The Bank of Canada ended all the speculation and lowered interest rates Wednesday – the first decline in four years. It comes on the heels of a weak jobs report, which has everyone asking what's next for interest rates. With more on this we bring in our financial analyst, Michael Campbell.earlier this month marked the first signal that borrowing costs are heading down, but experts say the rates Canadians can expect on savings accounts are also at risk.
Barry Choi, personal finance expert with Money We Have, also said in an email to Global News that some banks may choose to keep their savings offers elevated despite the rate cut. Banks that are certified by the Canadian Deposit Insurance Corp. also come with insurance to cover up to $100,000 in deposits, a standard level of protection across the Canadian banking industry.“I think in general, we tend to have a lot of bank loyalty in Canada. Sometimes we don’t realize the wealth of choice that we actually have until we start researching,” Terrell says.
Choi also notes that some banks are adding new requirements to increase the stickiness of these accounts, requiring in some cases for customers to set up direct deposit or other recurring billing arrangements that ultimately make it harder to switch to accounts at a competing bank. “Promotional periods and promotional interest rates can be a great way to add more value to your savings. You just want to make sure that it’s a potentially good account for you in the long term.”One of Canada’s digital banks, EQ Bank, recently launched a new product offering relatively high savings rates – with a catch.The notice savings account from EQ Bank requires customers to give 10 days’ notice for any withdrawals or moves in return for 4.
The idea came from speaking to Canadians who had specific goals like travel, where they had a set date when they knew they’d need the money they’re saving up, she says. But it’s also right for saving towards a downpayment on a home or vehicle, Poddar says – medium-to-longer-term goals where a customer can plan their withdrawals further out in advance.