Why bother launch a new bank product?

EQ Bank chose to launch a new type of savings account based on market need. According to a new survey, conducted by EQ Bank through the online Angus Reid Forum, while the majority of Canadians (89%) consistently save towards short- and mid-term goals, many of these savers don't reach their full savings potential.

While Canadians appear to use a variety of products to reach their savings' goals, the most common tool was the use of a traditional chequing accounts – with 60% of Canadians using these accounts to save. Given the typically interest earned on a Canadian chequing account is around 0.1%, this means millions of Canadians are effectively letting their purchasing power erode using low-interest bank accounts.

"We recognize that every dollar counts for many Canadians, no matter your walk of life or personal circumstances," said Prodder in a recent press release.

How the new EQ Bank account changes the saving landscape

With most high-interest savings accounts, Canadians can expect an earning interest rate between 0.4% and 2.5%. Quite often, traditional and online banks, credit unions and fintech providers will run promotional interest rates that can help Canadians earn as much as 6% on account deposits, but only for a specified period of time.

The new EQ Bank Notice Savings Account allows customers to earn 4.5% or 5% on all account deposits — all the time. This is key, given survey results which found that Canadians far prefer banks that offer all customers the chance to earn higher interest due to loyalty or engagement (57%) or the same interest rate to all customers (25%) rather than higher rates for more deposits (13%) and periodic promotions even when it means they may miss out (5%).

"We've heard loud and clear that Canadians prefer equal access to the same opportunity rather than promotional or preferential rates offered to only a select group of customers," said Prodder.

Where the new EQ Bank Notice Savings Account fits in the saving's landscape

Like other EQ Bank accounts, customers do not pay monthly or ongoing fees to access the higher interest rates offered through the Notice Savings Account, nor are they required to meet a minimum balance requirement.

However, to get the higher earning rate, customers need to agree to a longer withdrawal notice period. In Canada, a withdrawal notice from a HISA can take anywhere between minutes (for larger, traditional banks) to five days (for online banks and digital fintech firms). The EQ Bank Notice Savings Account requires customers to choose between a 10-day or 30-day notice periods — meaning, it will take either 10 or 30 days to request a transfer from a Notice Savings Account to a daily bank account (where the money can then be withdrawn, used to pay bills, etc.).

By providing a longer withdrawal period, EQ Bank has created a blend between a GIC and HISA. As of June 2024, most 30-day GIC rates hovered between 2.75% and 3.5%, while the best HISA rates are around 2%.

Learn More: About opening an EQ Bank Notice Savings Account

Fine print on the new EQ Bank Notice Savings Account

For Canadians looking to earn more on their short- to mid-term savings, the Notice Savings Account may be ideal. Plus, the fine print on these accounts aligns with current safety standards Canadians have come to expect from financial institutions. For instance, all EQ Bank deposit products, including the Notice Savings Account, are eligible for Canada Deposit Insurance Corp (CDIC) deposit coverage. (Note: The limit this coverage for all accounts at all institutions is $100,000 per account.)

Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.

EQ Bank is also a stalwart in the fintech and online banking space. EQ Bank is Canada’s seventh largest bank with approximately $123 billion in combined assets as of the end of April 2024.

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What Canadians are saving for (and why they need to reconsider where to park their money)

According to the EQ Bank survey, Canadians focus on a few key short- and mid-term goals, including:

  • 61% - Save for travel
  • 41% - Home renovations/repairs
  • 36% - Car purchase/repair
  • 25% - Managing irregular income
  • 22% - Home purchase/down payment

How higher interest earnings help with saving's goals

For Canadians considering how and where to put their short- to mid-term savings, the EQ Bank Notice Savings Account may be ideal. Compare, for instance, the following earn rates if you were to save $5,000, as a lump sum, using various bank accounts available in Canada:

Where you park your savings and what you can earn
Account Interest Rate Balance After 30 Days Balance After 1 Year Balance After 5 Years Info Review
EQ Bank 10-day Notice Savings Account 4.5% $5,018.37 $5,225.00 $6,230.91 10-day withdrawal period EQ Bank
EQ Bank 30-day Notice Savings Account 5.0% $5,020.37 $5,250.00 $6,381.41 30-day withdrawal period EQ Bank
Tangerine 1-year GIC 4.9% -- $5,245.00 $6,351.08 365-day lock-in period Tangerine
KOHO Essential 5.0% $5,020.37 $5,250.00 $6,381.41 $4 to $7 monthly fee KOHO
BMO Savings Amplifier 1.8% $5,007.44 $5,090.00 $5,466.49 -- BMO

Some of EQ Bank's other savings products to take note of

EQ Bank has been a leader in providing ongoing high-interest earning bank accounts. While the Notice Savings Account are the most recent products, this digital bank does offer additional savings products, including:

EQ Bank TFSA savings account: Recently, EQ Bank has expanded its offerings to include TFSA Savings Accounts to those with an existing EQ Bank Savings Plus Account. The interest rate on this account is 3.00%, which is the regular interest rate, not a promotional rate. To transfer funds to an EQ Bank TFSA Savings Account, you can link your regular chequing account, make one-time transfers or set up an automatic transfer. You can also use Interac e-Transfers® to fund your account.

EQ Bank's GIC: EQ Bank offers some of the highest GIC rates of any financial institution, particularly for those who are willing to wait a while until they access their funds. Its interest rates typically climb higher for longer term lengths, and EQ Bank is one of the few institutions in Canada that offers GIC terms up to 10 years, starting at 3.75% for a 3-Month GIC (non-registered). Those interested in opening a GIC with EQ Bank must first open a Savings Plus Account, from which the money for the GIC will be transferred and to which it will be returned upon maturity.

Survey methodology

The survey findings were based on an online survey of 1,504 Canadians who are members of the Angus Reid Forum. The online survey was conducted by EQ Bank between April 24 and 26, 2024. The survey was conducted in English and French. For comparison purposes only, a probability sample of this size would carry a margin of error of +/-2.5 percentage points, 19 times out of 20.

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Nicholas completed his master's in journalism and communications at Western University. Since then, he's worked as a reporter at the Financial Post, Healthing.ca, Sustainable Biz Canada and more. Aside from reporting, he also has experience in web production, social media management, photography and video production. His work can also be found in the Toronto Star, Yahoo Finance Canada, Electric Autonomy Canada and Exclaim among others.

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