Wednesday, 20 February 2013

Online

dollarsigns


l had been using Ally.ca for high interest savings accounts, GIC's and the like. They have just been taken over as of February, 2013 by the Royal Bank of Canada. All operations will be finalized by some time in April and they will be converting you over to RBC accounts. I phoned today to see what the RBC Hi-Interest rate savings was .... 1.2% Wow! Say it backwards .. !woW. Yes I am a little sarcastic about bank interest and bank fees. Imagine charging you to DEPOSIT your money! Then they take your money and invest it and make much more money than you do! For that reason, I say, INVEST in bank stocks; DO NOT have large sums on deposit for two reasons:



  • You make almost no interest compared to index funds

  • You get charged interest at the highest tax rate; same rate as if you worked to earn that money. However if you max out your TFSA account even if it is just a high-interest savings account, then you are protecting your savings from TAXES!


The two other virtual or online banks in Canada with the highest http://www.achieva.mb.ca/Portals/0/logo/achieva_logo.jpginterest rates are both in Winnipeg. They are Accelerate and Achieva both owned by credit unions. Both Achieva and Accelerate will give you 2% [as of sometime in 2014] in a Hi Interest Daily Savings Account, much like Ally when it started out. Unlike Ontario banks and credit unions in Manitoba EVERY BIT OF YOUR MONEY is insured! That's a plus especially if you wish to keep over $100,000 in a savings account. I think they know that it would be extremely unlikely for any bank to go belly-up in Canada due to the regulations on them holding a certain per cent of the savings of their account-holders in case there was a run on the funds.


I looked at and phoned both. Achieva I believe appears to be bigger as it is owned by Cambrian Credit Union, some 54,000 members strong, established in 1959. They also offer more services than Accelerate such as the same MasterCards offered by Meridian and other credit unions. They also offer Credential Direct brokerage and Life Events Planner which is basically a bunch of calculators to plan various life events. I do not believe you get anything extra by paying higher fees to brokerages. There are cheaper ones in Canada. Think Questrade and Virtual Brokers. [more later about  them]


Think about it! These two online banks offer 2% and RBC offers 1.2%. That is 67% more if you bank with either of the "A" banks above! Wouldn't you like to get 67% more on your savings? Well, join one of  these banks and you will! :-) It's a no-brainer.


k0118359I signed up online for a Hi Interest savings account and a TFSA savings account which gets the same rate.


I'll be moving them from Ally as soon as possible as when RBC owns it there will probably be some large fee attached to closing your account! Banks do have a reputation for fee-ing you to death, which by the way is why they make good investments in their stocks but NOT in using them for daily savings.


January 2015 Addon: Moved my savings to Achieva and have been making good interest ever since!