EQ Bank TFSA: A Guide

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Lisa MacColl is a writer, investor and former compliance consultant in the group retirement and individual wealth management fields. Lisa has written about personal finance for 14 years and currently writes about investing and investment providers for Wealthsimple. Lisa's past work has been published in Canadian Money Saver, Advisor’s Edge, CBC, and CreditCards.ca. She was a nominee for the 2015 Oktoberfest Women of the Year, Professional Category. Lisa holds an M.A. and B.A. from the Wilfrid Laurier University.

Since 2009, Canadian residents have had the opportunity to save money while taking advantage of tax-sheltered investment earnings. The Tax-Free Savings Account (TFSA) allows investors to maximize the power of compounding, without a nasty tax surprise that pulling money out of an Registered Retirement Savings Plan (RRSP) can have. TFSAs have contribution limits, but unused contribution room gets rolled over into the next year. You can find out what your TFSA contribution room is by checking your Notice of Assessment, the document the Canada Revenue Agency (CRA) sends you after you file your income tax every year. You can also check the balance on “My Account” if you have set up a CRA online account.

Generally, the same kind of investments that are allowed in a RRSP are allowed in a TFSA, and investment earnings are tax-sheltered. And because your contributions are made with after-tax dollars, you don’t have to pay tax on the funds when you withdraw them.

Our TFSA's use Nobel Prize winning investing strategy at a fraction of the fees charged by big banks. Plus it takes just a few minutes to get started. Let’s go!

Your trust is important to us. That’s why we always do our best to be fair and provide complete, up-to-date and accurate information. You should know that EQ Bank may change its product features or fees at any time. To complete your homework, we recommend visiting its site to continue your research.

An Overview of EQ Bank’s TFSA

EQ Bank was founded in 1970 as The Equitable Trust Company. It is a wholly owned subsidiary of The Equitable Group and has approximately $35 billion assets under management. There are no brick-and-mortar branches—everything is handled online.

EQ Bank TFSA Savings Account

The EQ Bank TFSA Savings Account works like a regular bank account, with the benefits of tax-sheltered income. There is no minimum deposit required to open an account. Because it is considered a savings account rather than an investment account, it has the advantage of being very stable and safe. It’s insured for up to $100,000 by the Canada Deposit Insurance Corporation (CDIC). You can access your funds at any time, and there is no fee to transfer your funds to another financial institution. It is currently paying 2.30% interest as of January 19, 2021.

FeatureFee
Interest rate on savings account TFSA (as of January 1, 2021)2.30%
Minimum balance$0
Transfer fee$0
Human telephone support at no extra costYes

EQ Bank TFSA GICs

EQ Bank offers a number of Guaranteed Interest Certificates (GICs) that offer short-, medium-, and long-term options for savings if you aren’t comfortable with mutual funds. As long as the term is 5 years or less, GICs are covered by the CDIC. There is a maximum of 20 GICs per customer, an investment limit of $100,000 and an aggregate GIC maximum of $500,000. The rates below are current as of January 19, 2021.

GIC TermRateAccess to FundsInterest PaidHuman Support
3 months2.30%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.Terms 1 year or less: simple interest paid at maturity.Yes
6 months1.80%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.Terms 1 year or less: simple interest paid at maturity.Yes
9 months1.65%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.Terms 1 year or less: simple interest paid at maturity.Yes
1 year1.50%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.Terms 1 year or less: simple interest paid at maturity.Yes
15 months1.05%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.For 15-month GIC: interest is calculated on a per annum basis, compounded annually and paid solely at maturityYes
2 years1.05%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.For GIC terms of over one year, not including 15- and 27-month terms, interest is calculated on a per annum basis and paid either annually (simple interest) or at maturity (compounded annuallyYes
27 months1.05%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.For 27-month GIC: interest is calculated on a per annum basis, compounded annually and paid solely at maturityYes
3 years1.15%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.For GIC terms of over one year, not including 15- and 27-month terms, interest is calculated on a per annum basis and paid either annually (simple interest) or at maturity (compounded annuallyYes
4 years1.25%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.For GIC terms of over one year, not including 15- and 27-month terms, interest is calculated on a per annum basis and paid either annually (simple interest) or at maturity (compounded annuallyYes
5 years1.50%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.For GIC terms of over one year, not including 15- and 27-month terms, interest is calculated on a per annum basis and paid either annually (simple interest) or at maturity (compounded annuallyYes
6 years1.60%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.For GIC terms of over one year, not including 15- and 27-month terms, interest is calculated on a per annum basis and paid either annually (simple interest) or at maturity (compounded annuallyYes
7 years1.70%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.For GIC terms of over one year, not including 15- and 27-month terms, interest is calculated on a per annum basis and paid either annually (simple interest) or at maturity (compounded annuallyYes
10 years2%Non-redeemable until term maturity. If funds are withdrawn prior to maturity, no interest will be paid.For GIC terms of over one year, not including 15- and 27-month terms, interest is calculated on a per annum basis and paid either annually (simple interest) or at maturity (compounded annuallyYes

What to look out for in a TFSA provider

Where you open your TFSA could mean a difference of thousands of dollars. That’s because different financial institutions charge different investments and fees and offer different levels of smart technology and human advice.

FEES

Management fees can be a mortal enemy of investment growth. Because they often look so minuscule, they quietly add up. Small fees make a huge difference; one Toronto-based investment advisor showed that a fee of just 2% could decrease investment gains _by half_ over the course of 25 years. And studies regularly demonstrate that fees are directly predictive of returns in a very simple way; the higher the fees, the lower the returns.

Investment choices

As we’ve explained, TFSAs are accounts in which you might put various kinds of financial investments, including cash, stocks, or bonds. A number of factors will dictate how you invest, including your risk tolerance and investment horizon, a.k.a. when you need to access the money. You should research the investment options available to you before you open the account—Tangerine, for example, will assess a $45 fee per account should you decide to move elsewhere.

If you think you may someday want to fill your TFSA with investments that yield a bit more than a savings account, you may look for a place that offers low fees as well investment choices that allow you access to the stock and bond markets.

Smart TECHNOLOGY

Automated investing services employ different technologies and algorithms to optimize account performance. Some are smarter than others—they’ll perform portfolio-supercharging tasks like automatic portfolio rebalancing and tax loss harvesting at no extra charge. Make sure that whichever investment provide you choose offers the most advanced technology available.

A note on methodology

The information on this page was compiled by Wealthsimple in January 2021. In order to uncover this information, we looked at the EQ Bank website, press releases, and third-party sites. This article reflects information collected at the time of publication and is provided for educational purposes only and is intended for Canadian investors.

Everyone’s situation is different, and what might work for one person would be an epic fail for someone else. You should always consult with a professional to determine if an option is right for your unique circumstances.

Last Updated October 10, 2018

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