, you’ll need to transfer it to a Simplii chequing account to access the funds via any CIBC ATM machine.
When it comes to fees, Simplii doesn’t charge a monthly fee for its high interest savings account. It does, however, charge a yearly inactivity fee of $20. So it’s important to use your account if you open one.
Is my money better in a Simplii Financial GIC or TFSA?
Hate to break it to you, but there’s no silver-bullet correct answer to this question since it depends on the person and their goals.
Why you might prefer a GIC: GICs (or guaranteed investment certificates) are a type of locked-in investment.
How they work is you purchase a GIC for a set amount of years by depositing a set amount of money for a specific amount of time. Say you want to invest $5,000. You can choose to purchase a GIC for a length of time ranging from one to five years and earn a set amount of interest over that time.
Here are the current rates offered by Simplii for their GICs:
| GIC term | Compound interest rate |
|---|---|
|
1 year
|
4.889% |
| 2 year | 4.266% |
| 3 year | 4.170% |
| 4 year | 4.170% |
| 5 year | 4.170% |
The length of time you choose is referred to as your investment term. And it’s important to note that you won’t have access to that money until the term is up. So, if you choose to invest that $5,000 in a 5-year GIC, you can’t withdraw that money until the term is up.
The good thing about GICs is that your money is safe, since the investment rate is guaranteed and there are no surprises. You know how much you’ll have earned by the end of the investment term. The bad thing is the lack of flexibility. Simplii Financial GICs are a type of GIC that are non-redeemable, meaning you can’t take your money out until the GIC term is up. If tough times hit and you need access to additional funds, you’ll need to look elsewhere.
However, if you’re looking for a super safe medium- to long-term investment – and know you won’t need access to the cash in a pinch – GICs could be right for you.
Why you might prefer a tax free savings account (TFSA): TFSAs have been popular among Canadians since they were first launched in 2009 due to their flexibility. You can think of them as a hybrid of HISAs and RRSPs (registered retirement savings plans); they offer the ability to earn money tax-free and can hold several different kinds of investments (such as stocks, bonds, GICs, and even cash) and can be cashed out quickly, similar to a HISA.
If you want a more diverse place to save your money, particularly if you’re saving long-term, you might prefer a TFSA over a GIC or HISA.
Simplii Financial high interest savings account key benefits
- Money earns interest but isn’t locked in for a set amount of time
- Money can be withdrawn when you need it
- No monthly fees
- Can set up automatic deposits
What people have to say about this account
One Reddit user, in a thread called Simplii Financial – beware of savings account offer, warned others to read the fine print for the account’s promotional rate, claiming they didn’t qualify for it based on when they opened their account.
In another Reddit thread, called Simplii Financial HISA interest rate meltdown, users noticed that interest rates had dropped. This can happen from time to time, regardless of the bank or financial institution offering the account. However, users were quick to point out other alternatives that offer higher interest rates.
On that note, let’s see how the Simplii Financial HISA stacks up to the competition.
How Simplii Financial high interest savings account compares
Simplii Financial HISA vs. KOHO
KOHO offers four different accounts, each offering high interest on your entire balance. Since the Simplii Financial HISA has no monthly fees, it seems only fair to compare it to KOHO’s no-fee offering, its Easy account. While the Simplii account offers 0.4% interest on your entire balance (unless your balance exceeds $100,000), KOHO’s Easy plan gives you 3%. It also offers 1% cash back on groceries and transportation. KOHO’s account also doubles as a spending account (think of it like a chequing account). To get similar spending features and easier withdrawals with the Simplii HISA, you’ll need to stack it with a Simplii chequing account.
Simplii Financial HISA vs. EQ Bank
With the Simplii account, you can earn up to 5.5% interest. The bad news? You’ll need a balance of $1 million or more. Yeah, that’s not realistic for most Canadians. EQ Bank, meanwhile, offers a great interest rate of up to 4%. Its base rate is 2.5% but you can get an additional 1.5% if you connect your account to direct deposit.
EQ’s account is easier to use for withdrawals as well; you can withdraw money from any ATM in Canada (and EQ even covers the fees), while also offering 0.5% cash back on all purchases and no foreign exchange fees. Like Simplii, EQ Bank’s HISA has no monthly fees.
Simplii Financial HISA Vs. Neo HISA
Both Simplii and Neo have HISAs with no monthly fees. While Simplii offers a tiered interest rate scheme, ranging from 0.4%-5.5%, Neo offers a standard 4% regardless of your balance size. If your balance with Simplii is less than $1 million, you’ll only earn up to 1.25%.
Simplii Financial Vs. CIBC E-advantage
CIBC and Simplii offer promotional interest rates for new accounts (at rates of 6% for five months with Simplii and 5.6% for four months with CIBC).
After that, though, both banks provide tiered interest rates. Simplii’s ranges from 0.4% to 5.5%; CIBC’s, meanwhile, ranges from 0.65% to 1.90%.
Read more: Simplii vs. Tangerine
Is the Simplii HISA worth it?
Not really, according to this one humble writer. There are better offerings by smaller financial institutions that are more feature rich and flexible. You might be better off considering KOHO, Neo or EQ Bank.
FAQs
"Simplii FinancialTM" is a trademark and division of CIBC. Banking services are not available in Quebec.
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