However, until now, options for holding and growing money in Canada have been limited to high-yield savings accounts (HISAs), guaranteed investment certificates (GICs) and money market funds (MMFs). Therefore, the introduction of an accessible notice savings account (NSA) is nice news for those on the lookout for another.
Read on to seek out out all about EQ Bank’s brand recent cancellation savings account, which offers 3.00% or 3.05% interest depending on the choice you select. Find out why it’s an incredible option for brief and medium-term savings goals.
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EQ Bank Notice Savings Account
- Monthly fee: $0
- Interest rates: 3.00% with 10 days notice, 3.05% with 30 days notice. Read all the small print about it EQ Bank website.
- Minimum balance: n/a
- Eligibility for CDIC Coverage: Yes
Why hold money in your portfolio?
When people take into consideration investing, they often concentrate on stocks, mutual funds, and exchange traded funds (ETFs). Cash is less vital than other types of investment, but it might probably even be a very important a part of your portfolio.
First of all, money is a possibility for diversification that helps reduce risk. A strong, diversified portfolio could include a mix of equities (stocks); mutual funds and/or ETFs (which put money into dozens and even a whole bunch of corporations); fixed income securities (equivalent to bonds and GICs); and money. The exact mix is determined by your financial goals, time horizon and risk tolerance.
Cash is stable, meaning that unlike stocks or bonds, it will not be subject to fluctuations in value. If you save $1,000 and keep it in a savings account or buy a GIC, in six months you may still have $1,000 plus the interest you’ve got earned.
Finally, money is liquid, meaning you may access it quickly and simply – an enormous advantage in case you need money but cannot or don’t need to sell your investments. You may have money for an unexpected expense or emergency, or to reap the benefits of a sexy investment opportunity, for instance.
Where Canadian investors can hold money
Aside from a daily checking account, there are only a limited variety of places Canadian investors can store their money. As noted above, these have traditionally included HISAs, GICs and MMFs, in addition to mutual funds and ETFs. However, now investors in Canada may select the EQ Bank Notice Savings Account, the primary within the country to supply NSA advantages with no minimum deposit. And like HISAs and GICs, NSAs are backed by the Canada Deposit Insurance Corporation (CDIC), meaning your money is insured as much as $100,000 per account in case your financial institution fails.
| EQ Bank NSA | SHARE | GIC | Money market funds | |
|---|---|---|---|---|
| rate of interest or return | 3.00% or 3.05% interest | Interest rates typically range from 0.01% to 4.00%. | Varies – generally, GICs with longer terms and fewer flexibility have higher rates of interest. Current rates of interest for 30-day GICs (the shortest term available) range from 2.8% to 4.3%. | There are currently money market funds with a yield of 4% to five%. |
| Cancellation policy | 10 days or 30 days depending on account | Cash withdrawals are easy; Transfers can take a number of days | Only at the tip of the term (unless it’s a withdrawable or redeemable GIC) | The withdrawal normally takes a number of days |
| Minimum balance | NO | NO | Normally $500; Only $100 minimum investment with EQ Bank | $100 to $5,000, depending on the fund |
| Maximum contribution | $200,000 for a person account, $500,000 for a joint account | NO | Unregistered accounts typically have either a really high maximum amount or no maximum amount. Contribution limits apply to registered accounts (RRSPs, TFSAs, etc.). | NO |
| Fees | None | Sometimes | None | Management fees of 1.5% to 2% |
| CDIC coverage (as much as $100,000) | Yes | Yes | Yes | NO |
This is how a termination savings account works
Although notice savings accounts are common within the United Kingdom and Australia, they will not be common in Canada and are typically limited to businesses or targeted at high-net-worth banking customers. The EQ Bank Notice Savings Account is the primary of its kind in Canada available to on a regular basis investors and savers, with no minimum balances or fees and the identical rates of interest for all account holders.
