Businessman puts a block with a picture of dollars.

Have you heard about overflow by Wealthsimple?

Andrii Yalanskyi / Shutterstock

Partners on this page provide us earnings.

Keeping some cash on hand is essential for day-to-day expenses, but you also don’t want your money sitting idle in a low-interest account and not working for you. But what if your financial institution could automatically sock away cash for you? If this sounds appealing, Overflow by Wealthsimple might be for you.

Retirement, family vacations, home repairs, investing: we all know there are gazillion great reasons to put money aside in an investment or savings account. Although it’s a good idea, unexpected things like our busy lives can prevent us from stowing the dough on the regular. Keeping some cash on hand is essential for day-to-day expenses, but you also don’t want your money sitting idle in a low-interest account and not working for you. But what if your financial institution could automatically sock away cash for you? If this sounds appealing, Overflow by Wealthsimple might be for you.

Overflow by Wealthsimple: At a glance

Grow your savings without effort: Your overflow funds are transferred automatically to a Wealthsimple Invest or Save account. After the initial setup, you never have to lift a finger. Set an amount of cash you want to keep in your chequing account. Once a month, any money on top of that amount will be automatically deposited into your Wealthsimple investing or high-interest savings account.

Change the amounts at any time or even skip a month when you need to keep extra cash easily accessible to withdraw. Stop participating in Overflow at any time.

Pros & cons of overflow by Wealthsimple

Pros

Pros

  • Speedy savings: Saving money is fast and easy when it’s automatic – you don’t have to waste time choosing between planning for the future or living in the moment

  • Easy, Smart Investing: Because your monthly payment is automated, it makes topping up your investments a cinch.

  • High-interest rate: with the laughably low-interest rates on most checking and savings accounts at other Canadian banks, your savings with Overflow will grow faster with a Wealthsimple Save account offering a 0.5% interest rate.

  • Simple set-up: No fiscally-focused willpower on your part is required. Just up Overflow and Wealthsimple does all the work for you.

  • Very flexible: change or skip the transfer dates and create maximum transferable amounts. You’re the boss!

Cons

Cons

  • Unlike with a physical bank, you don’t have immediate access to your money

  • Wealthsimple does not have any physical locations. However, the customer service team is available by phone or email.

What is Overflow by Wealthsimple?

Introduced in December of 2018, Overflow is a new feature that helps Wealthsimple customers maximize their investment and savings contributions. Once activated, set a bank balance for the cash you need to keep on hand, and then Wealthsimple will automatically put an extra dough to work in an investing or savings account. Wealthsimple helps you invest and save on autopilot – so you never miss a chance to grow your money.

It’s a no-brainer: why leave your extra dough sitting idle in a low-interest bank account when you could be increasing your investments or earning a high-interest rate on your savings?

Overflow is best for:

  • Smart investors who want an easy way to top up their investments on a regular basis, thereby boosting their potential returns.
  • People who want to accumulate savings quickly and earn a high-interest rate
  • People who want to automate as much of their financial plan as possible

How does Overflow work?

Starting to save has never been simpler. Just follow these steps:

  • Open a Wealthsimple account.
  • Link your bank accounts: Using your tablet, phone, or computer, connect your bank’s online chequing or savings account to Wealthsimple. Currently, you can link it to TD Canada Trust, RBC, CIBC, Bank of Montreal, Scotiabank and Tangerine bank accounts.
  • Set a monthly amount: Decide what minimum amount of money to keep in your bank account every month. For example, you can set a balance of $2000. Therefore, once a month (the default date is the 18th of every month but you can change that) Wealthsimple will move any money above $2000 to your Wealthsimple account. So, if you have $2500 sitting in your bank account, they’ll transfer $500.
  • Set a maximum amount: If you’re worried that Wealthsimple can withdraw any amount over your set minimum bank balance, you can also set a maximum overflow amount. For example, you could set a maximum overflow transfer of $2000. That way even if you have $10,000 sitting in your checking account, Wealthsimple will never transfer more than $2000.
  • You’re done! Now sit back and watch the savings grow.

Each month, Wealthsimple will also send you an email a few days before Overflow is initiated. If you feel you might need some extra funds on hand because of some unexpected expenses, you just respond to the email that you want to skip that month, and voila! No money will be removed—it’s that simple.

Why get Overflow?

Get Overflow if you’re a couch potato investor looking to maximize your investment earning potential. It’s also great for customers who want to set up a savings plan (and let’s face it, we all should have one) that requires minimal effort on your part.

How to set up Overflow

Setting up Overflow is easy. Once you have a Wealthsimple account that’s connected to your bank’s chequing or savings account, just go to the “Funding” heading and activate Overflow. You can deposit into any of the following Wealthsimple accounts:

  • RRSP
  • TFSA
  • Personal
  • Wealthsimple Save
  • RESP
  • Spousal RRSP
  • Joint

Parting words: Is Overflow worth it?

If you don’t foresee needing to immediately access large amounts of cash at a moment’s notice, then Overflow is an excellent option. This feature makes saving and investing your money as automatic and trouble-free as possible.

If you like the Overflow feature, consider also adding the Roundup feature into the mix. It’s another way to automatically invest and save: every time you make a purchase, Wealthsimple invests the spare change in a Wealthsimple Invest or Save account.

The bottom line? Overflow is a winner, once again demonstrating why Wealthsimple is our top pick for robo advisors in Canada. Read our full Wealthsimple review for all the details.

About our author

Sandra MacGregor
Sandra MacGregor, Freelance Contributor

Sandra MacGregor has been writing about finance and travel for nearly a decade. Her work has appeared in a variety of publications like the New York Times, the UK Telegraph, the Washington Post, Forbes.com and the Toronto Star. She spends her free time travelling, and has lived around the globe, including in Paris, South Korea and Cape Town.

Disclaimer

The content provided on Money.ca is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.